A Purchasing Power Crisis? UPDATE

A Purchasing Power Crisis?

(With a Dash of Refinancing Risks)

3.26.2025 Update, feedback and our clarifications.

We are getting questions from a number of nations. Examples below:

Identify the weaknesses in RRM method.

We are prepared to identify weaknesses. An example:   if Hyperinflation (greater than 10% per year) is present for the life of the loan and starts before the first coupon or mortgage payment, a nominal interest rate instrument outperforms our method. Here in the US, I am not sure that we would tolerate an ongoing inflation rate of 10% that lasted for decades.

Who is not aided by this method?

Those who are operating in a non-marketable currency. Those nations who will not employ the benefits of the method for improved management of their fiscal and/or monetary policies. Those corporations, endowments, foundations, corporations, individuals that will not employ the benefits to their specific goals. i.e., overspending or lack of reinvestment into themselves.

The current market has a number of tools to manage business risks.

An able assessment of business risk, not a GUESS of inflation risk, should determine the winners and losers. Let us simplify and reduce costs, variability and volatility. Let us expand, broaden and deepen the tools for risk management.

Short answer.

We will not claim perfection. What we claim is Material Superiority.