Sgt.Sausage wrote:

- quote -

So you've actually tracked the prices you paid for eggs, bread, gas, and
hay for 15 years? Wow! I have no idea what I paid for bread and eggs
last week, much less 15 years ago. Gas maybe. Hay, no. How do you
weight these items to come up with your inflation rate? Do you use the
proportions you bought them in 15 years ago or something? It seems like
gas (and maybe hay) would dominate your inflation rate (unless you eat a
whole lot of egg sandwiches). Gas hasn't gone up 6% per year over the
last 15 years I don't think. How about hay?

-Will

On May 8, 10:07 am, "Sgt.Sausage" <nob...[at]nowhere.com> wrote:
- quote -

Actually food prices have fallen-- especially staples like chicken.
Along with clothes.

A gallon of gas is a gallon of gas. A bale of
- quote -

A gallon of gas is not a gallon of gas ;-). A British gallon of gas
has a higher octane content than an American gallon. Or see Canadian
beer v. American ;-). Gas prices were on a long slide from 1981,
bottoming in 1998. They've now, just about, got back to their 1981
level (but incomes are much higher).

More seriously, a personal computer now is a very different thing than
the IBM PC you could buy in 1981-- something like 1000 times faster,
with 4000 times more memory. And your car has air bags, anti-skid
brakes etc. and a host of features it just didn't have in 1981. And
on average, 40% more horsepower. And it's more reliable.

Your healthcare is also better (but more expensive). The chance of
dying of leukemia has something like halved since the 1970s (childhood
leukemia used to be a death sentence, now it has something like an 80%
cure rate). There are cancers then, that were incurable, that now
have a near 90% 5 year life expectancy.

- quote -

You see the problem above. They are *not* bogus. However they create
a perception that prices have risen by more than the published numbers
(because we take the quality improvements as read, and notice the
sticker price only).

"Will Trice" <wwtrice[at]paragondynamics.com> wrote in message
news:463CAFD0.3090606[at]paragondynamics.com...
- quote -

I don't monitor "quality, features, etc.".

A dozen eggs is a dozzen eggs. A loaf of bread is a loaf
of bread. A gallon of gas is a gallon of gas. A bale of
hay is a bale of hay.

For the basics, you can forget quality, features, etc.
Any attempts to classify these things will only result
in the bogus numbers you can get from Uncle Sugar.


- quote -

On May 6, 6:18 pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:

- quote -

If you urban commute, they are OK, but a Prius will get you similar
fuel economy (sub 25mph it relies on the electric motor and the
regenerative braking). If you highway commute, I think the Smart
would be a really uncomfortable machine, particularly in the land of
the SUVs. They don't accelerate that well, and if anyone hits you,
you are going to be toast-- a pickup or SUV will go right through the
passenger compartment at chest level. I'm not sure about reliability
(outside of a stop-go urban environment).

Perhaps look at one of the 'transplant' small cars like a Chevrolet
Cobalt. Or a Toyota Avensis, or a Honda Civic? Small cars are 40% of
the Japanese market.

There is also a company
- quote -

3 wheel is probably not a good idea. There is a problem with
instability in a 3 wheel car: we used to have them here (the 'Reliant
Robin') and they were deathtraps.

What you really want is a diesel car. The US should have good diesel
cars in 2008-09 model year. The VW Golf diesel is an excellent car
(although spare parts and service tend to be expensive). The Japs
have been slower on diesels, but are catching up.

=====

In article <463DE83E.9090006[at]paragondynamics.com> ,
Will Trice <wwtrice[at]paragondynamics.com> wrote:

- quote -

Neither, actually. Inflation isn't something that I can do anything
about, so I don't invest any time in it. I was just more or less
throwing a few examples out there for discussion sake.

- quote -

I would find it hard to eat $100 of food per week, even going out
to eat as much as I do. But I burn up 2 tanks of gas a week at
$50 per tank just in normal day to day stuff. When traveling,
I can burn 2 tanks of gas a day without too much of a problem.
I have been running at about $300 a month in food, and $500 a
month in gasoline over the recent few months.

