Inflation myth

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Everyone is cheering because inflation is creeping down. What people fail to realize is that inflation compounds. In 2021 it was 3.4%, in 2022 it was 6.8%, in 2023 it is projected to be 3% (the Bank of Canada has been very wrong before but let’s give them the benefit of the doubt), and let’s say it returns to 2% in all subsequent years. In 2025, everyone will be happy because inflation is only 2%; however, because of the miracle of compounding, the inflation from 2021 to 2025 will be 18.34%. Shocking.