This reminds me of a quote which may be conductive to this conversation. It is close to this (or is this):
“The true cost of a thing is how much life was spent in trying to achieve it”
It depends. Advances in productivity will lower the costs of goods and services, but increased demand (due to global economic growth) and resource shortages will raise the costs of goods and services.
So I don’t know for sure. Gasoline was less than $1 a gallon for a period in the 90s, but now $3 a gallon is considered cheap in the US. Demand has gone up.
Plus as people get wealthier their lifestyle goes up. The lifestyle people have in 50 years will have more than what we do.
If you want to live the same lifestyle you are leading now, it will be cheaper by and large.
So all in all,if I had for instance…5 million euros now (which would be enough to live 4,5 lives without worries in most euro countries if the costs would remain the same),what is left of them in about 30,40 years would be worthless? Lets say that the inflation rate is 2%,so 2% for 30 years is 60% and that means that I would need 300 m euros to have the same amount,as 5 m euros in today’s world? I personally have an idea for a business that could make a lot of money,but it will probably not work in 10,15 years due to technical advances and also you have a lot of sportists that retire early,that are living a relatively nice life now,so if they aren’t employed anymore,does that mean that they will be really poor in the future?
People invest money, it just doesn’t sit in a shoebox. Interest from accounts, bonds, and gains from investments help to counteract inflation. People also have income from other sources, such as social security, pensions, capital gains from property, rental income, etc.
Your questions are all over the place - try to focus on a single topic and explore that a little more. Also, punctuation and line breaks are your friends.
I realize that,but still if a interest rate is lets say 2.14 and the inflation rate is 3.50,then you are screwed,aren’t you? (in case you don’t have any other source of income other than the interest rate)
Here’s the report: Food Expenditure Series | Economic Research Service
Here’s how “disposable personal money income” is defined: “Disposable personal money income = disposable personal income minus food produced and consumed on farms, government transfer payments to persons (including food stamps and medical care), and supplements to wages and salaries (including employers’ contributions for social security, medicare and medical insurance, retirement, and meals furnished to employees).”
In other words, it’s income less transfer payments. If I made $15k and had govt assistance of 3k, my “DPMI” would be $15k.
Here is a copy of the chart the data was based on (Excel): http://www.ers.usda.gov/datafiles/Food_Expenditures/Food_Expenditures/table7.xls
Ignoring the truly unpredictable things like WWIII, the key factor is going to be which direction energy costs go.
50 years is far enough ahead that cheap oil/gas might be just a memory. That would really hurt the economy if no reasonable substitutes are widely implemented. (I am fairly optimistic about wind and such contributing a fairly large share of energy.)
But if there’s a big breakthrough in nuclear power or something, then things might happen that would really boost the economy. (Although 50 years is a bit short for a major rollout of something completely new.)
Fine. It’s still misleading unless you have strong grasp of multiple economic trends. To start with, what’s the relationship of “disposable income” between Depression-era farm families and present-day sub/urban familes? In real dollars? Yeah? Who says so?
If you’re going to chart “percentage of food costs” against such slippery benchmarks, you can show nearly any trend you want to - and, unfortunately, economics studies often do. This econ prof’s blog is one directed opinion based on such hand-picked indicators, nothing more.
Not really. The gas station came about in 1905 and it didn’t take 50 years for them to spread throughout the country.
The petroleum industry had existed for decades, delivering other fractions in units from tank cars to half-gallons. If we’re going to postulate something completely new, it will have the same acceptance and implementation curve as any other technology - if it’s based on something existing or can be sold through the same channels, it will happen more quickly; if it’s really new, it could take a decade just to lay the groundwork for any widespread infrastructure.
(ETA: It occurs to me that I have no idea what gasoline was used for prior to the era of the IC engine. Too volatile for most uses other than contained combustion of some kind.)
I assume you’re speaking in terms of percentage of income, not hours of labor or dollars.
Clearly, prices have been rising, in dollar terms. As mentioned above, 3% is a commonly cited average for post-Depression USA, and that’s what’s relevant to the OP’s question.
