Higher

Before I stop talking about investment, exponential growth, and the effect of inflation, there is one more thing that I must remind you:

The nominal inflation rate is always lower than the actual one.

There are two reasons. First, government officials and practitioners of politics have various methods of manipulation so that the numbers reported would not be excessively high - it just doesn't look good to them.

(I shall not elaborate on how government could twist the calculation of inflation rate. Interested visitors may like to read http://www.marketoracle.co.uk/Article8830.html)

And, in addition, the available method of calculating the inflation rate has an intrinsic problem, which I discussed some years ago.

Please refer to http://ccszeto.blogspot.hk/2008/01/inflation.html

I believe the implication of a higher-than-nominal inflation rate is obvious.