US

Why Inflation Hurts More Than it Did 30 Years Ago

WASHINGTON (AP) — Inflation spooked the nation in the early 1980s. It surged and kept rising until it topped 13 percent.

These days, inflation is much lower. Yet to many Americans, it feels worse now. And for a good reason: Their income has been even flatter than inflation.

Back in the ‘80’s, the money people made typically more than made up for high inflation. In 1981, banks would pay nearly 16 percent on a six-month CD. And workers typically got pay raises to match their higher living costs.

No more.

Over the 12 months that ended in February, consumer prices increased just 2.1 percent. Yet wages for many people have risen even less — if they’re not actually frozen.

Social Security recipients have gone two straight years with no increase in benefits. Money market rates? You need a magnifying glass to find them.

That’s why even moderate inflation hurts more now. And it’s why if food and gas prices lift inflation even slightly above current rates, consumer spending could weaken and slow the economy.

“It feels far more painful now than in the ’80s,” says Judy Bates, who lives near Birmingham, Ala. “Money in the bank was growing like crazy because interest rates were high. My husband had a union job at a steel company and was getting cost-of-living raises and working overtime galore.”

Bates, 58, makes her living writing and speaking about how people can stretch their dollars. Her husband, 61, is retired. They’ve paid off their mortgage and have no car payments. But they’re facing higher prices for food, gas, utilities, insurance and health care, while fetching measly returns on their savings.

“You want to weep,” Bates says.

Consumer inflation did pick up in February, rising 0.5 percent, because of costlier food and gas. Still, looked at over the past 12 months, price increases have remained low. Problem is, these days any inflation tends to hurt.

Not that everyone has been squeezed the same. It depends on personal circumstances. Some families with low expenses or generous pay increases have been little affected.

Others who are heavy users of items whose prices have jumped — tuition, medical care, gasoline — have been hurt badly. But almost everyone is being pinched because nationally, income has stagnated.

The median U.S. inflation-adjusted household income — wages and investment income — fell to $49,777 in 2009, the most recent year for which figures are available, the Census Bureau says. That was 0.7 percent less than in 2008.

Incomes probably dipped last year to $49,650, estimates Lynn Reaser, chief economist at Point Loma Nazarene University in San Diego and a board member of the National Association for Business Economics. That would mark a 0.3 percent drop from 2009. And incomes are likely to fall again this year — to $49,300, she says.

Significant pay raises are rare during periods of high unemployment because workers have little bargaining power to demand them.

They surely aren’t making it up at the bank. Last year, the average nationwide rate on a six-month CD was 0.44 percent. The rate on a money market account was even lower: 0.21 percent.

Now go back three decades, a time of galloping inflation, interest rates and bond yields. When Paul Volcker took over the Federal Reserve in 1979, consumer inflation was 13.3 percent, the highest since 1946. To shrink inflation, Volcker raised interest rates to levels not seen since the Civil War.

As interest rates soared, CD and money-market rates did, too. The average rate on money market accounts topped 9 percent. Treasury yields surged, pushing up rates on consumer and business loans. The 10-year Treasury note yielded more than 13 percent; today, it’s 3.5 percent.

By 1984, consumers were enjoying a sweet spot: Lower prices but rising incomes and still-historically high rates on CDs and other savings investments. Consumer inflation had slid to 3.9 percent. Yet you could still get 10.7 percent on a six-month CD.

Even after accounting for inflation, the median income rose 3.1 percent from 1983 to 1984. At the time, workers were demanding — and receiving — higher wages.

More than 20 percent of U.S. workers belonged to a union in 1983. Labor contracts typically provided cost-of-living adjustments tied to inflation. And competition for workers meant those union pay increases helped push up income for non-union workers, too.

Last year, just 12 percent of U.S. workers belonged to unions. And among union members, a majority now work for the government, not private companies. Wages of government workers are under assault as state governments and the federal government seek to cut spending and narrow gaping budget deficits.

Workers’ average weekly wages, adjusted for inflation, fell in February to $351.89. It was the third drop in four months.

