Bad news on the price of tools. (morphing into OT)

[Peter Quadarella]

I'll agree that it feels worse than 4%, but I think some of that you mention depends greatly on location. For example, my utility bills have decreased due to the use of CF bulbs everywhere and I use electricity for heating; the rising gas and oil prices did not affect me in that way in my location.

My housing is perhaps 50% more expensive than it was that long ago. Some people in my neighborhood will claim that is nuts, but that is because everyone around here seems to insist on a brand new house, and no one realizes that the 30 year old ones are a great bargain. And housing costs are going down right now .

Food prices are more expensive when I go to the local super jazzy grocery store that does everything but wipe my butt for me, but when I go to Costco or the local stand prices are actually cheaper than they used to be, since those choices were not available to me back then.

Yes, gasoline prices have gone nuts. But nearly everything else is cheaper it seems. Cars are less expensive if you adjust for inflation, electronics are just cheaper period. Computers, televisions, and yes, power woodworking tools are better and cheaper.

Now, if you drive a lot, and just had to buy that brand new house in the last 5 years, and have little disposable income, so most of it goes to food, which you only buy at the most convenient grocery store, yes it's going to seem a lot worse than the Fed claims. And yes, I realize this scenario describes many Americans.

[Stephen Edwards]

I sorta figured that was one of the hoped-for consequences of the weak dollar policy. I wonder if letting manufacturing decline was intentional policy--make older facilities obsolete and turn 'em into museums(Bethlehem Steel works for example) and build new & modern. Germany & Japan's industries did rather well after being totally rebuilt in the 1940's and 1950's. I wonder if some decided to do something similar in the U.S. without being bombed most of the way back to the stone age first.

Actually, the US Steel Industry is in the in the midst of a strong comeback. I read an article this week about it in the Washington Post:

http://www.washingtonpost.com/wp-dyn...052703099.html

The story quotes in part "Buoyed by sharply reduced employee costs, soaring global demand, dramatic consolidation that has tamped down cutthroat competition and a weakened dollar that has made imports less attractive, steel prices have tripled in the past five years. For the first time in decades, companies operating in the United States have added capacity and workers."

It's a good article that explains what's going on in the steel industry in America. Personally, I don't see tool prices going in any direction but North!

[David DeCristoforo]

If it takes energy to produce, it's going to "go up". Sorry boys but that's the way it is. The "silver lining" of this cloud is a long way out but it's there (assuming that we manage to escape the apocalypse in the mean time). It will take a while but the only rational route is to return to making things more "locally" and less "globally". It's gonna take some time and sacrifice because we need to do a lot of long overdue work on stuff like alternate energy sources and rebuilding manufacturing facilities that we have dismantled and sold to China in the form of scrap steel, copper and iron. And we need to pay a lot more attention to how what we do effects the environment. But I think we can rise to the occasion. Well OK, it's also going to take a "small attitude adjustment". What we need is the same kind of "can do" attitude that put a man on the moon. Now if only we had the foresight to have put those resources into "alternative energy"!

I was watching an ad on TV paid for by some big energy company saying how we had enough energy reserves in "clean coal" to power so many millions of homes and cars for sixty years and I found myself thinking "Great"! Sixty years. No problem. That's way off in the future right? So why worry?". GIMMIE A BREAK!!! That's exactly the kind of shortsightedness that got us into this mess in the first place. Our first big wake up call came in the early 70's and that's already almost forty years ago. And we still ain't done squat about it.

Ooo, am I ranting? Heh, heh... sorry.....

[Ken Fitzgerald]

I don't believe the fed. Their inflation index proportions are wrong, and don't accurately reflect the buying power of the dollar.

Housing has tripled in price in most areas in the last 8 years, and gasoline is 3x higher. Energy costs (fuel oil, natural gas, electricity) for home heating has at least tripled in the same time period. Food price are probably up 20% (and will rise higher when gas prices start feeding back into the prices). Those things represent a large portion of most peoples spending, so I think that the average rate of inflation as felt by my wallet is probably in the double digits.

Neither housing or natural gas or electricity have tripled in my area in the last 8 years. Food prices up?...Yup...energy, fertilizers and seed are all up so food prices are going up.

We'll recover but it's going to take time and a little suffering in the process.

[Bruce Benjamin]

I don't believe the fed. Their inflation index proportions are wrong, and don't accurately reflect the buying power of the dollar.

Housing has tripled in price in most areas in the last 8 years, and gasoline is 3x higher. Energy costs (fuel oil, natural gas, electricity) for home heating has at least tripled in the same time period. Food price are probably up 20% (and will rise higher when gas prices start feeding back into the prices). Those things represent a large portion of most peoples spending, so I think that the average rate of inflation as felt by my wallet is probably in the double digits.

I'm not sure where you live or where you get your figures but here in Northern California nothing has tripled in price as you state. Not even close. We have regular gas from around $4.15 to $4.60 a gallon but 8 years ago gas was about half that price.

I doubt that housing prices are 3x higher now than 8 years ago anywhere in the U.S. My house is about 50% higher now, not 300% higher. 16 years ago I lived in a 2 bedroom apartment and paid $650 a month. A friend of mine now rents the exact same apartment and pays $850 a month and these apartments are considered to be overpriced compared to similar apts. right next door going for about $750 a month. Are you seriously saying that there are places in the U.S. where apts. that were $650 a month in 2000 are now renting for almost $2000 a month? I doubt that.

Food prices are up around here but I don't know that they're up 20%. They might be but absolutely not 300% higher. Go to any restaurant and look at the menu prices. They aren't anywhere near 3x the price they were 8 years ago.

