My favorite apples to apples comparison, or metric, is the cost of mailing a first class letter. There are no other calculations that need to be made for "new and improved" whatever. The service is the same.
In September of 1958, the cost of a first class stamp was 4 cents.
In September of 2008, 50 years later, the cost of a first class stamp is 42 cents.
Notice anything? The U.S. $ has lost collapsed over 90% in 50 years.
My bet is this:
In 2018, a first class stamp will cost between $3 and $6.
Wanna see me do the same trick for a McDonald's Happy Meal? Or a gallon of gasoline? Or a loaf of bread?
Now, this is all sort of OK, as long as the median after tax income performs similarly. My bet is that it will not, and by a SIGNIFICANT shortfall.
I hope this clarification helps the Doomers AND the Cornicopians.
Good Luck!
Mentatt (at) yahoo (d0t) com
3 comments:
The overall increase in prices must have something to do with the increase in the number of dollars themselves, one way or another. More dollars means less value per dollar, and so prices rise. And normally most people wouldn't care. I get 3% raises at work and that compensates me for "natural inflation." What I don't think people realize is that we IMPORT twice as much as we export, and a lot of the imports are energy-related. So while the average person thinks that most of their dollar expenditures stay in the country (car repairs, etc.) and aren't subject this "weakening of the dollar" thing, they don't realize just how exposed we all are to imports. And if oil and other imports become scarce, THAT is where the (food & energy) inflation comes from. And I still think we have a deflation going on now in the U.S. in everything else.
Bureaucrat:
We HAD deflation in everything else. The kind of liquidity being pumped into the system MIGHT change that... or it might not. My bet, at THIS moment, is that this is likely inflationary, even for credit and money supply.
I would NOT stake my life on it, because if Oil imports continue to decline in 2009 at 8%, all bets are off...
Still, you can hold me to my postage prognostication. Maybe we should get long stamps?
Before this is over, I may WISH I had a federal job...
Best wishes!
Lucky for you, we aren't hiring anybody these days. But you could make good $$ as a contractor. :) $15 an hour perhaps! Hahahaha!
If the oil was becoming a supply problem, why is everyone running like hell away from it? Nobody is gonna buy much of anything for awhile that they don't need. No on has any money or credit. Deflation.
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