The result is that even historically low inflation feels high. So “when you mention low inflation to real people on the street, they immediately roll their eyes,” says Greg McBride, senior financial analyst at Bankrate.com.

Falling behind inflation is something many people hadn’t experienced much in their working careers until now. In the 1990s and 2000s, for instance, most Americans kept ahead of rising prices. Inflation averaged under 3 percent.

And inflation-adjusted incomes rose steadily from 1994 to 1999. Once the 2001 recession hit, incomes did falter. But after that, they resumed their growth, rising each year until the most recent recession hit in December 2007.

Rates on six-month CDs were also much higher than they are now: They averaged 5.4 percent from 1990 to 1999 and 3.3 percent from 2000 to 2009.

These days, though, Americans face the certainty of higher prices ahead.

Whirlpool, Kraft, McDonald’s, Clorox, Kellogg, and clothing companies such as Wrangler jeans maker VF Corp., J.C. Penney Co., and Nike say they plan to raise prices. Whirlpool, which makes Maytag and KitchenAid appliances, says it’s raising prices in response to higher raw material costs.

Kellogg, which makes Frosted Flakes and Pop Tarts, is increasing prices on some products to offset costlier ingredients. Kellogg is responding to soaring costs for commodities including wheat, corn, sugar, cotton, beef and pork.

Vickens Moscova, a self-employed marketer in Elizabeth, N.J., says he’s paying more for staples like cereal, bread, eggs and public transportation. Yet he’s making little from his savings.

“It is a huge pinch,” says Moscova, 25.

Though higher gasoline and food prices may lift the inflation rate in coming months, the Fed says it doesn’t think inflation will pose a long-term threat to the economy. The central bank projects that inflation won’t exceed 1.7 percent this year.

But if oil prices, now around $101 a barrel, were to go much higher, economists say heavier fuel bills would cause people and consumers to cut back spending on cars, appliances and other items.

Another recession would be possible if prices began to approach $150 a barrel. Back in 1983, a barrel of oil cost just $29.40 — or $65 in today’s prices, adjusted for inflation.

All that said, today‘s consumers are fortunate that today’s lower rates mean one major household cost remains far lower than in the 1980s: a mortgage.

Thanks, in part, to the Fed’s efforts to push down loan rates starting with the financial crisis, the average rate on a 30 year fixed mortgage is below 5 percent.

The comparable rate in 1981? 18 percent.

Comments (61)

1 2
  • howardstark
    Posted on March 19, 2011 at 6:06pm

    It is only going to get much worse.

    The Fed will refuse to combat stagflation as the government will not be able to continue to fund its exploding deficits and debt.

    While this may feel like the inflation of the early 80s, the ending is going to be much different.

    The Fed is in check-mate: http://goldsilverrealestate.com/?p=205

    Report Post »  
  • W@nd@
    Posted on March 19, 2011 at 5:48pm

    this is how the govt pays off exsisting debt thru inflation….it robs all of us
    our $$$$ wont buy crap before too long!
    people can stretch things just sooooooo far and
    there isn no more stretch left…
    how these people look themselves in the mirror is beyond me…..
    oh thats right you have to have a heart and a conscience
    to feel culpable…..

    Report Post »  
  • Sinista MACE
    Posted on March 19, 2011 at 2:37pm

    Wanna talk about some INFLATION?

    Try this for inflation, the face value of an american gold coin is $50.

    The value of a gold coin today is….

    You already know what it is.

    Abolish the Federal Reserve.

    Report Post » V-MAN MACE  
  • TeaPartyPatriot
    Posted on March 19, 2011 at 1:47pm

    Let’s not forget the OFFICIAL feckless fed statement: THERE ARE NO BAILOUT BERNANKE BUBBLES from the reckless, irresponsible zero-interest rate and QE2 policies — zip,none, zero, nada, zilch!

