05 July 2014

Bloody Expensive!

In 1954 a British L1A1 cost £30.  That was about $83.50 at the time or $749.34 today (USCPI31011913).

A brand new FAL from DSA is MSRP $1,700.

I think I'd be tickled pink to get an L1A1 for $750.

Positively giddy to get one for under $100.

Of course, if an FAL was $85 everything would be cheaper with it, and the household income would be proportionally smaller as well.

Inflation is something that really only matters if your income isn't keeping up and/or if you have a loan that's in a fixed amount of a given currency.

If your income isn't rising at the same rate as inflation, your income is actually shrinking.

If you have a loan in a fixed amount of a given currency, inflation makes the loan amount smaller.

This same sort of equation is why you can honestly say that funding for a given item was cut when spending in dollars actually increases.  If the increase in spending doesn't meet of exceed inflation then it is an actual drop in funding because the money buys less.

I used the US Consumer Price Index to get the L1A1 value because it's handy.  But since the USCPI doesn't account for a lot of everyday items in its "basket" and the items in the basket change over time and aren't 100% fungible with each other it's accuracy is debatable.  Many means of calculating inflation far outpace the USCPI.

Using the FAL example, real inflation on guns is more than twice what the CPI says it should be.

Addendum:

With all this in mind, if your method of savings isn't paying more than even the official inflation rate, you are losing money as the value of the deposit shrinks.  It's shrinking even worse under the real inflation rate too.

If you managed to get a loan with interest smaller than inflation, congratulations!  You're actually making a smaller payment every month as they fall behind on the value.

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