Friday, November 5, 2010

What is Inflation?

One of the way to estimate the real inflation is looking into M3 Broad Money Supply - From year 1973 to 2010, M3 Growth at 13.36% p.a. (source: Bank Negara)

Therefore the inflation is affected accordingly.

In investment, your CAGR must be 15% and above to beat the increase in money supply (M3).