Inflation creates a hurdle rate over which a company needs to make a return on equity in order to make any real return for its shareholders. In ninete 80 the inflation rate, or the hurdle rate, was 13%. So he says, in a world of 12 % inflation, a business earning 20 % on equity and putting it out is chewing up their capital, not enhancing itan. And then three, to shift the measure of success from earnings, which he says no longer mean anything on their own, to the gains in purchasing power. We got to look at what this money actually buys.

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