Wed 28 May 2014
Posted by RichSlick under The Fed
Comments Off on The Price Is Right “ShowCase” and Inflation
This past Memorial Day Weekend, which I spent at home, I watched an old show on TV that I hadn’t seen in decades, it’s a TV show called the Price is Right. The premise of the show is for people come up and try to guess the prices of items to win various prizes then vie for a chance to enter the “ShowCase Showdown” for a chance to win a few more prizes.
During the summers of my youth, I watched this show almost daily and was always in awe of the prizes. A funny thing happened as I was watching the show and the famous spinning of the big wheel to determine who gets to go to the showcase. The host, Drew Carey, notified the contestants that if they land on the 1.00 mark, they’d win a whopping $1000! Whoa….wait…what? Just a measly $1000?
The show started in 1972 and I don’t know if the jackpot for landing on the 1.00 was $1000 back in 1972 or not but by the 80s I’m pretty sure that landing on the 1.00 awarded you a $1000 prize. I went back and did the calculations and adjusting for inflation at 3% per year for 42 years (1972-2014), the Showcase 1.00 should payout $23,701 today in inflation adjusted dollars. To be fair, the jackpot does offer $25,000 if you hit the 1.00 mark twice but that’s what the jackpot should be for just landing there once if all things were kept equal and consistent. You can think about this another way, how much groceries or gasoline do you think you could have bought with $1000 in 1972 with what you can buy today?
In today’s world where wages are stagnant and minimum wage barely pays for substandard living, it’s important to understand the real enemy: Federal Reserve fictitious interest rate policy to inflate currencies. Dim-witted people that call themselves “Republicans” or “Democrats” with hopes of working through a “political process” to solve problems don’t ever seem willing to handle the real cause of all economic problems. Don’t expect any changes any time soon for as long as clowns are in charge, that ShowCase jackpot will continue to be worth $1000 and people will laugh in a decade or two when $1000 buys a can of Coke.