Inflating our way to death!

Cost of Living 1962 – 2012

How Much things cost in                 1962                                     1987                       2012                  

Yearly Inflation Rate USA              1.20%                                  3.66%                       1.02%              Ratio ’62-’87      Ratio ’87-’12
Year End  Jones Average                    652                                  1938                       12,217                      3X                       6X
Average Cost of new house    $12,500.00                             92,000                 282,600                        7X                        3X
Average Income per year         $5,556.00                             24,350                   40,584                        4X                   1.66X
Average monthly rent                   $110.00                                  400                     1,020                     3.6X                   2.55X
Tuition to Harvard University   $1,520.00                             9,985                     52,650                     6.5X                       5X
Average Cost of a new car          $3,125.00                            10,305                     30,425                       3X                       3X
Eggs per dozen                                          .32                                  .65                         2.13                         2X                       3X
Gas per Gallon                                          .28                                  .89                         3.80                         3X                       4X

As bad as inflation is today it’s actually been lower for most things in the past twenty-five years compared to the previous twenty-five year period. For example the average price of a home was seven times what it was from 1962 to 1987 and only three times from 1987 to today. As we also see average car prices have stayed fairly consistent over the years rising at about a three times ratio in both periods. What is vastly different today is with regard to average income per person going from 6.5times the 1962 rate in 1987 and increasing only by a factor of 1.66 times from 1987 to the present.

So the good news is that inflation is moving slower than it was twenty-five years ago but the slowing of incomes per worker is about to steamroll us all. It’s like telling someone with a charging herd coming straight for them that the herd is slowing their speed, so instead  of running you over in 1 minute it will run you over in 3 minutes !