Inflation at 5.6%

arbilad · Head Chef

Inflation at 5.6%

lundbaek · Profuse Pontificator

Inflation = devaluation of the currency due mostly to watering it down.

Now think what that does to your savings in the currency being inflated (all of them, as far as I know, some faster than others at different times.)

Read "The Creature From Jekyll Island" by G. Edward Griffin for the best explanation I've found of how inflation got going. And don't let anybody tell you inflations is necessary to stimulate the economy. It's purpose is just legalized plunder.

arbilad · Head Chef

Historically, inflation, over the longterm, was nowhere near what it is in the last century.

arbilad · Head Chef

I heard a guy on the radio this morning say that, when he was selling cars in the early 80s, you could buy a car for $4000, an average car was $5000-$6000, and a really loaded, high end car was $21000.
I seem to remember that the local Kia dealership was advertising a low end car for under $10000. Let's assume that's $10000 and compare that to the low end price of the early 80s. We've seen a 250% increase since then for the low end car. I'm not sure what an average car sells for today, but I'm sure that it's not less than $15000, since I paid a little less than that for a new lower end car back in '96, so let's assume $15000. From an average car price in the early 80s, we've seen a 300% increase. If we average that over 28 years (1980-2008), then we have an average inflation of car prices of 10.7% per year. I'm using very conservative figures, so I suspect that it's actually higher than that.
I also remember around that time you could get a one scoop ice cream cone for 25 cents. Nowadays the cheapest I know of is at McDonalds for $1. That's a 400% increase.

Organist · Senior Member

So, soon-to-be doctors can probably plan on making over $1,000,000/year by the time they retire, though this will be a loss in buying power, because inflation (government printing more money) is going to devalue the currency.

-- Edited by Organist at 22:07, 2008-08-20

Cocobeem · Keeper of the Holy Grail

You got it, organist!

Any interesting dates lately? You best get moving on that, you know.

LoudmouthMormon · Profuse Pontificator

My dad wasn't an economist, but his take on things was along these lines: "When I was growing up, an ice cream cost a nickel - and I didn't have the nickel. Now it costs a dollar, but I've got the dollar."

Inflation figures are important. So is the overall health of the economy, and various standard of living measures.

LM