    FACT: Silver prices are at a 30 year high – THIS IS NOT A BAILOUT BERNANKE BUBBLE
    FACT: The S&P 400 Mid-Cap Index is at a record high over more than a 20 year period – THIS IS NOT A BAILOUT BERNANKE BUBBLE
    FACT: Cotton, sugar, copper and countless other items are at record high prices – THIS IS NOT A BAILOUT BERNANKE BUBBLE
    FACT: food prices around the world are reaching historically high levels – THIS IS NOT A BAILOUT BERNANKE BUBBLE

    Just as “You Lie!” hussein doesn’t see his $14+ TRILLION DEBT, the Feckless Fed:

    SEES NO bailout bernanke bubbles
    HEARS NO bailout bernanke bubbles, and
    SPEAKS NO bailout bernanke bubbles.

    As these NON-EXISTENT bubbles burst, LOOK OUT !!!!!

    BTW: bailout bernanke also says THERE IS NO INFLATION – pass it along …it’s the joke of the day !

    Report Post » TeaPartyPatriot  
  • fortyfivenorth
    Posted on March 19, 2011 at 1:30pm

    In the 80s people were borrowing and the banks paid high rates of interest so that people would buy CDs, etc., providing the banks with money to lend. Now the gov. is printing money and giving it to the banks at 0%. Banks no longer need citizens to invest. This is probably a large factor in the failure of the small banks across the country. They are not getting a share of gov. largesse and cannot compete.

    Report Post » fortyfivenorth  
  • Oathkeeper1775
    Posted on March 19, 2011 at 1:24pm

    This is all by design; the government and the elite both want the middle class’ money, lives and labor.

    Just as there is only so much air in a tire, the money is too limited. As soon as a leak is detected, the elite finds it and plugs into it.

    Money and power; Individual wealth and self governance is thier enemy.

    When the money is spread out and circulating, it is not in the hands or the control of the elite, the government, the crooks.

    They want people standing in line for bread, water and essentials, they want us to be dependant on them.

    Fight, earn your own money, sustain yourselves.

    Report Post » Oathkeeper1775  
  • sbenard
    Posted on March 19, 2011 at 1:06pm

    Inflation is much higher than the article states. And take it from someone that works in agriculture commodities — its going to go MUCH higher. The inflation is only just beginning.

    CNBC wrote yesterday:
    “A special index created by the Labor Department to measure the actual cost of living for Americans hit a record high in February, according to data released Thursday, surpassing the old high in July 2008.”

    Report Post » sbenard  
    • sleazyhippo
      Posted on March 19, 2011 at 2:28pm

      Suntanned Americans in sandals receive one full month of Combat pay for a Friday spent eating Steak & Shrimp by the pool in the Iraq Green Zone, never hearing a shot fired.
      It costs the taxpayer 2 to 3 times what car owners pay for the mandatory corn ethanol in our Gasoline. It costs $1Million/Year to deploy 1 average soldier to Afghanistan. Gasoline shipped to the Afghanistan theater costs $400.00 per Gallon.
      We pay 100% disabled veterans a full entitlement package, plus health care even if they have a great job (some do not have wealthy families and can’t find work).
      Each TSA Employee costs the taxpayers about $90,000 in annual pay and deferred benefits – plus they are Federal employees! Plus thay get Free Weapons Training. Plus they are going to have a Union!

      Report Post » MONICNE  
  • TOPOFTHEGAME
    Posted on March 19, 2011 at 10:16am

    WETHEPEOPLE:::::::: We are getting close to our “Perfect Storm”, inflation, high prices, interest rates going up, no jobs, Unions rioting, local & state & Fed pension funds, housing debacle, spending WE MUST GET OUR ”AMERICA” BACK IN ORDER “”“quickly””"

    Report Post »  
    • Uncle Crusty
      Posted on March 19, 2011 at 6:30pm

      It’s like Gerald Celente said several years ago, there will be tax revolts, food riots and gang/mob rule! The year of terror is upon us now, and if you’re not somewhat prepared, may God have mercy on your soul. The straw that broke the camel’s back is Japan, the economic ramifications from that will put the world to it’s knees, you will see. Now that China, and now Japan, will not be buying our Treasuries, who picks up our debt slack? They are gonna funnel the long term debt to short term and print into oblivion, to pay it off in cheaper dollars. Our fate is caste, and sealed in reckless spending, and the party is over, the hangover is going to be great! Have a Lager!

