I've written often about inflation and its dangers in these pages, possibly so much that some readers have wandered off to read something more entertaining. Oh, well . . . can't please everybody.
Now Francis Porretto does some calculations, and comes up with an interesting answer.
... the inflation rate from 1997 to 2025, if compounding occurs annually, was approximately 7.27%.
That's 7.27% every year on average over the past 28 years. Click over to his place to read how he calculated that inflation rate. Based on my own back-of-the-envelope calculations, and input from experts in the field, I'm pretty sure he's in the ballpark on that one.
If that rate of inflation, annually over almost three decades, doesn't scare the crap out of you, you clearly don't understand the situation. It's why things cost so much today, and why we're running a deficit that's well on its way to hit $40 trillion before long.
Furthermore, that sort of inflation and its consequences are unsustainable. They cannot go on. Sooner or later (and I'm betting on sooner rather than later), things are going to cave in . . . and then we're all likely to find out what life during the (previous) Great Depression was like.
Peter
yeah. I figured it out years ago and started putting my money or any spare cash into "stuff"
ReplyDeleteas keeping it in the bank seem like a joke.
then too, I tend to go for canned goods as they keep rather well. take coffee, I have about 20 pounds of it in cans. and the price of it when I bought it was a LOT lower than now a days.
gold and silver are nice to have, but you can't eat it. food on the other hand is always a good bet.
The previous Great Depression will be a much smaller example of what happens this time as previously, we had family farms (my grandparents). Now they have been turned into factory farms. Previously, we had many types of manufacturing supplying goods internally to the US. Now, they have all been offshored and the factories demolished.
ReplyDeleteSo when the collapse occurs, farms and industries that sustained us thru the previous Great Depression no longer exist and we're now dependent on long "just in time" supply chains.
Hope you have been preparing.
Debt and the resulting debasement of a Nations currency has destroyed many Empires. Foolish wars to distract the citizens just creates more debt and destruction when the house fall down.
ReplyDeleteWhen Biden's magic 81 million votes didn't show up for the Cackler, I suspected the powers that be allowed Trump to "Win" to be the Hoover 2.0 Greater Depression edition.
Remember to read that Wikipedia article and notice how blaming Hoover made socialist FDR a shoe in for how many terms?
The long march continues. Pray for wisdom and protect your trusted friends and trusted family. Trusted folks and faith in God will get you through tough times.
Meanwhile, in the real world, if you look at the final vote totals about half of the gap between Biden and Harris is the result of people switching their votes, and the rest is the result of blue state voters staying home.
DeleteI suspect what comes will be FAR worse than the Great Depression.
ReplyDeleteInflation isn't the only reason the debt is that large - there is plenty of blame to go around, starting with politicians and special interest groups but definitely not stopping there!
Jonathan
You're not supposed to save/invest for retirement. The definition of "middle class" includes a secure retirement. The middle class is now gone.
ReplyDeleteMy father and mother both weathered the Depression, my father being 9 when it began and my mother 6. They both had a challenging go of it, but my mother probably had it easier. Growing up in rural poverty in Oklahoma, the economic collapse didn't mean much to her. She had been inadequately clothed and poorly fed before 1929 and remained so for some time after. My father grew up in relative ease, until his own father left them in the depths of the Depression and they lost everything. I am an old man now, and I frankly don't know what I will do when it all falls apart.
ReplyDelete"Back in the 20s, they said we were dirt poor. Then Wall Street collapsed, and we were dirt poor, but had the farm to feed us." paraphrased from a history of the Nippenose Valley (PA), where my grandfather grew up.
DeleteIt is definitely worse than the "official" numbers and we are going in the wrong direction but using the price of one meal from one place doesn't pass the smell test. Using that 7.27% inflation and going in reverse the equivalent of my current income back in 1997 would be $25k ($180k today). In 1997 I was a Second Class Petty Officer in the Navy and making about $22K a year (including sea pay and COLA for Japan).
ReplyDeleteNow, I went down a bit of a rabbit hole and this is only tangentially related, but the average individual income in the US in 1997 was ~33k so I was making 76% of national average in the Navy, which doesn't include not having to pay for food or lodging, etc. In 2023 (most recent data I could find) the average individual income in the US was ~42K and a Navy E-5 (over 4) makes ~38k or 90% of national average, so that is at least moving in a good direction.
There is no comparison between my current purchasing power and back in 1997.
Yup, that is about the average real inflation rate that I am seeing over the last 30 years. Horrendous.
ReplyDeleteIn 1965, the federal minimum wage was $1.25. Today, five 1964 90% silver quarters are worth 1.24 times~25 face value for "junk silver," or $31.25. (specific multiple depends on dealer, and if you are looking at "buy" or "sell" price). Yeah, I'm thinking the "official" inflation numbers are rather lower than the real rate of inflation.
ReplyDelete