I would love to get a vehicle that depended less on gasoline
or got far better mileage. The only problem is that my truck
is just now broken in, it is paid for, and shows no need to be
replaced anywhere in the near future. That leaves the option of
getting a commuter car, but so far, I haven't found anything
out there that is worth the plunge. I am waiting to check out
the Smart cars once they come out. There is also a company
in Iowa that is working on a 3 wheel enclosed car built out of
motorcycle parts--that might be a good commuter option.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

On May 6, 9:38 am, Will Trice <wwtr...[at]paragondynamics.com> wrote:
- quote -

Yes, but when you replace that old 32" tube TV, do you get a 32" tube
model for $399 or do you get a 46"1080p LCD model for $2,599? If you
get the latter, you can't really count the extra cost as due to
inflation, unless you are talking about inflation of wants/
expectations.

Dave

John A. Weeks III wrote:

- quote -

This is true, it'd be pretty hard to buy a new TV without a remote these
days.

- quote -

Do you weight these, or do you just carry three inflation rates?

- quote -

Wow! Looking at my budget I see that I spend about 3.5x as much on food
as I do on gas. Of course, in a thread several months ago I discovered
that my spending is radically different than most on this newsgroup.
And you might eat much more frugally than me, I haven't been to a Taco
Hell in many, many moons.

-Will

In article <yobbqgyu08t.fsf[at]panix1.panix.com> ,
BreadWithSpam[at]fractious.net wrote:

- quote -

You are right...I am building up an asset by paying a
mortgage. But at the same time, I have upkeep and taxes
that I didn't have when I rented. Since one did not seem
dramatically larger or smaller than the other, I called
it a wash rather than doing an in depth accounting.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> writes:

- quote -

The effective cost of housing when calculating inflation
is one of the trickiest (and arguable) areas. Just because
your mortgage has been paid off and your apparent out-of-pocket
expenses have gone down, you still have an effective cost
in tying up a heap of capital in the house - money you'd
have made had you not so tied up that capital.

The official CPI used to do it via an "owners equivalent rent"
cost of the housing when one owns one's own home (whether
it's paid off or not).

Anyway, the point is not that you're doing it wrong - there
is no real "wrong" in this - there are just questions of
what's the point of the "inflation" number you're coming
up with - what does it actually mean and what are you trying
to capture with it? It may well be that for figuring out
a "personal inflation number" which captures how exactly
your personal everyday out of pocket cash costs change
should, in fact, ignore all that stuff and just add up
your mortgage, homeowners insurance and property taxes
and that's that. It makes for a very unsmooth curve -
you can refinance or pay off your mortgage and it looks
as if your prices have changed. They really haven't -
not signficantly (maybe if interest rates changed vastly,
but what if interest rates haven't - or you just paid
the place off). What's actually happening is that your
personal *costs* are changing, not *prices*.

It'd be a worthless number on a macro or aggregate
level and no economist would look at it twice. But
it may well be the right number on a personal level
and perfect for financial planning. Apples versus
oranges, but if you're making orange juice, it just
doesn't matter what the apples cost.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

"John A. Weeks III" <john[at]johnweeks.com> writes:

- quote -

When you were paying $875, was that rent? Since you're
paying $500 now towards a mortgage plus the $175 fee,
are you also including the cost of capital sunk into
the home (ie. the forgone interest on your down payment)?

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:V9Sdnb5ppqP8VqHbnZ2dnUVZ_sOknZ2d[at]comcast.com...

- quote -

When I was young I was on top of the world if I found a penny, or some other
coin, on the sidewalk. Today I don't bother to stoop down and pick it up
unless it's at least a nickel. That is inflation.

John A. Weeks III wrote:

- quote -

When I started working in 1984, gas was $1.25. Call it $3.00 today and
in 23 years that average increase was 3.9%. $1.25 in 1984 inflates to
$2.51 today using the CPI numbers. So over that long period, it did
increase a bit faster. What they would suggest is that when MPG
adjusted, your cost per mile has probably dropped, I won't go there. You
are right about the 10 years though, the chart for gas
http://www.randomuseless.info/gasprice/gasprice.html
Shows a sideways trend, and more recent run up. But no one remarked how
great it was that gas didn't even pace inflation from 1980 right through
the late nineties.

My memory isn't that great for the cost of food, so I can't comment too
much there.

JOE

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:john-9A26CC.11534605052007[at]sn-radius.vsrv-sjc.supernews.net...
- quote -

My housing costs have decreased. I no longer have a mortgage. 5-6 years ago
we put on a new roof and replaced all the windows with more energy efficient
ones, so our utility bill is also less. Property taxes are up, but only
about 10% over your 10 year period.