      Report Post »  
  • OH, I Get It!
    Posted on March 19, 2011 at 10:11am

    “Inflation is less than in the 80′s” is WRONG! Today’s inflation is calculated WITHOUT energy and food being included. Just wait until the next $600Billion in Fed DIGITIZING of our debt hits.

    Report Post » OH, I Get It!  
  • donh2
    Posted on March 19, 2011 at 9:57am

    The government did not LIE about inflation 30 years ago. They did not deny it was happening, and fixed income payments were adjusted to compensate the elderly for cost of living increases.

    Report Post »  
  • CHICAGOTHUGBUCKET
    Posted on March 19, 2011 at 9:31am

    You can not sell socialism to people if they are not hungry. Inflate the food prices through restrictive energy and production policies and you have a crisis worth amendments. The university of Chicago and Madison Wisconsin have plotted our destruction since Albert Parsons and August Spies in the great depression of 1870′s. No Liberals here really know the roots of the Chicago Labor movement but the progressives do.
    God Help me and my family when they turn into the Looters and Moochers they always do. History will continue to repeat itself as long as your boys are brought up to be girls and young women are feminists who love a pet more than babies or the idea of procreation. the more equal class is rewarded with government jobs and passing grades even when they are failing this has been sold to the public as fairness or anti discrimination. Notice if you take the opposite meaning of the name of every progressive law it is the what results in consequence. Glenn needs to investigate Chicago since 1860 and he will find this Devils roots.

    Report Post » CHICAGOTHUGBUCKET  
  • ilmom3
    Posted on March 19, 2011 at 9:04am

    Remember, we’ve experienced massive inflation due to deficit spending most of our lives and have become accustomed to it because it happened slowly over time – 58% since 1980. The CPI data change is from prior year to current year.

    Besides, since that time Congress has changed the way it once calculated inflation data. Instead of comparing the price, in two different periods, of a fixed basket of goods and services, now the CPI is calculated to reflect changes in the cost to maintain a constant standard of living.

    For instance instead of comparing the same fixed items in quality and quantity it now uses comparison items that are not equivalent, so if a family in 1980 purchased steak, CPI uses a comparison of ground beef. So in turn the gov’t can claim lower inflation.

    Report Post »  
  • robin.kevin
    Posted on March 19, 2011 at 8:52am

    That 2.1% is an average… so while some prices have raised much more, other much less. Its just an average.

    The best advice I can give anyone is live as cheaply as you can. Is your car still running fine, getting you from point A to point B? Then get it paid off and keep it, why get rid of one that’s just fine and go back into debt cause the newer one is a little nicer? I hear people complain about how hard times are yet fast food joints are still bringing in business. Why? Its cheaper to cook budget meals, fix plenty to last a few days pack it as lunch instead of going to the burger hut. Its all about making do with what you have.

    Report Post » robin.kevin  
    • FlowerBell
      Posted on March 20, 2011 at 6:18am

      That’s the new catch phrase around our home, “Make do!” It has brought about some really creative ideas. After layoffs and losing just about everything in ‘08 I wasn’t sure if I could ever have a positive attitude again. But life goes on and it’s way better when you enjoy what you have and count your blessings.
      A great awakening is happening across our country.

      Report Post » FlowerBell  
  • Mateytwo Barreett
    Posted on March 19, 2011 at 8:48am

    The pain is coming from the knowledge that the US government has sold our butts down the river for 50 years. The band-aid avenues are all paved with pyrite, and the people sense it as never before! Listening to the news the Petrayus’ command is now questionred!! Which command? Not giving enough notice before attacking, not issuing Mirandas to prisoners, profiling? God, I could spit nails!!!!

