Quote:
Originally Posted by Seaver
There has been very little inflation since 1990.... you're not paying close to double for the "same" car and you know it. The car you're paying "double" for has "double" the features which make it more expensive.
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If you calculate it, $20,000 paid for a car in 1990 would cost just over $33,400 today. The inflation rate from 1990 to 2010 is just over 67%, or an average of 3.35% annually. I mentioned above that a rate of 2% would keep people happy, but even as high as 4% would be desirable so long as the global rate moves at around 2 or 3%.
So, yes, the car is more expensive now than in 1990, but moderate inflation is desirable to keep unemployment in check. What we don't want is hyperinflation or deflation, as both situations are unstable.
Be happy with 3.35%. If it goes above 4%, then maybe start to worry. But between 2008 and 2009, inflation has been really low because of deflation. Basically, we should be hoping for a bit if inflation at this point.