Price/Cost Indexes from 1875 to 1989; Estimated to 2010Hart, Michael
General
Price/Cost Indexes from 1875 to 1989; Estimated to 2010
Hart, Michael
Cost and standard of living
Below you will find a short index of the computers we bought
since 1979, and then a price index from 1875 to 2010 in case
you want to look up some prices mentioned in certain years a
decade or a century ago would actually be today.
For example, a teenager watching Roger Rabbit mentioned that
the $100 Bob Hoskins received for working on the case was an
extremely low figure. However, an examination of the figure
below for 1947 will reveal that prices then were about 17.5%
which would make Hoskins' fee about $600 in our 1993 dollars
we use today. . .even if the physical dollars are the same.
So, what happens to the value that was lost from our dollars
that do not buy as much by a factor of 17.5% since 1947 ?
Let's imagine for a moment that we are financial wizards and
have all the financial connections open to such wizards; the
early 1970's are a perfect example: Nixon is in office, and
he releases the dollar from the $35 per ounce price supports
the dollar has had since Roosevelt took us off the standards
of direct gold exchange to end the Depression in the 1930's.
As an example, we send a million of our dollars to somewhere
we CAN buy gold [it was illegal then for US citizens to have
gold, unless they were coin collectors or worked gold in the
professions, such as dentistry, jewelry, etc.]
So, we have bought a million dollars worth of gold at around
$35 per ounce, which was a pretty fixed price at the time.
Now, the price restrictions of $35 per ounce are removed and
the price of gold goes up to $755 per ounce, just about what
it did during the next few months after the price release.
Now our gold is worth 21 times as many dollars as it was, so
we now can sell the gold and get 21 million dollars.
When we spend this 21 million dollars, we are competing with
all the other dollars in the marketplace, and prices have to
go up as a result, because there are now more dollars but no
more anything else. . .so dollars get cheap, and all dollars
everywhere give up a percentage of their value to pay for an
increase in the number of dollars WE have. So, if all these
dollars lose 5% of their value, then we can buy a 20 million
dollar share of the future with our 21 million dollars while
everyone else loses 5% of the money they let sit in pockets,
under the mattress, or wherever.
Half of the value of every dollar disappeared from 1979-1993
[a period in which the Cost/Price Indexes rose at about 6%].
And those 1979 dollars would buy only half as much as a 1969
dollar bought, when prices were rising even more quickly.
And those 1969 dollars were buying only half of what dollars
bought in 1947.
Here are the doubling years:
Public-domain text, read in full here on John Shaqi.
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