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SvennoJ on 28 July 2014
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Baalzamon said:
SvennoJ said:

That makes more sense. I remember buying cheap supermarket bread for the equivalent of CAD 0.56 (1990). Nowadays the cheap bread is CAD 1.88
Not far off from this site http://www.thepeoplehistory.com/70yearsofpricechange.html

Luxury goods have become a lot cheaper compared to daily necessities. Back then having a 2nd tv was a rarity. Nowadays people have 2-3 cars, tv in every room, multiple consoles, pc, laptops, tablets, smart phones.

You do realize that $640 price now is more in line with 7% annual inflation since 1996 accross the board. Just because certain items cost that much more than 1996 does not mean they all do, or we would be looking at bananas for $1.50/lb (when they are still $.50/lb), milk for nearly $5/gallon (when I get it for about $2.50/gallon), a car equivalent to a Subaru Legacy Wagon would be about $50,000 (I just bought a really nice brand new Chevy Cruze for $16,000, even a much larger car would have only run me about $20,000).

Sure, I can look at individual items I have bought, and I will certainly be able to find ones that have gone up 3, 4, even 5x what the price was when I was a child, but I can also find items that literally haven't changed a single bit since I was a child, or have gotten cheaper.

You also need to consider when looking at inflation other factors. For example, the huge rise in housing prices has a lot more to do with much larger houses than it has to do with super high inflation on housing. With vehicles, the vehicles we buy today are much better than the ones we bought in 1996 (significantly more features, much safer, better gas mileage, etc.). Computers have consistently gotten cheaper, yet continue to get better and better.

If 7% inflation was a reality, then just about everybody would be massively worse off now than in 1996, when I would argue houses have significantly more flexible spending (adjusted for inflation) now than they had in 1996.

In my anectdotal example it would be closer to 5% anual inflation from 1990 to 2014. So I would get closer to a $500 console from $200 in 1996. Looks right on the money actually!

Average inflation is useless for these things anyway. From that site I linked the price of meat went up five fold since 1990.
Compared to groceries, consoles are cheaper nowdays. Compared to other luxury items they are more expensive.

Different times, I used to get 5.5 % on a savings account, and I remember mortages being as high as 14%, now I'm happy when I get 1.2% and mortagages are as low as 3%.

Without inflation, In 2000 I paid 44.43 euros (99.95 guilders) for a PC game, today they are 49.99. Too lazy to find older ones :)