Bob Brinker: Market Savant & Radio Host Message Board

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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: J-L-S who wrote (22175)	7/3/2006 11:28:50 PM
From: Yogizuna	of 42834

For instance: if a $2,000 computer of today is compared to a $2,000 computer of five years ago, the cost basis of the new computer will be reduced as part of the inflation calculation in order to account for the higher speed, larger memory, bigger screen, improved (bundled) software, greater energy efficiency, etc. Another good example would be to compare today's Volkswagen with the first Beetle of the 60s. It would be unfair to simply compare cost and not take into account that the first Volkswagen was not much more than a pregnant roller skate compared to today's version. That is completely ridiculous. Any product is "state of the art" in a snapshot of a certain time period, and it is completely natural for most products to get better with the passage of time, so this should have nothing to do with calculating inflation... Hey, that 1965 Beetle was many times better than traveling in a horse drawn coach, so I guess inflation from the 1880's to the 1960's will have to be adjusted now... That is how ridiculous this "adjustment in inflation because of improvements" argument can become.

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