I don't remember what my natural gas bill was then but my electrical bill is about the same. A cord of firewood is a little higher than it was 8 years ago. A cord of oak is around $250 delivered and stacked and back then I think the same thing was a little under $200.

Again, I don't know where you got your info but I don't think it's anywhere near being accurate. This sounds like something from Moveon.org. Somebody on this forum has a signature line that says something to the effect that a man has a right to his own opinions but not his own facts. Your facts are way off.

Bruce

[Peter Quadarella]

I just want to add one other thing, from an optomists standpoint. I don't mean to belittle the bad state of things. But - and no offense meant to our European friends out there - that Americans love their independence and big engines too much to sit idly by and buy smaller and smaller cars forever. I have to think that as fuel prices rise, the push for innovations, and the giant carrot at the end of the stick will be too great to ignore. And some day, someone's going to come up with an alternative energy source that works better than gasoline.

OK, it's a while off before that happens, but lack of dependence on oil could be another silver lining someday.

[David DeCristoforo]

"OK, it's a while off before that happens, but lack of dependence on oil could be another silver lining someday."

The "silver linings" are there but it's going to be tough getting to them. We need a fundamental shift from an economy that is based on growth to one based on sustainability. Growth is "logarithmic" in nature and it's only a matter of time before it "tops out". It is not going to be easy to convince the "economic fascists" that while they do need profit, they don't need nearly as much profit as they think they do. That's probably going to be the most difficult aspect. I think the turning point was when we stopped referring to ourselves as "people" and began referring to ourselves as "consumers". We need to become "people" again.

[Pat Germain]

I think the turning point was when we stopped referring to ourselves as "people" and began referring to ourselves as "consumers". We need to become "people" again.

Well said, Dave. It seems people used to be primarily focused on their relationships; friends, family, neighbors, coworkers. Now it seems everyone is focused on themselves; home, boat, cars, vacations, investments. I'd like to see people get back to relationships. A cooler economy may force people to do so.

Shoot, if someone could figure out how actually make health care less expensive, I could buy all European tools!

[Doug Hess]

I took my Woodcraft flyer to Lowes yesterday, and got an extra 10% of the price of my new Bessy Clamps.

This my first post, I love listening to you guys (so to speak)

[Clifford Mescher]

Everyone has some sort of opinion on this I suppose and we're free to express it. But I just think it's really funny how some people take something as incredibly complex and difficult to predict as the world economy and say that they would've done it differently and better. Really? Just how successful is YOUR Fortune 500 company? Mine isn't doing so well but that's because I invested all of the profits into the Pet Rock industry. I swear to you I will NEVER AGAIN take my financial advice from an internet forum.

Bruce

Mostly a lurker. I just laugh at the "I told you so" crowd.Clifford

[Christopher Pine]

Mostly a lurker. I just laugh at the "I told you so" crowd.Clifford

Very well said ! I like in the movie depicting the appolo 13 events. The part where the nasa folks were prepearing for the worst and the one gentleman said "I believe this will be our finest hour!" I think if we all get out of the stinking thinking mode and the news media just waiting for the next bad thing to happen so they can have a teaser during Everybody Loves Raymond to get you to watch their pitiful news cast. We are America and we are going to overcome a heck of a lot more than Gasoline prices in the future! We have so much to do... so much human suffereing to overcome in this world and we sit here gripeing about our woodowrking machine costing a few bucks more!
All due respect I don't like it anymore than any of you, but it is hardly anything worth losing sleep over!
Peace!

Chris

[Matt Ocel]

I love listening to everybody's version of "The sky is falling" fact is EVERYTHING is cyclicle.

PERIOD!

I have been listening to people, talk radio, TV news, about how bad it is and what to do to save and make it through these hard times.

They are just replaying the same old stuff from the 70's and earll 80's, and I suppose the old timers have heard it more than that.

The way I see how to make it through this is, Be smart, and work hard, these tough times shall pass.

Now excuse my I have to go and buy the Powermatic 31A.

[Dave Lehnert]

And to think all I thought I was doing was pointing out if you are thinking about buying a new tool you may want to do it soon.

[Lee DeRaud]

And to think all I thought I was doing was pointing out if you are thinking about buying a new tool you may want to do it soon.

No good deed goes unpunished.

[Steve Schoene]

I don't believe the fed. Their inflation index proportions are wrong, and don't accurately reflect the buying power of the dollar.

All in all, inflation has remained relatively well in check. It's not accelerating very dramatically at all. Inflation is a rise in average prices. Increases in prices of gasoline may, or may not contribute to inflation. Even if fuel is a component of cost for a great many products, that does not mean that the prices for those products will rise. Sometimes, costs rise, prices remain constant, and profits and/or wages or rents fall in reaction to the input cost increases. Markets don't guarantee that costs of production can be passed on to buyers. Eventually, that must be true, but the adjustment mechanism may well be through the failure of producers or productivity enhancement, etc.

Just a couple of points: The fed has nothing to do with the price indices. The consumer price index and the producer price index are generated by the Bureau of Labor Statistics, an agency of the Labor Department. The fed, or Federal Reserve Board, is an independent agency. The proportiona are determined by rather extensive surveys. It is true that the proportions are averages, and may not reflect the buying habits of any specific person. And, over time buying habits change but the proportions are readjusted only periodically. But, in general this means that the index may overstate the true welfare effects of the price changes as people tend, at least on average, to switch their person spending toward goods which have become bargains, and to economise by spending less on products which have become more expensive. All indices, by their very nature, must have some biases.

If you want more flexible proportions in a price index, some people prefer to use the Implicit Price Deflator for GDP. This has a difference set of index number biases. The Implicit Price Deflator is published by the Bureau of Economic Analysis, and agency of the Commerce Department.