Earths Story of "Price of Stuff" went UP and then DOWN suddenly?
This is the Story of why the price of “Stuff” went UP and then DOWN suddenly... ?
back then... at first...
the price of “stuff” in the 1940’s skyrocketed? (see data in graph)
This was AFTER the United States (and earths first?) first “great depression” of the 1930’s (starting around 1928) prices went way up and then the prices went way down suddenly?! However, whats different about the “great depression” was that in a lot of ways the great depression was just a few years after World War 1 and todays “economic collapse” as bad as it may seem isn’t a “world war”. I wasn’t totally surprised by the wild swing in prices in the 1940’s as much as I was surprised by the fact that World War 1 started in the summer of 1914 and ended in winter of 1918. It wasn’t until 10 full years later that we saw the great depression.
(at least from the economic data “way back then”)
While most people “say” that the great depression was “caused” by the stock market crash of 1929 perhaps it was something else? Even my grandma use to tell me (before she died) that the “great depression was really bad”… you could ALWAYS tell that grandma and grandpa where “more careful” about food and money because “something really bad happened” and that something apparently was the “Great Depression of the 1930’s and 1940’s and that really didn’t end until about the 1950’s.
Back then the United States “plunged” into its longest, deepest economic crisis of its history. It is far too simplistic to argue that a “stock market crash” was the single cause of the Great Depression. So what was this “mysterious problem”? “back then?” The Great Depression for professional and highly researched economists remains to this very day a matter of very serious active debate.
The most interesting thing on the wikipedia page about the “cause of the great depression” is the idea that the depression was “caused by a widespread loss of confidence” that led to
“drastically lower investment and persistent underconsumption.”
There are two key ideas here… the first is actually not the first the second is actually the more important.. its the idea of “overconsumption and underconsumption”. One interesting dilemma or “problem” about the reality of living on our the planet EARTH is that we consume a lot of “stuff”.
This has to do with what is known as the CPI or Consumer Price Index (which we will discuss extensively below in this “paper”). However, its important to “pray a little” because no matter what happens it might be “good” for everyone on earth to “consume a little less” even if prices go “up” rather then “down” like they did in the “last great depression”
Perhaps a type of “ironic” label for the “next” great depression would be to tall this “the last great depression”… is this the last?
Well, grandma and grandpa are still in this… even if “passed” ...away… a long time ago…
So what it “price”? Well, I spent a few hours a few years ago.. which is actually many many years ago now… studying how to “price” things and specifically how to “price products”. I even came up with a very complex diagram and details and tried to even publish my research on “academic” pricing models. I have a post on github under my research if your serious. But the general “idea” behind price models is that (price = costs + overhead + profit).. thats a fairly simple equation to use and if you take this one step further there are several “price models” typically used these are “target pricing” (add some general amount or “target” to your price). Standard Markup (pricing) where you add a % based price to your price price… then there is also something I kinda made up called “competitive indexing” or where you take a statistical sample of other peoples prices and price your product based on what others are “charging”. Dont get bored yet… however, if your really interested in the “price models” there is also some ways to maximize long term profit, short term, break even analysis or even maximize your market share by pricing your product very low or “too high”… there is a science to “pricing” and its kinda interesting… however the “real” topic here is the CPI or Consumer Price Index… so…
How does the Consumer Price Index really work? And what is it?
Its actually pretty simple. You collect a bunch of items and sample all the items prices. If the price goes up the next year the price index goes up by that same amount.. this is essentially the idea of CPI or the consumer price index. The nice part about this is that if you are “selling” a real product you can essentially “lookup the price index” and help you figure out what the cost should probably be…
Here are some samples.. say you bought something for $20 in great depression of the 1920’s… that same thing would cost you about $250 today?
1920: 20.0
1930: 16.7
1940: 14.0
1950: 24.1
1960: 29.6
1970: 38.8
1980: 82.4
1990: 130.7
2000: 172.2
2010: 219.2
2018: 251.1
Many years ago I thought about starting my own business however we really didn’t sell “products” we sold “services” and actaully when you think about it.. services are “better” on the environment because you dont have plastic waste for example.. we did a “pickup and delivery service” called “zoom”. However, I’m currently working on starting a new project where we are working on “foods” so the “price” is more important in terms of how to pick a price.
