Minor problem with this, as Jim Grant points out, is that you can't compund forever - there's always some market crash /inflation / invasion / plague or something that limits how long you can compound.
Just taking the past two years or years - If you held U.S. 'Contiental' (early U.S. currency, 1770) they went to almost zero.
Germany currency in Wiemar -hoped you saved the wheelbarrow.
Argentina has blown up their currency 4 times in the past 100 years.
U.S. dollar had significant infaltion in the 1970s
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Until about 1500, most estimates of economic growth rates in the West are about 1% per year, mostly less.
After 1500, with printing, horse collar, motar board plow, spread of water mills and wind mills, and later improved ships, growth gets up to 1-1.5 % per year.
Might be difficult to get a real 2% return over a number of years in this environment.
After the 1800, steam engine, crop rotation, and start of railroads, etc. there was much more economic growth, and getting 2 % or better would be easier. |