    Report Post » Mateytwo Barreett  
  • PrfctlyFrank
    Posted on March 19, 2011 at 8:46am

    Conveniently, fuel and food prices are left out of the governments estimates of inflation.. And it’s ridiculous!! Professional paper printers are manipulating our system with impunity at this time because they know we‘ve got an administration that couldn’t find it’s ass with both hands, or is outright complicit in their schemes..
    We are being lied to and, ” mislead,” with outright disdain or even respect for our intelligence.. Although I must admit that if judgement were to be made after reading BROKER010, or WHITEAPARTY, or that lib marine idiots posts, a good case could be made for the idiocy of the public and if the administration really believes listening to those idiots is “having their finger on the pulse of America,” then so be it.. The trap is set with their own bait..

    Report Post » PrfctlyFrank  
    • Rothbardian_in_the_Cleve
      Posted on March 19, 2011 at 9:45am

      You are correct about food and fuel. One might argue, however, that those would eventually manifest in product prices later. So, if you were to be fair they would argue that counting those would be double counting. I don’t entirely agree…particularly on the food issue. At the very least there is a large lag in the metric for those. To me the more insidious statistical gyration is the large component of the calculation called “Owner Occupied Rent”. This essentially says if you own your home and had to rent it to yourself what would it cost? In layterms, a declining housing market has a major impact on the inflation calc but your mortgage payment doesn’t go down to reflect it. It’s silly.

      Report Post » Rothbardian_in_the_Cleve  
  • STIPPING@ICPCOMPANY.NET
    Posted on March 19, 2011 at 8:36am

    Thirty years ago I was alone with two children, 8 and 3. I earned $12,500 per year and in order to support myself and two children, I learned to live on it through living a small life. Every penny was accounted for and I spent some time each evening reviewing my expenditures daily. My children did not know how poor we were-we did not even have a television. Our furniture was from Goodwill. Live lesser than your means allow you. And now? Why, through very hard work and kind employers, I now still live a small life and save half of what I earn; that’s right, folks, half of what I earn is saved. I live on half of my salary today. That is the key. Live a small life with a big heart and with God’s blessings. My children are not dope addicts, criminals, or alcoholics. They are nice men. When a friend asks me “How did you do it?”. I reply, “I didn’t do it-God did while I was busy working and raising kids”. That is advice from an old lady who survived incredible odds. It can be done. Now go do it.

    Report Post »  
    • J.C. McGlynn
      Posted on March 19, 2011 at 2:06pm

      Do you think you can spare the time to teach Congress the same thing?

      Report Post » J.C. McGlynn  
  • Woody WoodBecker
    Posted on March 19, 2011 at 8:36am

    Inflation is really bad or at least the pain being felt is already bad and living in one of the few cap and trade states, I’ve seen my electric bill double to $500 a month. It’s insane.

    This gift is so far out of touch that more housecleaning needs to be done. Weak, liberal or so called moderate republicans need to be removed from power. The senate needs far more conservative new blood and democrats have to be defeated again in a big way.

    The president must, must be defeated in 2012 or it’s the end of the republic.

    Report Post »  
  • PastorJCM
    Posted on March 19, 2011 at 8:26am

    2.1% Who are they kidding? It must be just the real estate prices that they figure to ge that statistic. The price of gas, home heating oil, food, dairy, the essentials in life has gone up a lot more than 2.1% in the last 12 months.

    Report Post » PastorJCM  
  • HTuttle
    Posted on March 19, 2011 at 8:23am

    I don‘t even remember any problems in the early 80’s. Must have been only a segment of the population that it affected. I remember the entire 80′s as a flush period of easy money.

    Report Post »  
  • ComeAndTakeThis
    Posted on March 19, 2011 at 8:11am

    The economic situation is being driven by P-Bo via executive orders i.e. the gulf drilling shut down is a calculated effort to destroy the economy allowing the country to be reconstructed under a new communist economic model. The goal is equality of misery. Socialist progressives fascist and commies stand up and cheer utopia is just around the corner.

    Report Post » ComeAndTakeThis  
  • ilmom3
    Posted on March 19, 2011 at 8:05am

    This article does not address our current $14T debt and $80T unfunded liabilities and the gov’t printing money, which devalues the dollar and lowers the purchasing power for Americans. Nor does it address the fact that the gov’t kept inflation rising slowly by exporting it to China and rest of world at the cost to our manufacturing base through cheap imports and huge trade deficits, which artificially props up dollar.

