by Iamallcool 25 Replies latest jw friends
-A six-pack of beer cost $1.49 (1978)
-One movie ticket cost $1 (Chicago, 1978)
-One pound of coffee cost $1.40-$1 in 1975 = $3.98 today
Interesting....a six pack of beer cost $ 1.49 in 1978 and the average American worker was making about $6.50 per hour. Today the average American makes about $24.00 per hour and a sixpac is aproximately $6.00. which means (if my math is correct) a sixpack of beer costs about .54 cents more now than it did in 1978.
XYZ,
Astute observation. The cost of food is one area in which the US has excelled (maybe too much since obesity has become such a problem). However, there are other areas of the economy where the same can't be said. We all live a lot better than we did 50 years ago as well, so direct apples to apples comparisons are at times difficult. For example, houses are much bigger and nicer, and they cost a lot more - and in many places they have moved beyond affordabilty for most consumers. Cars are much safer, more luxurious and last a lot longer. Electronics and many other consumer goods, because of Moore's law and supply chain/manufacuturing improvements, are much cheaper.
Still, I wouldn't go back to any other time. These are the good old days. Unless of course, Met is right and we are all in the soup line soon.
that already happened in 2008
I still have a pay stub from my ex (1971) 40 hours bring home pay from Fords $148.00.......milk was 89 cents a gallon. Rent for brand new 1 bedroom apartment was $190.00.
On a side note I still have a pay check ( never cashed) from my waitress job in the late 70's for one penny...lol It was a good week for tips so paid a lot of taxes. Most of my checks were for about $20.00. Loved to show my one cent pay check for 38 hours...ha ha ha
DJS, I read Seeking Alpha for investment opinion. Given your broad strokes here, you could likely benefit from the attention to detail there.
There are no easy answers because there are too many variables and wild cards to consider. I didn't feel this way prior to 2008 when clear investment paths existed. That said:
First, invest in yourself in practical ways. Many people who learn trades or 2 year-ish stuff in Community College education will do OK. There's always a need for Nurses and that might actually increase if technology pushes some Doctors out of business. Example - an injection of stem cells instead of joint surgery.
Second, hold some gold/silver. No, I'm not a gold bug, nor do I think hyperinflation is coming. Just painful inflation with gasoline, meat, etc. You never know.
Own a house? Think about solar and if you have a well, install a hand pump. If the electric fails, how long can you go without water? Get a chest freezer, put it outside (saves electricity in winter) and buy unadvertised specials, especially at BJ's/Costco/Sam's.
Stocks? Very tentative but I suggest dividend stocks in tobacco and liquor. Also, closed end funds in emerging market debt.
Don't put much faith in the US "recovery". Walmart's annual report said much of their revenue now derives from food stamps and other welfare programs. If increased debt and financial speculation was removed from GDP calculations, things would look ugly.
but if you're in the dwindling middle class, I'm really not giving you a revelation here.
metatron
I remember the day an American tourist was protesting the exchange rate on a purchase at a Wal-Mart here in Alberta. The bill was about 25% more than she expected! Yes, that was for the short time the Canadian dollar beat out the American. The look of befuddlement on her face, priceless. These sort of exchange rates are no stranger to Canadian tourists though.
Consider if the American dollar did drop, American-made goods will suddenly be much more attractive. In an odd way it could boost some industries.
I don't know about everyone else here, but as a witness I got a pure belly full of predictions of gloom and doom. I don't want to hear about any armageddon, whether it is biblical, fincancial, the climate, disease, pollution or otherwise.
Whatever will happen will happen but worrying about it won't change it. I think John Mellencamp put it best in this song when he spoke about the "prophets of doom that won't leave us alone". To me that goes for the society and 99% of the news channels who all live by the motto "if it bleeds it leads". Is the economy in trouble? Maybe, but is there misinformation out there being manipulated by those that want you to invest in their stock/gold/supplies etc. Absolutely. The best thing each of us can do is be responsible with our own money. Stay out of debt and ignore the prophets off doom, and don't spend all our days sowing seeds of despair.
Another Sunny Day 12/25 - John Mellencamp
We see it on TV, we get calls on the phone
By the prophets of doom, they won't leave us alone.
The planet is dying and there's no time to spare.
They spend all our days sowing seeds of despair.
We get enough bad news to harden our hearts.
This fear that we feed on is what's keeping us apart.
To say that we're doomed is just an obvious remark.
And it don't make you right, it just keeps you in the dark.
I don't want to live angry, I don't want to live scared.
I don't need no more prophets crying "brother beware."
Just put some work in my hands and give me a dollar to spare.
And don't let me sow those seeds of despair.
Well, this earth is a graveyard, it will swallow our bones.
It was here long before us, It will be here when we're gone.
And it's a vain generation that looks for a sign.