The common general rule is that for any investment you can take out 5% per year perpetually. If you take out more, you’ll eventually run out. If you take out less, it grows in value, so your payments rise.
But, given the 3% inflation rate, you’d be limited to taking out 2% per year, to have a steady income in terms of purchasing power. Of course, there are a lot of variables, and this general rule is only good for a very rough estimate.
For a more specific assessment, you can buy an annuity and negotiate the terms. If you have a set amount and want a perpetual amount of purchasing power (indexed to some standard you choose), the annuity company will tell you how much they’ll pay you. Thereafter, you’re set, provided you picked a company that doesn’t go belly-up.
You can select from any one of a number of other payment plans. For example, a friend recently retired, based on being able to purchase an annuity that paid a certain amount per year. I didn’t ask whether that was until he died, or for a fixed number of years, but I believe both options are available.
In any case, start with $2M you can get a $100K annual salary, but 50 years from now that won’t be a very good salary, if the last 100 years are any clue. You can do this with or without an annuity. Without, you’d just invest the money “reasonably” and take out 5% per year. The amount you withdraw would vary from year to year, but tend to average out … depending on how good you are at choosing investments. The reason you buy an annuity is to take less than the market rate but with a guarantee that’s not based on your ability to select investments. (It is dependent on your ability to choose an annuity firm that won’t die.)
Wages, prices and currency values are all variables over time. I’d maintain that they stay in fairly close correlation, overall, given that available work hours and food needs remain much the same.
I’m sure you maintain that based on some grand economic theory or ideology but since you haven’t given us any studies we are going to ignore it.
No, you work your way through your savings. The goal isn’t to have the same amount of money as when you started. It’s to live comfortably throughout your remaining years. If you end up dying with exactly $0 in the bank you did a really good job. 
Wasn’t used much for anything, it was considered a waste byproduct of the refining process. My grandfather (born 1911) used to clean his hands in gasoline when his hands were covered with tar or other sticky resin, so perhaps it was used as a cleaner of sorts “in the day”?
I’m trying to figure out what you mean by this. It doesn’t match up with what I suspect is true. Currency values fall. What does that correlate to? A rise in prices? Well, yes, of course.
I suspect that we have far more leisure hours than in times past. I also suspect we get a lot more for our time, in terms of goods. This is all thanks to the prodigious improvement in productivity afforded by the industrial revolution. I’m confident that we spend less of our income on food; I’ve seen articles about that routinely for decades. But I can’t find a good cite, unfortunately. I’ve also seen plenty of reports showing that food budget is shrinking compared to housing budget.
Work hours hasn’t remained the same, unless you’re talking about the US after the 40-hour workweek. Food consumption keeps rising (see how fat we all are?)
Here’s a BusinessWeek article: Bloomberg Businessweek - Bloomberg
In any case, the OP’s question was in terms of currency and whether its value would decline over the years, and the answer to that is quite confidently “yes”, despite your apparent assertion to the contrary, which I may be misunderstanding.
Well, gosh, sorry to have let you down. I really don’t much care for posters who can ask complex questions and then reject everything but a custom-written dissertation as an insufficient answer. Since I can’t recall any thread where you contributed your extensive research, I don’t really have time to spend searching up cites that will pass your high standards so you can go, “Oh, okay” and move on.
I assure you it’s what you’ll find if you follow my prior suggestions to validated data on prices and wages; it’s not what you’ll find in various blogs citing slippery concatenations of questionable data. If it’s too much work for you to do your own correlation, it’s not my problem.
I gave you a USDA citation that showed that food costs as a % of income has decreased, yet you rejected it. On what grounds did you reject this cite, other than vague claims of “It’s (a definition of personal income) still misleading unless you have strong grasp of multiple economic trends. To start with, what’s the relationship of “disposable income” between Depression-era farm families and present-day sub/urban familes? In real dollars? Yeah? Who says so?”
I don’t necessarily want to say “my cite is my cite”, but, well, there it is. The USDA says so. The affordability of a particular life-necessary good, food, has gotten cheaper in the US over the past 50 years as a percentage of income. Cite? USDA ERS - Food Expenditure Series Table 7 has some good data.