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2 posts tagged Inflation
Inflation is a funny thing. Easy to define but hard to get your head around. Everyone knows that inflation makes goods and services more expensive and money worth less. The opposite is true for deflation.
But everything doesn’t appreciate. Inflation is measured in general terms based on a basket of goods and services that the average urbanite consumes using the Consumer Price Index. Any deviation from this average could result in either a higher or a lower exposure to inflation. Even deflation.
But there is no way to beat inflation sans change. To manage our personal exposure to inflation we need to rethink our consumption habits, away from the average.
My hypothesis is that the average has been inflated by general over-consumption, overspending on housing and apparel, and choice of food that drives higher medical bills. Decades of cheap oil has also established average consumption behaviors way above what they really need to be. Especially factoring in our suffering environment.
Aspirational goods is another area where prices has gone wild over the past 10 years. They are more commonly referred to as luxury goods; justifying their existence as rewards for hard work and a game well played. Most of these goods are commodities made scarce, like $40 jeans being sold for $200, handbags for specific occasions et cetera.
What we really need is a personal inflation calculator that measures your individual inflation or deflation based on your spending habits. It should be a nice mobile application that gave recommendations on how to stay delta neutral. When oil prices starts to rise you take the bike or public transportation to work et cetera.
