Inflation

Post 138 Costs of living

When I was in the primary school Year one in the 1950s, I could buy a bowl of noodle at the school canteen for 5 cents. When I was in Year 4 it went up to 10 cents as compared to 20 cents a bowl sold in the market. A loaf of Cold Storage bread cost 24 cents. I remember queuing up for one hour at the only cinema in town to buy a 3rd Class ticket for Cheap Matinee shows on Sundays at 20 cents. The normal tickets were sold at 40 cents each. A single storey link house in town in the 1960s could be bought at RM10, 000. My late father bought his brand new Morris Minor for RM4, 000 in the 1950s. The cost of living has gone up tremendously since then. In terms of purchasing power, one practically cannot buy anything for 5 cents now.

The rise in the cost of living means less consumer goods and services can be had with the same amount of money. Therefore if the salary or earning of a person remains the same, he becomes poorer. To him inflation has set in. However in countries with good governance and leaders of integrity, the people will not feel the pressure of high cost of living because the increase in their earnings is more than the increase in inflation rate. In fact with more money in hand, they are able to travel round the world and spend freely.

Inflation is when your children’s starting pay is near your maximum on retirement. –Quote from Ho Nee Yong

3 April 2012