"[T]he concept of the general price level is extremely vague and we cannot even speak of a very approximate determination of the average price level. Every index number is to a certain extent arbitrary: the selection of the commodities that are to be included, the choice of the weighting, the base from which the index starts, and, lastly, the mathematical processes applied, are all arbitrary..."
-Wilhelm Röpke, Crises and Cycles, 1936
As everyone not beholden to the current corrupt structure knows, prices are rising at an unseemly pace. Röpke had it right. The corrupt structure abuses the trust it is accorded by claiming "inflation is too low," then publishing inflation figures not worth the paper they are printed on.
Although everyone knows prices are rising fast, there has not been, in general, a rush to get rid of dollars, as there was in the 1970s. The rush was to buy before prices went up. We are approaching a moment or period of recognition, all the more predictable since incomes are flat to falling. Incomes rose through the 1970s.
The backlash will open with revulsion towards government scrip (dollars) and a rush to stuff will follow, particularly into gold and silver.
Without the slightest attempt to cover the waterfront, a portrait follows.
Flipping through a "What to Do" pamphlet when staying in New York, the price for assaulting the Empire State Building, $25, struck an ill-tuned cymbal.
An armchair investigation turned up the following:
Top of Empire State Building:
2001:
Adults - $9
Children - $4
2013
Adults - to 86th floor - $25
Adults - to 102nd floor - $42
"Express Pass to Top" (whatever that means) - $47.50
Children to 86th floor - $19
MOMA - Museum of Modern Art -
2001 -
Adult - $10
Child - free under 15
2013 -
Adult - $25
Children - under 16 for free
Cloisters - Metropolitan Museum of Art, at 190th street in Manhattan:
2001 - adults - $10 "suggested"
2013 - adults - $25 "suggested"
Cab from JFK to Manhattan:
2001 -
Standard rate - $30, plus, pay for tunnels, bridges, which certainly cost more than in 2001. Tip - for the consistent 15% tipper, was lower on the 2001 fare than on the 2013 fare.
2013 -
Standard rate - $52, plus etc.
New York City taxi -basic charge (leaving out: "after 8 PM", bridges, tips)
1 mile -
1987 - $2.20 ($1.15 first 1/8th mile, 15 cents, each add'l. 1/8th
2004 - $3.20 ($2.00 first 1/5th mile, 30 cents for each add'l. 1//5th mile)
2013 - $4.50 ($2.50 first 1/5th mile, 50 cents, for each addl. 1/5th mile)
Source for 2001 prices = Frommer's New York City with Kids
Over the post-millennial period, what served as the better conduit to save or invest for the weekend getaway to New York? The S&P 500 peaked at around 1550 in March 2000 and is about 1660 today. Since 2001, gold (from around $300 to $1200) and silver (from about $4.50 to $19.00) did a better job of paying the bills.
Frederick Sheehan writes a blog at www.aucontrarian.com
