patrick.net

There people goes with that adjusting for inflation Shit again. I prefere to read tea leaves and drop chicken bones on the ground.

Hey I lived in the 80's, the Economic forces, the Building industry, Job Market and the Real Estate market, was so uniquely the 80's as this is 2010. In that we were as then as now unappreciated uncharted economic territory.

If a home was Valued at 80K in 1980, and it's 160K now, then the damn thing doubled from then to now. End of story, there is no adjusting for inflation. Those living in the 80's working for the 80's wages are in no way shape or form bound to our Prices and Wages, as we are to then. Inflation has adjusted in real time as it has happens through out History. If People in later years, are going to recalculate inflation that has already been bought and paid for with 25 years of paychecks and bill payments, to make their point. Are just Cooking the books to sell Goat Shit.

Wages and worth from now and then represent to different things. In the 80's Household wealth was based on liquid assets, not debt and Credit limits. What was cheap and what was expensive has also flip flopped and turned on its head. Consumer goods have never been cheaper, while food and energy(due to natural and manipulated market forces) have never been higher. Also the Deregulation that have been lifted from companies that both suck the middle class wealth in this country dry and gouges on inflated prices, is also two different economic parameters between now and then.

"Home prices are DOWN 50% from 1962 if you put on a Fedora, light a Cigarette and hold your mouth just right..."

Inflation adjustment sounds just as ridiculous.

I guess my point is you can't adjust for inflation, to compare historical indexes, when the accounting rules or economic forces don't stay constant and change constantly, especially when you keep revising last quarters numbers.

It's already factored in, that's why a house cost 167K now. Inflation has already adjusted.

Tenouncetrout says

I guess my point is you can’t adjust for inflation, to compare historical indexes, when the accounting rules or economic forces don’t stay constant and change constantly, especially when you keep revising last quarters numbers.

You're right that we don't really know what inflation is, and it hits different groups differently. And they periodically change how it's calculated (apparently sometimes to make inflation appear lower than it is).

Still the point can be made, and it's a worthwhile analysis to attempt, as long as the fuzziness is understood.

If inflation were measure by how much middle to lower middle incomes have gone up, then surely Real Estate is still much more than 3.4% above wage inflation. But factor in things like energy, health care and college, and it's probably not even 3.4%. Probably negative, relative to income and expense.

Not really, in 1980 2K was a serious chunk of change. While not impossible to save up, in a years time, even at minimum wage. Now there are so many forces at work to make sure you don't accumulate 2K, no matter what you make, or the time frame.
And in reality, that 2K wont even make the monthly nut for most people regardless what you make.

Sounds fuzzy enough?

I'm talking about 2K in accessible cash, that wont impose a big fee and processing charges and then taxed over 30% of it.
Sure you stuff it into a 401K easier, but you don't have access to it. And the Majority of Americans only save in the 401K because companies match their contributions. If left to their own means, people would have even less. Because they would just spend that money they didn't contribute to 401Ks or use it to pay Debt bills.

It's a different time.

Tenouncetrout says

Sounds fuzzy enough?

Beyond fuzzy, but then that's your specialty.

The biggest difference is that I was a young man then, and I'm getting pretty old now, which changes my perception more than the differences you refer to.