So, this is kinda my “final” (thank god?) posting on “what might happen to prices” (I was working on another study of this before…) in the next few months and possibly years? Its really the first time ive “seriously” studied consumer price indexes over the past 70+ years, (think about how cool it is that we have all this data? And 70 years of it?) and lets hope that because this is “real data” on “prices” and CPI index. (so, hopefully the CPI data from the Federal government is “correct!?” since I did put in some considerable time studying it.. .and its 70 years of data going back to the 1960’s which is “great”… )
:)
Its only after you get “older” or “much older” that you realize that prices matter and that prices really do go up. Perhaps it was… “the price of candy” that kinda changes an adults mind for the CPI?? you know your (too) old when candy is still too expensive?
After thinking about the “prices” perhaps too much (read on?)… I edited and then “over edited this…” the data? Thats it? This graph is almost impossible to understand… (unless your me!?) I was hoping to make this ½ artwork and ½ a logical study of the “CPI” (Consumer Price Index).
;)
Some of the “toughest” patterns to argue against are those that “always go up” or “down”. The Consumer Price Index and “prices” ALWAYS seem to go UP?!!
So to better “see” the price “action” .. I added a price oscillator.. so what your looking at is not the price index its the “price index” oscillator over the last 70 years!? “mathematical oscillators” help us see the “invisible (patterns if you will)” the invisible “ups and downs” details when something “always goes up” (its like studying a derivative from calculus?!.. because its the difference between two averages or sorta the “change between averages”). So we might think that “prices always will go up” but at sometime… prices in the future can’t just go up and up? Right? if prices keep going up and up? Boo?m
One of the most difficult ideas in economics is “what numbers to trust”… and how “accurate” are the federal governments economic “indicators” or numbers? Its surprising because “trandingview” doesn’t really have very many “indexes” or “economic indicators” that are very helpful. In fact while there are thousands of stocks to study there are less then 100 “economic indicators” and most of them seem useless… perhaps except CPI Consumer Price Index? There is one for PERSONAL CONSUMPTION EXPENDITURES that has data on “tradingview” but “no one” not one person has commented or added any ideas for this topic yet.. as if it “wasn’t important” or perhaps the federal gov data is just “irrelevant”? Why is the Consumer Price Index or CPI not accurate? One side point before, some people have suggested that the CPI tends to “overstate” inflation. So while the prices where “25%” of what they are today back in the 1970’s it maybe hasn’t changed that badly? So CPI in some ways although isn’t very accurate.. it does “magnify” inflation and thats maybe one reason why people study CPI more then “inflation” or even “interest rates?”
The funny thing about patterns particularly economic patterns is that why should we “expect” something? Based on the past?
What cost us (everyone on Earth?) $25 in the 1970’s today costs us $200 (or more?)… thats about 8x what it use to cost? The population on our planet in the 1970’s was around 3 to 4 billion today its about 7 to 8+ billion not to mention all the plants and animals needed to feed these 3 to 8 billion people? I was very surprised when I discoverer that the “bio mass” of “worms” is about 10 times that of humans, however, there is more bio mass of cows on earth then people and something like 1 to 3 chickens for every human on earth. See Wikipedia article on “Biomass_(ecology)”? I guess we are not sure if there is more “biomass” in Ant with 1,200+ different species of ants or Humans at least according to the data? I did see a VERY large ant today when I was outside trying to get my seedlings started for this summer today.
Detailed Discussion:
From the CPI data you can see two “main” time periods.. surprisingly the “current” time is that we are in an “era” of “deflation” not inflation as many people suggest… according to the CPI prices have YES gown up “since about May of 1980 to 2020” but they have “slowed” the inflation. So its almost like from 1940’s to 1980’s we see “inflation” and then the current time is surprisingly part of a “deflation”
However, whats also super interesting is these “red” (hyperbolic curves) that I added. (if your familiar with hyperbolic functions) its kinda interesting to see them in “real data” like CPI? The main two “curves” seem to be part of a “very weird” change recently that started “right around the crash of 2008” which was a major “banking” crash where people wanted housing loans.. and suddenly couldn’t get them when in 2007 “money was easy”. The world markets crashed in 2008 and its not totally true that this was a “american banking” problem.. we see the “housing crisis” globally. So the Hyperbolic Curve in “red” flipped suddenly around 2008.
I also tried to add two “mixed” sine waves.. one “upper sign” and one “lower sign” the lower sign is kinda the result of the 2008 “crash” and the more recent “new future” for 2020.
Its entirely possible that the problem is with “natural resources?” the crash we saw in 2008 was “housing” the one “today” is about “virus” and really a “seafoods wholesale foods market” located in Wuhan (central Yangtze china, the longest 4000 miles? hopefully fresh water river in asia) sailing right past the economics (market) of Shanghai but FROM Wuhan?