    Also, Gov’t has since change how the Consumer Price Index is calculated (to artificially keep low — SS payouts are tide to CPI), so real inflation is much higher.

    Report Post »  
    • sleazyhippo
      Posted on March 19, 2011 at 8:17am

      You are right about Real Inflation — We are already paying higher prices — how about the inflation of fighting distant wars? It costs $1Million/Year to deploy One average soldier to Afghanistan. Gasoline shipped to the Afghanistan theater costs $400.00 per Gallon. Non combatant government military and civilians dressed in cargo aborts and sandals receive one full month of Combat pay for eating Friday Steak & Shrimp in the Green Zone without ever pulling a trigger.

      Report Post » MONICNE  
  • Tnredneck
    Posted on March 19, 2011 at 8:00am

    Snow leapord is still asleep!

    Report Post »  
  • sleazyhippo
    Posted on March 19, 2011 at 7:53am

    Under Carter we had 17-20% inflation. Now that the war on terror has been won, we should return to 1999 Federal budget levels within the next 5 years, and eliminate the new agencies and programs started since 15 January 2000. End the Iraq and Afghanistan support and eliminate overseas contracts with Halliburton and security firms. We would cut the annual Military Budget 50% and shut down the embassies in Afghanistan, Pakistan and Iraq. We would decrease Veterans Administration funding 60% and eliminate VA Hospital and facility construction.

    Report Post » MONICNE  
    • Colonial Revolutionary
      Posted on March 19, 2011 at 7:55am

      Wait for it…….Wait for it……..Wait for it….Wait for it…….Wait for it………………………..

      Snowlepords Post!!!!

      Report Post » Colonial Revolutionary  
    • sleazyhippo
      Posted on March 19, 2011 at 8:15am

      (isn’t it – “leopard” – ?? )

      Report Post » MONICNE  
    • Colonial Revolutionary
      Posted on March 19, 2011 at 8:33am

      @Hippo,

      You know who I mean, stop being a Spelling Nazi.

      Colonial Revolutionary  
    • sleazyhippo
      Posted on March 19, 2011 at 11:01am

      Did not mean to be a Nazi – I was just revolted by the irritation of seeing you misspell “leopard” about a dozen times just to taunt the poor little Chaplin of the Cat Folks.(who must be protected) I think you are a little thin-skinned! (smile)

      Report Post » MONICNE  
    • Repossessed
      Posted on March 19, 2011 at 1:03pm

      NAFTA- foreign countries are free to take every dollar as well as our country. While our government has a party with them to celebrate.

      Report Post »  
    • Colonial Revolutionary
      Posted on March 19, 2011 at 2:57pm

      Hippo

      Not being thin skinned, just get irrated when the only thing somebody can contribute is a spelling error. Who cares if you can get the point, why distract. Smile back. I was being sarcastic and you know it. Snow, did you sleep in today? No response about your obsession?

      Report Post » Colonial Revolutionary  
    • sleazyhippo
      Posted on March 19, 2011 at 5:47pm

      Well I‘m sorry I didn’t just contribute a Cut & Paste bait line, over and over, as some Blaze contributors like to do. (grin) – sorry If I wasted your attention capacity. (smile)

      Report Post » MONICNE  
  • Ironmaan
    Posted on March 19, 2011 at 7:41am

    Inflation is accellerating and it has a long way to go. It is all due to the devaluation of the dollar that is necessary to pay off the national debt. The dollar declined dramatically again this week which means we can expect inflation to worsen in the months ahead. The ONLY way you can protect your wealth is through commodities. Gold and silver surged this week as the dollar declined and will contine to rise. Get on board.
    http://guerillatics.com

    Report Post »  
    • Colonial Revolutionary
      Posted on March 19, 2011 at 7:50am

      Wait for it…….Wait for it……..Wait for it…………….Wait for it…….Wait for it………………………..

