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December 28, 2015 18:08
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Backing the value of interest into the purchasing power of the USD.... with taxes.
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| a = -Delt(CPIAUCNS, k=12)*100 | |
| a = na.omit( a[endpoints(a, on="years")] ) | |
| a = cumprod( (1+(a/100)) ) | |
| b = (M2OWN*0.6 - Delt(CPIAUCNS, k=12)*100) | |
| b = na.omit( b[endpoints(b, on="years")] ) | |
| b = cumprod( (1+(b/100)) ) | |
| b2 = (TB3MS*0.6 - Delt(CPIAUCNS, k=12)*100) | |
| b2 = na.omit( b2[endpoints(b2, on="years")] ) | |
| b2 = cumprod( (1+(b2/100)) ) | |
| d = na.omit(merge(a, b, b2)) | |
| names(d) = c("Purchasing Power of a $", "Purchasing Power of a $ w/ Interest (40% tax rate)", "Purchasing Power of a $ invested in 3mo T-bills (40% tax rate)") | |
| par(mar=c(3, 2, 1, 0.5)) | |
| plotRelativeReturn(d, legend.cex=0.75) |
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