Apr 24 2009
Seven Months of Deflation
Once oil had gone up like a rocket, and then began its fall to the earth, it was interesting to see how the prices of other goods were affected. Here is a list of these prices so that you can get a sense of how and what has been affected by deflation:
1. Clothes: How can retail compete with a sudden rush to used stories? They can’t. So prices have been slashed and company profits are slow.
2. Legal advice: Some lawyers cut their prices to be more affordable to the common person. Most have not, but there are a few.
3. Furnace filters: The prices stabilized.
4. Cars: Prices on new cars have dropped. Used cars are expensive, however, because of the high demand for them.
5. Used tools: There is a huge number of tools on the market as more and more people pawn items to make ends meet during this economic downturn. Price of used tiller last year: $80. Price of used tiller this year: $50.00.
6. Cereal: Name brands: stable price. Generics: Price decrease. One change: discount stores are sold out of cereal more often.
7. Highly sought after artwork: price change unknown. Artwork that is famous still commands a sizable amount, but who knows how much more if times were good in this nation.
Since oil is slowly heading back upward, it should say that so will inflation. High unemployment numbers may help keep prices low for a while yet. But sooner or later, inflation will take a bigger and bigger bite out of our savings.
Deflation has certainly caused a concern. Most of the luxury items including electronic goods have slashed their prices due to declining demand.