Examples of inflation:
I bought cans of tuna. They are now 5 OZ cans. Previously they were 6 OZ cans. The price is the same.
Bought a plastic bottle of Ovaltine. It was 12 OZ net weight. Previous bottle was 14 OZ Same price.
Bought coffee bag - private label at 12 OZ. Used to be 16 OZ. Same price.
Cans of sode (pop) are now 2 OZ smaller. Same price.
AT restaurants, I have noticed that entrees are 50¢ to $2.00 more for the same meal.
AT Pizza restaurants, I noticed that they are 50¢ to $1.00 more for the same size pizzas.
My electricity cost more per kilowatt hour.
My medical insurance premiums are up 12%
My car insurance premiums are up 9% for a one year older car.
My home insurance is up almost 10%.
My real estate taxes have increased by 11% and the value of my home has fallen by 10%.
All this in the last year. My "cost of inflation" is about 10% increase over last year's costs.
That is an example of inflation. Inflation is rising faster than my income. That means my standard of living is declining and my investments are worth less.
Imagine how fast inflation will increase when interest rates begin to rise in a year or so.
Gasoline prices were on its way down, but stopped its decline and is now rising.
The President Bush tax cuts are about to expire on 1.1.13. If they expire, my cost of living will decline an additional 8%.
The Chicago teachers are demanding a 35% salary raise because they will have to "work an extra 15 minutes per day". And they are planning a strike to force Chicago to give them something. That will further increase my future real estate taxes and state taxes.
INFLATION IS HERE - NOW - AND IS GETTING READY TO ROAR SOON.
INFLATION IS THE HIDDEN TAX.
WHY?
BECAUSE IT TAKES THE VALUE FROM YOUR MONEY AND GIVES YOU LESS.
That's the way I see it...
Straight Talk with Jay Clifford.
Friday, July 20, 2012
Saturday, July 7, 2012
Really - What is inflation?
When you spend the same amount for a smaller box of food or a smaller candy bar or a smaller can of soda, that is inflation. When you purchased anything today that cost less a few years back, that is inflation.
Ever watch an old movie and see a menu for food with something like this:
Egg Salad sandwich, pickle and fries 25¢ - In a large city this would cost $5
Hot dog and fries plus a soda 25¢ - In a large city this would cost $5
1949 Plymouth $250 - OK this would be an antique and worth more as an antique.
3 Bedroom, 2 bathroom home - new construction $500 (in 1947) Same home today costs $325,000
16 OZ Largest Chocolate Candy Bar 5¢ Today it's 14 OZ and cost $1.99
Movies cost 25¢ in 1947 and you saw 2 full length movies. In 1960 the cost was $1.25.
In 1985 the cost was $5.25. In 2012 the cost is $12.00 with only one full length movie.
These are examples of inflation. It creeps up on you but it is a steady creep.
Now let's look at inflation in another way. Assume you have a savings account with $1000 in it.
And today you could buy $1000 worth of merchandise. In one year from now, that $1000 will only be able to buy $965 worth of the same merchandise. That is inflation. If you take this example out for five years, that $1000 will only be able to purchase about $825 worth of the same merchandise.
What is inflation? It is a decreasing in value of your money. With inflation, a dollar today will be worth less tomorrow. Some people call inflation an hidden tax.
Are the retailers making more money with these higher prices? NO! Their costs are going up and the money they get for their products and services will only be able to buy less each year. So where is the money going? That's why it's called a hidden tax. The money gets circulated and just disappears
in the higher costs of everything.
When inflation gets out of control, and the value of the money is dropping faster each day, that is the beginning of a complete collapse in value of that money.This has happened many times since the Roman times and the people of those countries became instantly poor no matter how much money anyone had in the bank. That is inflation gone wild.
The USA and many of the major countries in the world are now going through increased inflation.
And that's the way I see it...
Straight Talk with Jay Clifford.
Ever watch an old movie and see a menu for food with something like this:
Egg Salad sandwich, pickle and fries 25¢ - In a large city this would cost $5
Hot dog and fries plus a soda 25¢ - In a large city this would cost $5
1949 Plymouth $250 - OK this would be an antique and worth more as an antique.
3 Bedroom, 2 bathroom home - new construction $500 (in 1947) Same home today costs $325,000
16 OZ Largest Chocolate Candy Bar 5¢ Today it's 14 OZ and cost $1.99
Movies cost 25¢ in 1947 and you saw 2 full length movies. In 1960 the cost was $1.25.
In 1985 the cost was $5.25. In 2012 the cost is $12.00 with only one full length movie.
These are examples of inflation. It creeps up on you but it is a steady creep.
Now let's look at inflation in another way. Assume you have a savings account with $1000 in it.
And today you could buy $1000 worth of merchandise. In one year from now, that $1000 will only be able to buy $965 worth of the same merchandise. That is inflation. If you take this example out for five years, that $1000 will only be able to purchase about $825 worth of the same merchandise.
What is inflation? It is a decreasing in value of your money. With inflation, a dollar today will be worth less tomorrow. Some people call inflation an hidden tax.
Are the retailers making more money with these higher prices? NO! Their costs are going up and the money they get for their products and services will only be able to buy less each year. So where is the money going? That's why it's called a hidden tax. The money gets circulated and just disappears
in the higher costs of everything.
When inflation gets out of control, and the value of the money is dropping faster each day, that is the beginning of a complete collapse in value of that money.This has happened many times since the Roman times and the people of those countries became instantly poor no matter how much money anyone had in the bank. That is inflation gone wild.
The USA and many of the major countries in the world are now going through increased inflation.
And that's the way I see it...
Straight Talk with Jay Clifford.
Subscribe to:
Comments (Atom)