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deflated by inflation

March 1st, 2008 at 03:53 am

Saving log - $3 tip box
Spending log - $1.19 coffee, milk + $9 lunch

Payday. Yippie. I depressed myself by playing around with Inflation Master program on my PDA. My first job out of college in 1985 I made the princely sum of 22K. In 2007 22K had inflated to 42K, just a bit less than what I make now. Economists talk about the stuff anybody at any income level can buy (straight or with credit) and how you can get so much better stuff nowadays versus olden times, but I feel like the Red Queen - running in place to keep in same spot.

I know the saying "be careful what you wish for, you might just get it", but man, a deflation spiral looks really good right now. It does really cause an economy to fall apart - why buy something now when you can get it cheaper later? And you can wait and wait and wait far longer than a business that needs money to provide a good or a service can wait for you to spend. Would be nice not to run, for a few months at least.

3 Responses to “deflated by inflation”

  1. Joan.of.the.Arch Says:
    1204387186

    Not sure I quite get what you are saying. In an economy of inflating prices, your money's buying power is deflated and you see the prospect of it being more and more deflated as inflation continues. Therefore you do not want to wait to buy. You want to buy now, wile your moneyy is worth a little more today (will buy a little more today) than it will tomorrow. Unless your wages are going up at the same rate as inflation you need to buy today, don't wait till tomorrow.

    Are you talking about waiting over a very long period of time so that your money can buy features/products that 20 years ago would have required much more money to purchase? Like--newly developed products that are relatively rare on the market and which have only one producer?

    1985 22K

  2. Joan.of.the.Arch Says:
    1204387495

    1985 22K = 2007 42K? Ugh!

    Not sure I quite get what you are saying. In an economy of inflating prices, your money's buying power is deflated and you see the prospect of it being more and more deflated as price inflation continues. Therefore you do not want to wait to buy. You want to buy now, while your money is worth a little more today (will buy a little more today) than it will be tomorrow. Unless your wages are going up at the same rate as inflation you need to buy today; don't wait till tomorrow.

    Are you talking about waiting over a very long period of time so that your money can buy features/products that 20 years ago would have required much more money to purchase? Like--newly developed products that are relatively rare on the market and which have only one producer and are certainly more expensive now than they will be in 10 years when there are hundreds of makers of the product?

  3. Joan.of.the.Arch Says:
    1204388475

    oops, sorry.

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