.. thats all for now…
:)
Asher
PS: sailing around the earth is always free... and / but very competitive... if you want to race... ;)
its also maybe very lonely when your very very far from everything?
back then... at first...
the price of “stuff” in the 1940’s skyrocketed? (see data in graph)
This was AFTER the United States (and earths first?) first “great depression” of the 1930’s (starting around 1928) prices went way up and then the prices went way down suddenly?! However, whats different about the “great depression” was that in a lot of ways the great depression was just a few years after World War 1 and todays “economic collapse” as bad as it may seem isn’t a “world war”. I wasn’t totally surprised by the wild swing in prices in the 1940’s as much as I was surprised by the fact that World War 1 started in the summer of 1914 and ended in winter of 1918. It wasn’t until 10 full years later that we saw the great depression.
(at least from the economic data “way back then”)
While most people “say” that the great depression was “caused” by the stock market crash of 1929 perhaps it was something else? Even my grandma use to tell me (before she died) that the “great depression was really bad”… you could ALWAYS tell that grandma and grandpa where “more careful” about food and money because “something really bad happened” and that something apparently was the “Great Depression of the 1930’s and 1940’s and that really didn’t end until about the 1950’s.
Back then the United States “plunged” into its longest, deepest economic crisis of its history. It is far too simplistic to argue that a “stock market crash” was the single cause of the Great Depression. So what was this “mysterious problem”? “back then?” The Great Depression for professional and highly researched economists remains to this very day a matter of very serious active debate.
The most interesting thing on the wikipedia page about the “cause of the great depression” is the idea that the depression was “caused by a widespread loss of confidence” that led to
“drastically lower investment and persistent underconsumption.”
There are two key ideas here… the first is actually not the first the second is actually the more important.. its the idea of “overconsumption and underconsumption”. One interesting dilemma or “problem” about the reality of living on our the planet EARTH is that we consume a lot of “stuff”.
This has to do with what is known as the CPI or Consumer Price Index (which we will discuss extensively below in this “paper”). However, its important to “pray a little” because no matter what happens it might be “good” for everyone on earth to “consume a little less” even if prices go “up” rather then “down” like they did in the “last great depression”
Perhaps a type of “ironic” label for the “next” great depression would be to tall this “the last great depression”… is this the last?
Well, grandma and grandpa are still in this… even if “passed” ...away… a long time ago…
So what it “price”? Well, I spent a few hours a few years ago.. which is actually many many years ago now… studying how to “price” things and specifically how to “price products”. I even came up with a very complex diagram and details and tried to even publish my research on “academic” pricing models. I have a post on github under my research if your serious. But the general “idea” behind price models is that (price = costs + overhead + profit).. thats a fairly simple equation to use and if you take this one step further there are several “price models” typically used these are “target pricing” (add some general amount or “target” to your price). Standard Markup (pricing) where you add a % based price to your price price… then there is also something I kinda made up called “competitive indexing” or where you take a statistical sample of other peoples prices and price your product based on what others are “charging”. Dont get bored yet… however, if your really interested in the “price models” there is also some ways to maximize long term profit, short term, break even analysis or even maximize your market share by pricing your product very low or “too high”… there is a science to “pricing” and its kinda interesting… however the “real” topic here is the CPI or Consumer Price Index… so…
How does the Consumer Price Index really work? And what is it?
Its actually pretty simple. You collect a bunch of items and sample all the items prices. If the price goes up the next year the price index goes up by that same amount.. this is essentially the idea of CPI or the consumer price index. The nice part about this is that if you are “selling” a real product you can essentially “lookup the price index” and help you figure out what the cost should probably be…
Here are some samples.. say you bought something for $20 in great depression of the 1920’s… that same thing would cost you about $250 today?
1920: 20.0
1930: 16.7
1940: 14.0
1950: 24.1
1960: 29.6
1970: 38.8
1980: 82.4
1990: 130.7
2000: 172.2
2010: 219.2
2018: 251.1
Many years ago I thought about starting my own business however we really didn’t sell “products” we sold “services” and actaully when you think about it.. services are “better” on the environment because you dont have plastic waste for example.. we did a “pickup and delivery service” called “zoom”. However, I’m currently working on starting a new project where we are working on “foods” so the “price” is more important in terms of how to pick a price.
So, this is kinda my “final” (thank god?) posting on “what might happen to prices” (I was working on another study of this before…) in the next few months and possibly years? Its really the first time ive “seriously” studied consumer price indexes over the past 70+ years, (think about how cool it is that we have all this data? And 70 years of it?) and lets hope that because this is “real data” on “prices” and CPI index. (so, hopefully the CPI data from the Federal government is “correct!?” since I did put in some considerable time studying it.. .and its 70 years of data going back to the 1960’s which is “great”… )
:)
Its only after you get “older” or “much older” that you realize that prices matter and that prices really do go up. Perhaps it was… “the price of candy” that kinda changes an adults mind for the CPI?? you know your (too) old when candy is still too expensive?