- quote -

I don't make purchases at fast food restaurants. I think we're eating
differently than we did 10 years ago, too. Less beef, more chicken and fish
and the fish is often given to us. Still, our grocery bill is up a bit,
perhaps 15% in 10 years.

- quote -

Yes, gasoline is up horrendously. We would gladly pay your $2.88 - today the
cheapest we can buy gas is $3.22. However, our 6 year old car has only
34,000 miles on it and that's after a 6,000 driving vacation last summer.
Gasoline is not a particularly big percentage of our overall budget. With no
car payments and both vehicles with relatively low mileage, we don't spend
much in this area.

No, our personal inflation rate is far less than 11%. In fact, I think it's
less than 3%, though I don't have the numbers to prove it. I think sick care
will impact us more as we get older, even though insurance cost increases
will not be part of that picture. I say sick care because the medical
community doesn't do anything to make us healthy, they only treat our
illnesses. Only you can do something about your health. Go take a walk, and
eat your vegetables - that will likely have a positive impact on your
personal inflation rate.

Elizabeth Richardson

In article <463CAFD0.3090606[at]paragondynamics.com> ,
Will Trice <wwtrice[at]paragondynamics.com> wrote:

- quote -

Quality and features really don't count if there are no alternatives
in the market. For example, gas might burn cleaner, but I have
no choice in what gas to use either now or 10 years ago, there
is only one kind on the market.

I look at the three largest items in my budget, and see how
they have done over the past 10 years:

Housing - 10 years ago, I paid $875/mo for a 1100 square foot
apartment. Today, I pay $500/mo for a 1900 square foot home.
Utilities are about the same between the two, but I have a
commons fee of $175 for the home owners association. So, this
is about a wash.

Food - 10 years ago, I could get 3 items and a medium soda at
Toco Bell for $2.78. Today, 3 items are about $5, and I won't
pay $1.50 for a soda, so I go across the road and get a soda
from the machine at Wal-Mart for 60 cents. So, food has about
doubled in 10 years.

Gasoline - 10 years ago, I was paying $0.99 to $1.20/gallon
for gasoline. Today, it is $2.88/gallon on average. So, gas
was far more than doubled.

Where this hurts is that gasoline is now the biggest budget
item that I have, often being more than my house payment or
food bill in a given month. This has to be my next item to
attack--how can I travel and not pay so much for gas.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

Sgt.Sausage wrote:

- quote -

Are you saying that your expenses are increasing 6.2% per year, or that
the price of the various things you buy have risen 6.2% per year? How
do you weight the prices of things you buy? What items did you select
to monitor? How do you account for changes in quality, features, etc.?
This is something I wouldn't mind trying (i.e. tracking my personal
inflation rate), but it sounds like a lot of work, really boring work at
that.

-Will

On May 5, 1:56 am, "Sgt.Sausage" <nob...[at]nowhere.com> wrote:
- quote -

My numbers for my area show more like this:

1%
1%
350%
3%
3%

That big jump is when you decided to buy one of the overinflated homes
in this area. If you count home prices as part of the inflation
numbers (they are expenses for homeowners), 11% over the average 4-
year holding period for a home sounds about right.

"rick++" <rick303[at]hotmail.com> wrote in message
news:1178316773.437381.242140[at]n76g2000hsh.googlegroups.com...
- quote -


I've been monitoring my expenses for the last
15 years or so. My number runs about 6.2% these days.
A far cry from the official 3 to 3.5% numbers,
but certainly nowhere near 11%.

Harkon wrote:

- quote -

The 11% claim is sandwiched between ramblings on hedge funds and a
prediction that "everything is obviously roaring out of control and
anyone can see what will happen next: hyperinflation."

I'd look at http://www.westegg.com/inflation/ and decide for yourself.
Some costs (health care for one) have risen faster than inflation,
others, not as fast. The remarks at the site above are unsubstantiated
to say the least.

JOE

Silly.
Any indvidual can monitor their own year-to-year budget to see how it
increases.
Mine isnt the official 3% nor the this 11%.

that's what the writer claims at
http://elainemeinelsupkis.typepad.co...einel_s_2.html

if true, I'm sunk as far as my retirement savings