Inflation

motorstereo

But inflation is under control.......at least according to the ss 3.2% cola it is.

Nex

txcoastal1 wrote: »

Remember back in the day when you could get the album and a concert ticket for under $25

I remember seeing top acts for ten bucks a ticket and that was outrageous.

Nex

https://www.usinflationcalculator.com/

mhardy6647

Well, the amusing thing about the language used around inflation for the past few years is the phrase "inflation is down". It's, of course, formally true and even accurate. The problem is that there appear to be lots of people who don't understand what it means.
Inflation refers to the increase in price of an item or service over time. Positive inflation means prices are going up -- and, indeed, they are. The rate at which they're going up has decreased, so, yes "inflation is down" -- but that only means prices are going up more slowly than they were. BUT... They're still going up.
... and it's tempting to think, "heck, 3% per year? That's nothin'!" Which is sort of true -- from one year to the next. But what about 3% per year, year after year? Say -- after 5 years, or 10 years, or 50 years. Ruh-roh.
Let's do a little math! An annual rate of inflation of 3% means that "prices" will be increased (on the average, however that average is determined) by 3% twelve months from "now" (whenever "now" is). If that 3% per year condition is maintained, the outcome will be exponential growth.
Thus, at 3% APR, a theoretical item with a price of $100 today might be expected to cost $103 on 28 Nov 2024. How much on 28 Nov 2025? $106.09 (which is $103 plus 1.03 times $103), etc. This is what an APR of 3% looks like over a few decades, and you can see it's not just going up, but it is going up ever more quickly as the years go by. The relationship between the points isn't a straight line; it's a line that curves upward ("concave upwards" in the language of folks who create or who just stare at graphs for a living).

In mathematical/financial language this kind of assessment's known as "net value of a present sum". It works in our favor when we invest in a CD or bank account (or bond) that pays interest compounded regularly (e.g., annually) but it works against us when the "driver" is inflation and the "sum" is how much something costs! The equation that governs this is Vn = Vo (1 + i )^n, where: Vn is future value (after "n" periods of time), Vo is present value, i is (in this case) the inflation rate, and n is the number of periods (years, in this case). It's that exponential term ("^n") that does the damage!
When the TV or whatever says "inflation is down" it means the value of "i" is lower in that equation -- but it still acts exponentially to raise prices over time.
Here's what that calculation looks like for our $100 in 2023 item at a 3% annual rate of inflation. Not a pretty sight, as the genie in Disney's Aladdin might have put it.

mhardy6647

So that item that costs a hunnert bucks in 2023 will cost your descendants $1921.86 in 2123 if the only factor acting on its price is a 3% annual rate of inflation.
Zoinks!
So... finally -- here's what "inflation is down" looks like:
When the media were freaking out about inflation, the annual inflation rate was ca. 9%. Now inflation is down, and the annual rate is (let's say) ca. 3%. Here's what this looks like in the 100-year window (as above), where year zero is now (2023).

I actually only went to 75 years because after 100 years of sustained 9% inflation, that $100 trinket of today would cost $552,904.10

I need to get some fresh air now...


PS I know all y'all know all this stuff, but maybe it'll be helpful to some of your less savvy colleagues when y'all are talking about how good, or bad, inflation is.

treitz3

It's as bad as when *think 1978*...well, we can't talk about that.

All I know is that a pack of gum was 25¢ back then. It shot up to 50¢ very quickly. This was devastating as a kid with no income. I won't even get into the gas lines and prices....

I wonder what the spin was back then...

Tom

txcoastal1

I run a business that does large projects over 1M
My 2019 cookie cutter bid was 47% higher in material cost in Q3 of 2022

Placed another in Q3 of 2023…went up another 3.2%

Excludes the still high shipping

aprazer402

odcics2

I’ll take our inflation over living any place else.

xschop

mhardy6647 wrote: »

So that item that costs a hunnert bucks in 2023 will cost your descendants $1921.86 in 2123 if the only factor acting on its price is a 3% annual rate of inflation.
Zoinks!
So... finally -- here's what "inflation is down" looks like:
When the media were freaking out about inflation, the annual inflation rate was ca. 9%. Now inflation is down, and the annual rate is (let's say) ca. 3%. Here's what this looks like in the 100-year window (as above), where year zero is now (2023).

I actually only went to 75 years because after 100 years of sustained 9% inflation, that $100 trinket of today would cost $552,904.10

I need to get some fresh air now...


PS I know all y'all know all this stuff, but maybe it'll be helpful to some of your less savvy colleagues when y'all are talking about how good, or bad, inflation is.

They talk about the US inflation
I understand just a little
No comprende, it's a riddle
I'm on a mexican radio

odcics2

:Look at an old Three Stooges short.
Breakfast for 10 cents!
I’m sure folks complained it used to be a nickel.

mhardy6647

odcics2 wrote: »

:Look at an old Three Stooges short.
Breakfast for 10 cents!
I’m sure folks complained it used to be a nickel.

Not that I can document it via google ATM (maybe I should try BingAI or whatever?!), but there was, reputedly, a famous exchange between Harpo Marx and (IIRC) S.J. Perelman. They were in a very fancy restaurant and Harpo was aghast at (or is it by?) the prices. "What can you get here for a quarter?!" exclaimed Harpo. "A dime" deadpanned his tablemate (Perelman, or whoever it was).

Jazzhead

treitz3 wrote: »

It's as bad as when *think 1978*...well, we can't talk about that.

All I know is that a pack of gum was 25¢ back then. It shot up to 50¢ very quickly. This was devastating as a kid with no income. I won't even get into the gas lines and prices....

I wonder what the spin was back then...

Tom

I was working at a grocery store at that time, and spent most of my shift actually taking stock off the shelf, changing the the price tags (to a higher price of course) and putting it back on the shelf! This was before bar codes, obviously, lol. Inflation was that severe. I recall years before, Nixon had invoked some wage and price controls which caused some shortages and other economic/inflationary problems later on.

odcics2

Interesting... Kids today got it easy!

The Highest Inflation Rate in U.S History
Since the founding of the United States in 1776: The highest year-over-year inflation rate observed was 29.78% in 1778.
In the period of time since the introduction of the CPI, the highest inflation rate observed was 20.49% in 1917.

invalid

I went to McDonald's today, got 4 hamburgers and small fries, $11.08. the plain hamburger is $2.49 now, in 2019 it was $.99.

Keiko

But according to the Damien Demento and his merry band of a55 clowns, everything's fine.

Joey_V

invalid wrote: »

I went to McDonald's today, got 4 hamburgers and small fries, $11.08. the plain hamburger is $2.49 now, in 2019 it was $.99.

So dumb
I feel so much poorer now
No wage increase but everything is multiples more expensive

odcics2

invalid wrote: »

I went to McDonald's today, got 4 hamburgers and small fries, $11.08. the plain hamburger is $2.49 now, in 2019 it was $.99.

At my McDonalds, regular burgers are $1.49 and my coffee is a buck.

Apparently, you are getting screwed.