After thinking about the “prices” perhaps too much (read on?)… I edited and then “over edited this…” the data? Thats it? This graph is almost impossible to understand… (unless your me!?) I was hoping to make this ½ artwork and ½ a logical study of the “CPI” (Consumer Price Index).
;)
Some of the “toughest” patterns to argue against are those that “always go up” or “down”. The Consumer Price Index and “prices” ALWAYS seem to go UP?!!
So to better “see” the price “action” .. I added a price oscillator.. so what your looking at is not the price index its the “price index” oscillator over the last 70 years!? “mathematical oscillators” help us see the “invisible (patterns if you will)” the invisible “ups and downs” details when something “always goes up” (its like studying a derivative from calculus?!.. because its the difference between two averages or sorta the “change between averages”). So we might think that “prices always will go up” but at sometime… prices in the future can’t just go up and up? Right? if prices keep going up and up? Boo?m
One of the most difficult ideas in economics is “what numbers to trust”… and how “accurate” are the federal governments economic “indicators” or numbers? Its surprising because “trandingview” doesn’t really have very many “indexes” or “economic indicators” that are very helpful. In fact while there are thousands of stocks to study there are less then 100 “economic indicators” and most of them seem useless… perhaps except CPI Consumer Price Index? There is one for PERSONAL CONSUMPTION EXPENDITURES that has data on “tradingview” but “no one” not one person has commented or added any ideas for this topic yet.. as if it “wasn’t important” or perhaps the federal gov data is just “irrelevant”? Why is the Consumer Price Index or CPI not accurate? One side point before, some people have suggested that the CPI tends to “overstate” inflation. So while the prices where “25%” of what they are today back in the 1970’s it maybe hasn’t changed that badly? So CPI in some ways although isn’t very accurate.. it does “magnify” inflation and thats maybe one reason why people study CPI more then “inflation” or even “interest rates?”
The funny thing about patterns particularly economic patterns is that why should we “expect” something? Based on the past?
What cost us (everyone on Earth?) $25 in the 1970’s today costs us $200 (or more?)… thats about 8x what it use to cost? The population on our planet in the 1970’s was around 3 to 4 billion today its about 7 to 8+ billion not to mention all the plants and animals needed to feed these 3 to 8 billion people? I was very surprised when I discoverer that the “bio mass” of “worms” is about 10 times that of humans, however, there is more bio mass of cows on earth then people and something like 1 to 3 chickens for every human on earth. See Wikipedia article on “Biomass_(ecology)”? I guess we are not sure if there is more “biomass” in Ant with 1,200+ different species of ants or Humans at least according to the data? I did see a VERY large ant today when I was outside trying to get my seedlings started for this summer today.
Detailed Discussion:
From the CPI data you can see two “main” time periods.. surprisingly the “current” time is that we are in an “era” of “deflation” not inflation as many people suggest… according to the CPI prices have YES gown up “since about May of 1980 to 2020” but they have “slowed” the inflation. So its almost like from 1940’s to 1980’s we see “inflation” and then the current time is surprisingly part of a “deflation”
However, whats also super interesting is these “red” (hyperbolic curves) that I added. (if your familiar with hyperbolic functions) its kinda interesting to see them in “real data” like CPI? The main two “curves” seem to be part of a “very weird” change recently that started “right around the crash of 2008” which was a major “banking” crash where people wanted housing loans.. and suddenly couldn’t get them when in 2007 “money was easy”. The world markets crashed in 2008 and its not totally true that this was a “american banking” problem.. we see the “housing crisis” globally. So the Hyperbolic Curve in “red” flipped suddenly around 2008.
I also tried to add two “mixed” sine waves.. one “upper sign” and one “lower sign” the lower sign is kinda the result of the 2008 “crash” and the more recent “new future” for 2020.
Its entirely possible that the problem is with “natural resources?” the crash we saw in 2008 was “housing” the one “today” is about “virus” and really a “seafoods wholesale foods market” located in Wuhan (central Yangtze china, the longest 4000 miles? hopefully fresh water river in asia) sailing right past the economics (market) of Shanghai but FROM Wuhan?
.. thats all for now…
:)
Asher
PS: sailing around the earth is always free... and / but very competitive... if you want to race... ;)
its also maybe very lonely when your very very far from everything?
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.