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Old 08-08-2009, 11:14 AM
 
Location: Cleveland, OH
753 posts, read 2,310,076 times
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People have a hard time keeping their incomes in line with the cost of inflation. Why do prices go up? Why can't everything always stay the same price - or go down - so that no one ever needs a raise at work? And I'm being serious. It makes no sense.
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Old 08-08-2009, 08:21 PM
 
Location: In America's Heartland
929 posts, read 1,948,175 times
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Not all prices rise. When Sony came out with one of the first VCR's in the mid 70s it retailed for around $1,300.00. I purchased a new VCR for $500.00 in 1984. and the prices kept tumbling. We have witnessed periods of deflation when prices tumble and money increases in value. Japan went through a period of deflation in the 1990s. One thing is for certain when it comes to the economy... Nothing stays the same.
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Old 08-09-2009, 12:29 AM
 
Location: Heartland Florida
9,324 posts, read 24,688,909 times
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Prices go up because the money supply increases to benefit the well-connected. The only time prices can fall is when technology outpaces the insidious inflation created by crooks like the Federal Reserve to support ever-increasing government which strangles the economy and halts technological progress. If the money supply was constant, people would need to work less and less to have the same standard of living. Deflation is a myth used to justify the constant devaluing of the money you save to support the rich and unproductive. Without inflation we could all become rich if energy was abundant and technology flows freely.

The only way prices came down on technology was by using fewer raw materials. Compare the amount of metal in a 1979 VCR to one made in 1999. Technology does more with less. Financiers do more for themselves and we end up with less.
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Old 08-09-2009, 02:14 AM
 
3,853 posts, read 12,033,340 times
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Theres three main reasons:

1. Inflation - the value of the dollar is declining due to overprinting of the currency (this is why the OVERALL prices tend to rise, for example in 1950s everything was cheaper than it is today).

2. Decrease in production, shortage, or other such event. The price rises as a result of simple supply-demand economics. As the supply declines the price increases. For example, the price of strawberries will increase if the farmers had an abnormally low harvest.

3. Manipulation. Big government handouts and government trying to master plan the market. In the 1973 oil crisis, government price controls lead to gas shortages (also, the oil embargo caused price disruptions). In 1980 the hunt brothers attempted to corner the silver market causing silver prices to go from 6$/oz to 48$/oz
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Old 08-09-2009, 02:23 AM
 
Location: Conejo Valley, CA
12,470 posts, read 18,186,791 times
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Long term prices only go up because the supply of money increases more than the economy. There is no other reason.
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Old 08-09-2009, 02:24 AM
 
Location: Texas
44,264 posts, read 56,732,927 times
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Because they can.
Simple fact.
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Old 08-09-2009, 02:25 AM
 
3,853 posts, read 12,033,340 times
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Quote:
Originally Posted by user_id View Post
Long term prices only go up because the supply of money increases more than the economy. There is no other reason.
Pretty much. The other reasons are rather insignificant.
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Old 08-10-2009, 10:45 AM
 
Location: Ocean Shores, WA
5,080 posts, read 13,591,616 times
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The two main factors responsible for price increases are Greed and Stupidity.
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Old 08-10-2009, 03:00 PM
 
392 posts, read 1,457,533 times
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Prices going down is a problem too. If prices go down, businesses make less, so they hire less and grow less, which means less people have money to buy things. Prices going up is ok... so long as it is at a reasonable rate of inflation and incomes keep up. The prices going up now are mostly because of fuel costs. Everything you buy is shipped (via plane, truck, rail, etc). As fuel prices rise, transportation costs go up, and products have to increase in price to still be profitable.
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Old 08-10-2009, 04:26 PM
 
Location: Columbia, SC
1,860 posts, read 4,598,901 times
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One thing that I've always wondered why it is never mentioned regarding inflation/job growth, etc. is the fact that while prices have indeed increased, and inflation has averaged around a 4% increase/year over the past century, is population growth. In 1950, the world was estimated to be around 2.5 billion people, today we're approaching 6.8 billion (side note: how do we really know exactly how many people are on the earth? always wondered what the margin for error is on that calculation); about 4 1/4 billion more people using resources, needing jobs, food, water, etc., but it's rarely mentioned; and wouldn't we almost have to in essence 'print' at least some amount of money just to keep pace w/the job growth? I realize technology helps aid us in this process, but interested in what others think about that.
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