Don't you think we could make better use of our time.
Yeah, the air could be cleaner and the water could too.
But what we do to each other are the worst things that we do.
And we can treasure our freedom behind our locked doors.
But God speed the day when we're lonely no more.
I don't want to live angry, I don't want to live scared.
I don't need no more prophets crying "brother beware."
Just put some work in my hands and give me a dollar to spare.
And don't let me sow those seeds of despair.
This year, longtime bear and well-known economic forecaster, Gary Shilling, recently made a splash in the financial community by turning positive on the U.S. economy and dollar. Given the lingering amount of pessimism by many investors after two major stock market crashes and the fear of another repeat event, there’s at least one thing that Shilling makes clear that investors SHOULDN’T be worried about happening anytime soon: a collapse of the U.S. dollar.
Given that a currency reflects the strength of the nation that issues it, it's important to consider the following six reasons why Gary believes the U.S. dollar will maintain its strength as the global reserve currency for many years to come. The following are taken from his exhaustive study of dominant world currencies going back to ancient Rome along with comments made in his recent interview with Financial Sense.
Among developed nations the U.S. has had the strongest productivity over the last decade. For example, the U.S. averaged 2.2%, Japan 1.6%, U.K. 1.2%, Germany 0.9%, Canada 0.9%, France 0.8%, and Italy flat. When you consider the deflationary trends now at work in emerging markets and other developed nations, Gary believes that U.S. productivity will continue to outperform and help keep the dollar strong.
The dominant currency is typically found in the world’s largest economy and the U.S. is head-and-shoulders above the rest. As Gary points out, in 2012 U.S. GDP was $15.7 trillion. The second closest, China, was nearly half the size at $8.2 trillion. If you think China is about to overtake the U.S. in terms of size, Gary says “China would have to grow 12% a year for 20 years to catch up…it’s now down at about 7.5% growth and as the Chinese economy shifts away from being driven by exports…away from infrastructure, away from heavy borrowing, and so on, their growth is going to grow even more slowly.”
Here, Gary writes, “Internationally, money—especially today when it can be transferred anywhere in a split second—wants to be where the action is. That requires not only a powerful and large economy but also deep and broad markets in which to invest. Today, the U.S. Treasury market trumps all others in size and, in the eyes of investors…, in safety as witnessed by the mad rush into Treasury bonds in times of recent global trouble."
Similarly, he states, “American stock market capitalization is four times that of China, Japan or the U.K. and is over three times the Eurozone's…Almost 50% of Treasuries are held by foreigners but only 9.1% of Japan's government net debt is owned by non-Japanese. According to the IMF, 62% of the world's currency reserves are in dollars. The 24% in euros is down from 29% four years ago. Foreigners so love investing in the U.S. that at the end of 2012, it exceeded U.S. investment abroad by $4.4 trillion, up from $4 trillion a year earlier.”
“Investors want to go where it’s free and open; they don’t like China. China periodically freezes their currency. They did that for example during the Great Recession. They had let it float up but then they froze it when they got worried. They’re now letting it float a bit, but they turn it on, they turn it off. Other currencies are much less free to people moving out. They typically manipulate currencies in a lot of places. The Swiss, for example…froze their currency 1.2 to the Euro when everybody wanted to be in the Swiss Franc because they worried that a strong currency would kill their exports to the Eurozone, which is their major trading partner.”
“Things can change over time but one statistic that I think is very important is global forex trading. Now, there’s two sides to this so the numbers add up to 200%, not 100%, because for every sale there’s a buy. But if you look at the trading, in 2001, the U.S. dollar accounted for 90% of all the daily trading in currencies. In 2013, it’s down from 90% to 87%. But if you think of all that’s happened in that time, the euro currency had come in, China has gotten stronger, etc. But it still has only declined 3 percentage points and it’s way ahead of anything else. The second one today is the euro at 33% versus [the USD at] 87%, the yen 23%, sterling 12%—in other words, this is the currency that people transact.”
“The sixth characteristic is credibility. And that’s the only one where you can say there’s been any questioning of the dollar. And it is true that last year that Standard & Poor’s did downgrade the U.S. from triple AAA to AA+, but that hasn’t really hurt. You might remember that when they did that, Treasuries actually rallied…and it has not changed the willingness of foreigners to put money into dollar denominated assets. So, the credibility issue is the only one that is not absolutely triple-A, but it hasn’t had any decided effects so far.”
Yes, please sell your computer now and invest in beans.
thank u xyz for indexing 1975 income to current income for a comparison of actual value.
yes disposable income is less now than in the past, and yes this generation is less well off than its parents, but when u ncompare apples to apples income vs expenses is all relative
talking about 25 cents a gallon gas when ppl grossed $5,000 annual means nothing if u dont consider the dollar values