      Snowlepords Post!!!!

      Report Post » Colonial Revolutionary  
    • sleazyhippo
      Posted on March 19, 2011 at 8:00am

      “Now is the Time for Security!” If you enjoyed this informative post, just click on the red underlined text to access even more information and to access a convenient Gold Line advert.

      Report Post » MONICNE  
    • tobywil2
      Posted on March 19, 2011 at 8:46am

      INFLATION – STEALTH TAXATION:

      The tyrants (Wannabe Peers) would have you believe that taxes are only increased when the legislature increases taxes. These tyrants use the confusion over the relationship between wealth and the medium of exchange (money) to perpetuate this myth. Actually, the tax on the economy rises whenever the government s increases spending. Tax laws just determine how the liability is distributed. If the taxes fail to cover expenses, the value of the dollar decreases and anyone who owns money pays the tax in the form of loss of purchasing power. Money, (paper money) has no intrinsic value. The dollar’s value is determined by the quantity of wealth the market is willing to exchange for the dollar. The dollar’s value eventually will be determined by the nation’s wealth divided by the dollars and credit in circulation.

      Inflation is not a recent phenomenon. During the 19th Century the inflation rate in the United States was 12% for the entire Century. In 1800, $0.89 had the purchasing power of $1.00 in 1900, a change of about 12% in 100 years. From 1900 to 2007 the inflation rate was about 25 to 1, a change of 2500% in 107 years. A Google search lists over 20 pages of “inflation calculators” three of the most popular inflation calculators list the inflation rate of between 24.6 and27.71 from 1900 and 2007. In other words, $1.00 in 1900 was worth around $25.00 in 2007.

      What happened? In the late 1800’s and early 1900’s four factors emerged that caused inflation to increase. These are:
      • Creation of the “Fourth Branch of Government” the Bureaucracy
      • Enacting and enforcing the Sherman Antitrust Act.
      • Creation of the Federal Reserve
      • Enacting the income tax
      • Wars

      How did these factors cause such erosion in the value of the dollar? Chapter 9 of “21st Century Common Sense” explains in simple terms how these factors produced inflation of the dollar and aided the “Wannabe Peers” in usurping our freedom. The book “Money Mischief” by Milton Friedman provides a complete history of inflation, the causes and the consequences for those who require more proof. http://commonsense21c.com/

      Report Post » tobywil2  
    • sleazyhippo
      Posted on March 19, 2011 at 10:57am

      Please don‘t forget to click on our esteemed colleague’s connection, above, to be exposed to years of his dedicated work.

      Report Post » MONICNE  
  • Mike Whittington
    Posted on March 19, 2011 at 7:33am

    Just be prepared is all I can say. It is going to get bad.
    When the Saudi Gov stops handing out money, look out.
    http://www.ISeeDanger.com

    Report Post » ISeeDanger.com  
    • Colonial Revolutionary
      Posted on March 19, 2011 at 7:49am

      Wait for it…….Wait for it……..Wait for it……………………………….

      Snowlepords Post!!!!

      Report Post » Colonial Revolutionary  
    • Colonial Revolutionary
      Posted on March 19, 2011 at 7:54am

      I actually want inflation to hit so I can pay my house off. That’s assuming I get a pay raise to go along with inflation. The banks holding mortgages will be the losers.

      Report Post » Colonial Revolutionary  
    • bluegoldnationdotcom
      Posted on March 19, 2011 at 7:54am

      I thought the last paragraph was for sure going to tell me to buy gold.

      Report Post » bluegoldnationdotcom  
    • MiketheTrucker
      Posted on March 19, 2011 at 9:20am

      This situation is not new. Since the 70′s wages have no where near kept up with inflation. At one point(I believe it was the twenty yr period between ‘74-’94) inflation had increased 751% while wages increased only 324%.

      A couple of “reasons” for this:

      1) Devaluation of the dollar(which is what inflation actually is) businesses increase prices to offset the devaluation/// Wealthy investors/speculators drive up commodity prices to “earn” back their “lost” wealth from devaluation – - WE pay the price in higher goods

      2) businesses do not increase wages so they can “remain competitive”.

