Howard Brazee <howard@brazee.net> wrote:
> "pullo" <pullo004@yahoo.com> wrote:
>> Or to get them excited, mention the current minimum wage and
>> average income.

> But we've had inflation as long as we've had money. People expect
> it to happen.

Not in the US in the 1920s. US money was backed by gold, and
inflation was one of those ancient evils that the US was built to get
away from. A 1920s American would be as horrified to learn that the
US adopted fiat money as he would be if someone claimed that the
presidency had been abolished and replaced with a dictatorship --
another ancient evil that nobody expects here.

> The more odd things are to find that computers a lot more powerful
> than what they knew back then are cheaper than cars that aren't that
> much different from their old cars.

I think they'd have a hard time figuring out what computers would be
good for. Okay, whoever publishes tables of trig and log functions
could use one -- once. But why would that publisher ever need to
generate those same tables again, and to do so a million times faster?

I think they'd be more surprised that overseas phone rates are so
cheap that outsourcing is feasible, i.e. the phoning overseas is
cheaper than paying an American to answer the phone.
--
Keith F. Lynch - http://keithlynch.net/
Please see http://keithlynch.net/email.html before emailing me.

In article <fkciov$5n4$1@panix2.panix.com>,
Keith F. Lynch <kfl@KeithLynch.net> wrote:
>Howard Brazee <howard@brazee.net> wrote:
>> But we've had inflation as long as we've had money.

"In this year Philip of France made 15 deniers worth 5." Somewhere in
_A DIstant Mirror_.

>> People expect it to happen.
>
>Not in the US in the 1920s. US money was backed by gold, and
>inflation was one of those ancient evils

The inflation rate for 1916-1919 was in double digits each year. The
1918 rate was just over 20%, which was way bigger than anything in the
1970s and 1980s.
<ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt>

You'd doubtless point out the -10.8% of 1921 and -2.3% of 1922, and
the nearly flat rates thru 1929. Still, the fall of 1921+1922 is
about the same magnitude as the rise in 1916 alone. Substantial
deflation didn't hit again until the Depression.

>A 1920s American would be as horrified to learn that the US adopted
>fiat money

If he was ignorant of "greenbacks" from the Civil War and after,
yeah. Or, heck, if he didn't know about the flood of worthless notes
from broken banks before the Civil War.

--
Tim McDaniel, tmcd@panix.com

Tim McDaniel <tmcd@panix.com> wrote:
> The inflation rate for 1916-1919 was in double digits each year.
> The 1918 rate was just over 20%, which was way bigger than anything
> in the 1970s and 1980s.

> <ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt>

> You'd doubtless point out the -10.8% of 1921 and -2.3% of 1922, and
> the nearly flat rates thru 1929.

Yes. Inflation was indicative of disaster, and after the disaster
was over, government *deflated* the currency back to its pre-disaster
level. The same thing happened during and after the Civil War.

Someone from the 1920s seeing what today's prices are like would
probably assume that something as catastrophic as the Civil War
had started shortly after his time, and was still ongoing in 2007.
--
Keith F. Lynch - http://keithlynch.net/
Please see http://keithlynch.net/email.html before emailing me.

On 2007-12-21 20:07:00 -0800, "Keith F. Lynch" <kfl@KeithLynch.net> said:

> Someone from the 1920s seeing what today's prices are like would
> probably assume that something as catastrophic as the Civil War
> had started shortly after his time, and was still ongoing in 2007.

Unless he was in a dentist's office, where nothing would astonish him.

kdb

Back from Christmas vacation.

In article <fki2h4$kgp$1@panix3.panix.com>,
Keith F. Lynch <kfl@KeithLynch.net> wrote:
>Tim McDaniel <tmcd@panix.com> wrote:
>> The inflation rate for 1916-1919 was in double digits each year.
>> The 1918 rate was just over 20%, which was way bigger than anything
>> in the 1970s and 1980s.
>
>> <ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt>
>
>> You'd doubtless point out the -10.8% of 1921 and -2.3% of 1922, and
>> the nearly flat rates thru 1929.
>
>Yes. Inflation was indicative of disaster

If you equate "major war" with "disaster". Even in so-called "hard
money" times, war caused inflation, and many disasters did not cause
inflation.

>and after the disaster was over, government *deflated* the currency
>back to its pre-disaster level.

As I pointed out when citing
<ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt>, it did not:
the post-war deflation undid only the inflation of 1916 (and .5%
more), a pre-war year and the least inflation of 1916-1920. Not even
1932 was able to drop prices below 1917's level.

I don't know the history, so I don't know whether the government
deliberately deflated the currency. Given the laissez faire
attitudes and crudity of controls (e.g., the Fed and the US Government
helping cause the US's Great Depression), I have my doubts.

--
Tim McDaniel, tmcd@panix.com