Normal Inflation (if there is such a thing)

dusty · Post by **dusty** » Mon Jan 14, 2013 7:59 am

How much should we be expecting "normal inflation" to effect what we pay for things today?

An item that I purchased in 2006 for $74 is today priced at $110. Is this reasonable or is it excessive? What is this - a 48% increase over the price in 2006?

In contrast:
Being on a fixed income, I have lost track of compensation rate changes. Are wages and salaries increasing at this same rate.

claimdude · Post by **claimdude** » Mon Jan 14, 2013 8:44 am

dusty wrote:How much should we be expecting "normal inflation" to effect what we pay for things today?

An item that I purchased in 2006 for $74 is today priced at $110. Is this reasonable or is it excessive? What is this - a 48% increase over the price in 2006?

In contrast:
Being on a fixed income, I have lost track of compensation rate changes. Are wages and salaries increasing at this same rate.

Dusty,

I am glad you used the quotation "normal inflation" as that is the product of the modern Federal Reserve managed economy. The Fed looks for 2 to 4% annual inflation and defines that as healthy. The fed management of the economy should be eliminated and return to the gold standard. That would put a serious check on Washington DC and a side benefit as well.

In a free market system inflation should be the result of better quality, better materials, more features and so forth and not just because some alleged private entity has decided to pump more currency into the economy.

Jack

judaspre1982 · Post by **judaspre1982** » Mon Jan 14, 2013 9:03 am

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heathicus · Post by **heathicus** » Mon Jan 14, 2013 9:18 am

Not quite what you're asking for, but I've found this site interesting: http://www.westegg.com/inflation/

The reason the Fed likes a steady rate of inflation is because it's good for debt (that's at a fixed interest rate).

But I agree that the Federal Reserve (and their wrecking of the economy) should be done away with, put us back on the gold standard. The value of precious metals doesn't change. It's the value of the dollar in relation to it that changes. I like the example of being able to buy a gallon of gas today with a dime. As long as that dime was made before 1965.

heathicus · Post by **heathicus** » Mon Jan 14, 2013 9:22 am

Yep, I'd agree that wages are stagnant. I work for the state government and we used to get a roughly 3% raise every year. I haven't received that raise in 4 years now. But the value of my pay continues to decrease and the cost of groceries, gas, and medicine continues to rise.

dusty · Post by **dusty** » Mon Jan 14, 2013 9:28 am

I opened this thread with a question that is based on reality. The numbers are real. I feel like I am being gouged but some have told me that this is normal given the "inflation rate".

Yes, times are tough and just might get tougher. I understand retailers keeping up with inflation. After all, they are in business to make a profit. If costs rise, prices rise. That's a mathematical reality.

But if cost goes up 10% and selling price goes up 50%, that's gouging.

heathicus · Post by **heathicus** » Mon Jan 14, 2013 9:53 am

Here's another site similar to the first one I linked to, but with more recent data.

http://www.usinflationcalculator.com/

According to it, "If in 2006 I purchased an item for $74, then in 2012 that same item would cost: $84.51. Annual rate of inflation change: 14.2%."

swampgator · Post by **swampgator** » Mon Jan 14, 2013 11:37 am

Desparately need to re-roof my garage. Got to protect my wood and SS's.

Checked on decking last summer at Lowe's and 5/8" decking was $16.00 per sheet. Checked the other day and equivalent sheets are not $18.87. But, I got a COLA that will buy one sheet per month. I just hope the price doesn't go up again while I'm trying to buy these sheets.

dusty · Post by **dusty** » Mon Jan 14, 2013 11:39 am

heathicus wrote:Here's another site similar to the first one I linked to, but with more recent data.

http://www.usinflationcalculator.com/

According to it, "If in 2006 I purchased an item for $74, then in 2012 that same item would cost: $84.51. Annual rate of inflation change: 14.2%."

Based on the link you provided (which uses the official inflation rate over the time period indicated) to show what the anticipated price would be (based on inflation).

This tells me that the price increase (from $74 to $110 in my example) is the result of something other than "normal inflation". I called it gouging.

Then there is the outfit that has had raw materials in inventory for a long time but still prices todays' sale based on todays' cost of goods. Sorta like filling stations. The gas has been in underground storage tanks for weeks but the price at the pump goes up every day. BTW, does it really go up faster than it comes down. It sure seems that ways.

JPG · Post by **JPG** » Mon Jan 14, 2013 11:48 am

Y'all are ignoring a couplea things.

Supply/demand.

Ya 'charge what the market can bear'.

The item's price history both before the earlier price and the current price.

Consider the recent double tilt price increase. I think the original price was a 'goof'!

Few things are simply a one parameter animal.