Monday, January 23, 2006

Prices and inflation

The Labor Department reported that consumer inflation increased to a five year high of 3.4 percent for 2005. Interest rates jumped a little on the news. The yearly inflation rate of 3.4 is very reasonable from a historical standard but I question its accuracy.
I know of few things that have only increased 3.4 percent this year, so where does the government find them? I wish the government would publish a list showing products and services that have only increased their pricing by 3.4 percent.
Take insurance for instance. I pay for health, auto, homeowners, life and professional liability insurance. All my insurance policies have increased by 10 percent or more. Each year I drive about 35,000 miles and each year I buy a set of new tires and get a new set of breaks for my well traveled Honda Accord. This year the cost of both has increased 12 percent. All transportation costs have increased over 3.4 percent. Did the 3.4 percent include the cost of gas?
My dentist wants $600 for a new crown. His price was $400 for the last one I had installed. Have you ordered lunch recently? Remember that $5.00 soup/sandwich special? Now it’s priced at $8.00 and that doesn’t include the $1.50 for coffee or ice tea. The only place to find a reasonably priced lunch is the dollar menu at Mc Donald’s.
We don’t go to movies very often. Vicki likes chick-flicks and I like action-hero or political intrigue. Part of the reason we don’t is time and distance. The nearest theater is 30 minutes away from our place and we both work more than full time. Another reason is that Hollywood isn’t producing too many enjoyable feel good productions. I don’t like feeling embarrassed or humiliated when seeing a move. I like a movie to have a good story-line, the good guys to win and everyone to live happily ever after. There is not many of those movies anymore. Neither are their any $5.00 matinees. If fewer people are going to the theater wouldn’t you think the ticket price would come down?
The cost to sleep someplace is higher than last year. Vicki and I plan on taking a weekend trip and need a hotel for two nights. In addition to the room rate which has increased $15 bucks from last year the hotel now charges an energy tax of $3 and a room cleaning charge of $5. Don’t they know that inflation is only 3.4 percent?
Whoever is responsible for determining the yearly inflation factor doesn’t buy groceries. We used to enjoy a nice steak once a week. Now, steak is for company or other special occasions. Did you ever think you would pay nearly a buck a pound of apples or oranges?
Contractors and builders tell me that the cost to build a house has increased 15 percent just this year. County building permits are responsible for much of the increase but so is the high demand for lumber. The average home was 18 percent more expensive in 2005 than in 2004.
There may be a few products and services that have only increased by the official 3.4 average but I don’t think I use any. If anyone has I would appreciate you forwarding me a list.


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