      Report Post »  
    • Thats A rap
      Posted on March 19, 2011 at 9:24am

      We are now entering a re-founding revolution. Our choice of weapon is the freedom of us speakin. We choose to fight in the arena OF THOUGHT and our founders had superior. But now in OUR house they all snub the constitution. Did they swear to us to GOD or some sort of alien. If to GOD what a shame but one day they‘ll meet with him and if to us then there LIARS and it’s time for us to replace all them. OUR CONSTITUTION our BILL OF RIGHTS and no interpretation that‘s how we’ll finish this re-founding revolution. So now it’s time for the 28th amendment “No authority can tax a SOVERIGN STATE CITIZEN” It’s also time for OUR state representatives to come back home and start representing them. After that we’ll be headed towards a different place, a place OUR founders intended for the human race. So much HOPE so much CHANGE and new innovation. WE pray to GOD for this re-founding revolution. Hey U.N. we’re sorry for all the confusion, but those treaties that we signed are against OUR CONSTITUION. So what were saying is that it’s time for us to hit the road and that building in New York will be sub-divided into condos… So much HOPE so much CHANGE and new innovation WE pray to GOD for this re-founding REVOLUTION. Rise Up People!!!!!!

      Report Post »  
    • Cemoto78
      Posted on March 19, 2011 at 10:03am

      I believe the economy has purposely been driven this way to keep the “baby boomers” from retiring and leaving the job market. Once they find out the so-called pensions they had been promised and paying into are really not there because of shady unions and government interventions of stealing or misappropriating their money and using it for social engineering programs, they will have no choice but to remain working and paying into the ponzi social security system. Stand by for the food lines, poverty, lawlessness, riots, and third world status for the United States. We are about to turn into a country of haves and have nots.

      Report Post » Cemoto78  
    • Xcori8r
      Posted on March 19, 2011 at 10:05am

      The magnitude and velocity of handouts by both the Saudi’s and the Fed are good proximity indications of the coming return to equilibrium from the economic and monetary illusions that exist today.

      It, by necessity drives the magnitude and velocity of the fiat currency at ground level.

      Buy what you must have today at what will soon seem to be fire sale prices.

      Store your wealth in durable form.

      Do your homework. Be prepared.

      Report Post » Xcori8r  
    • sleazyhippo
      Posted on March 19, 2011 at 10:30am

      Throughout this post, you will be often treated and occasionally exposed to marginally related connections to products and services that do not reimburse the Blaze. Please support these entrepreneurs who use the Blaze to avoid Overhead Costs just as you would the friendly independent Business persons who drive down their costs by conducting business in the local Starbucks, to the utter fascination of the general public.

      Report Post » MONICNE  
    • Oil_Robb
      Posted on March 19, 2011 at 10:40am

      go on youtube and search………..Dr. Manning
      By far the smartest Black man Ive ever run across

      Report Post »  
    • Xcori8r
      Posted on March 19, 2011 at 12:21pm

      Oil_Robb
      Posted on March 19, 2011 at 10:40am
      go on youtube and search………..Dr. Manning
      By far the smartest Black man Ive ever run across
      ——————————–
      Ummm…. I trust no slight was intended but that doesn’t come across very well.

      Report Post » Xcori8r  
    • Ruler4You
      Posted on March 20, 2011 at 3:37pm

      The government has been lying with considerable intent about inflation, duh! But wages are now falling, also. Not for Wall Street bankers, but for the average American. Not for government employees, but for citizens in the private sector. Not for government subsidized corporations and unions, but for every one else. Not for financial sector CEO’, CFO’ and other corporate officers, but for you and me.

      I was discharged from the Navy after 9 years in 1981. My wages today are the same as they were in 1985. Sure they have gone up. But the point is that NOW they are going down. Of course inflation hurts more. Every thing costs more and the real cost of inflation is intentionally being hidden because it is a virtual tax by government, stealing your money behind your back. It’s criminal, or should be.

      Report Post » Ruler4You  
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