Three years ago I bought four Michelin tires for my truck and paid $600 and change after taxes and a minor installation fee. Today, the same tires from the same dealer were $892 including taxes and installation fee.
I went with a cheaper Cooper tire and still ended up paying $690
Nope, you did not. The CPI has not gone up anywhere near that much. Therefore there is no inflation. Ben says so.
I agree. You must have had an out of body experience or something. Ben is always right.
Thanks guys I feel so much better now. I think I need to haze myself for questioning the wizards of money
Actually, that’s NOT inflation.
Not by Austrian standards, not by any economic standards at all.
One of the big, ugly fallacies touted by the economically misinformed, these days, is that of taking a specific price change and trying to claim that’s proof of inflation/deflation.
Even if overall prices were falling, some specific industries would be suffering price increases, for specific reasons. For example, the automotive industry is so heavily regulated, with the regulation snowballing in the past three years, that prices shooting up was inevitable. Even if we had a 10% annual price deflation overall, specific aspects of the automotive industry (like petrolium-based “rubber” tires) could easily increase in price, say, 20%, resulting in what looks like 10% “inflation”.
It’s as silly as if there were overall inflation of 10%, but because oil prices fell in half thanks to an end of some of our more idiotic foreign policy, someone were to declare “I am experiencing deflation”.
I think the OP was referring to price inflation.
It was meant to be somewhat comical. However I am willing to bet that the commodities index surge since August when Ben mentioned QE2 has had its effect on the production of tires. Also, wasn’t there talk of putting tariffs on imported tires about a year ago?
Try this:
Take the $600 to a photocopier and enlarge the bills by 50% - that should make $900. Then go back and pay the tire shop with that.
If it works - you can start singing the praises of the FED. If not - well - say hi to Bernie Madoff.
Come over here. Tyres are the only things that actually went down in price in the last two years.
A set of the same Michelin tyres cost me 280€ in Fall 2009, 260€ in Spring 2010 and 250€ just last October from the same dealer.
I’m sure that somehow this is all related to immigrants or China. The scourge of the perfectly managed US economy.