Bob Dylan sure got it right when he sang, “The times they are a-changin.” If you need proof, just take a look at the prices of food and goods at your local grocery store.
You can probably recall a time when your grandparents started talking – with a wistful twinkle in their eye, no doubt – about how they used to be able to go to the grocery store and get their favorite candy for just pennies or buy a brand new car for less than half of what a golf cart cost today.
Of course, what they probably left out was that when minimum wage was $0.40 an hour, money wasn’t quite as abundant as it is today. Nowadays, the federal minimum wage is set at $7.25 an hour, and some states have an even higher minimum wage rate.
Seattle, Washington boasts the highest minimum wage in the country; the city recently approved a plan to increase to the minimum pay to $15 an hour. If you made $15 per hour back in the 1940s, you would have been able pay off a new car in just two 40-hour work weeks. And the candy could be endless!
However, along with the raise in pay over the decades came an increase in the cost of goods and services. This rate of increase is known as inflation, and it is the bane of anyone who holds paper currency. Inflation is the rate at which the value of your hard-earned money decreases and what is responsible for the rising cost of groceries, gas and almost everything else.
How much have prices gone up in the last few decades? You might be surprised…
In 1980, you could buy a pound of ground beef for about $1.78. Now, that same pound will cost you $4.22. Here are some other price differences from then to now:
| Item | 1980 | 2014 | Inflation Rate |
| Gasoline (per gallon) | $1.25 | $2.62 | 110% |
| Chicken (per pound) | $0.71 | $1.54 | 117% |
| Bananas (per pound) | $0.33 | $0.59 | 79% |
| Bread (per pound) | $0.51 | $1.47 | 188% |
| Milk (per gallon) | $1.08 | $1.75 | 62% |
| Coffee (per pound) | $3.23 | $4.59 | 42% |
Check out this interactive chart to see more about how inflation has affected the cost of these everyday items in the last 35 years, including which political party was in power and a few surprising dips and spikes from then until now.
Like it or not, inflation is inevitable. In moderation, it can be a natural positive indicator of a growing economy. However, the trick for investors is minimizing the negative effects of inflation on their personal wealth and assets.
Precious metals like gold bullion are known as safe-haven commodities because they are best at retaining their long-term value and protecting portfolios from being devalued due to inflation.
Consider adding gold, silver and other inflation-busters to your investment portfolio today to protect your assets from currency depreciation. You can shop for coins or bars on our online store, or browse our Gold and Silver Bullion Investors Knowledge Center and blog for more info about the benefits of precious metals investing.
Give us your take on inflation and the rising cost of goods in the comments section below, or via Facebook and Twitter.
The increasing cost of gasoline at the gas station is not necessary the result of monetary inflation. The cost of pumping the oil out of the ground went up in terms of energy (not Dollars). It takes more energy and effort to pump the remaining oil in the ground This is similar to getting ketchup out of the bottle. When the ketchup container is full, is very easy to squeeze the ketchup out. Near the end, it is getting more and more difficult to remove the remaining ketchup out of the bottle. The same principle applies to pumping oil. So the price of oil must increase relative to other goods and services in order to reflect the growing scarcity of oil. Since the price of oil is essential for the production of many other commodities (like metals), an increase in the price of commodities is not always the result of monetary inflation.
Who’s getting coffee at $4.19 a pound? What is it, freeze dried crystals furcryinoutloud? Who drinks that swill?
It’s not about how much money things cost, or how much you make or what the minimum wage is, the article itself actually hits on the real issue, the abundance of money in the system. Years of printing money with nothing backing it has caused the buying power of each dollar to be less and less, there in lies the problem. It’s not that people make more money or things cost more, it’s that the dollar isn’t worth as much as it used to, so in effect even though you might have a bigger paycheck, your income hasn’t changed for the better, and most likely for the worse, since you have to pay more for the essentials and pay increases have not kept up with the higher prices. Inflating the currency supply has never been a long term solution to any economic crisis, and in fact it usually leads to an economic colapse, that is another reason to buy and hold precious metals, protect your wealth, hedge against inflated currencies. Only time will tell, but I for one am certain that in the long term Gold and Silver will outlast any fiat currency system.
Well said. One thing….you said our “paper money” isn’t worth as much. IT’S WORTH NOTHING. Thank NIXON for bowing to the big banks and getting rid of the gold standard. This next crash is going to be epic. People will Suffer and die in FEMA camps. The body bags and barbed wire are waiting. WAKE UP WHITE PEOPLE!
You are correct, it is “worthless” …and I should have stated that in my comments, however since the article is about your buying power in the grocery store, I was using the ‘dollar’ as a basis for the argument. Also, it’s not like you can purchased your essentials with silver….at least not yet.
I’m sure we’ll get there soon enough.
Just WHITE people, Jason? Hmmm. Good to know.