Saturday, November 26, 2011

economics from the rug man

Yesterday, the rug man arrived to give me a "free estimate" on what it would cost to cover the front room where I sit. The floor is composed of two different and well-worn kinds of wood and I thought it might be nice if there were a future uniformity ... at some point the house will have to be sold and I would like to give as much of an edge as possible to those selling it.

Bob is a former banker -- a guy whose consulting business was bought out by a bank in order to get five years of his working for the bank. After the five years elapsed, he quit and threw in his lot with the rug firm. But his whole family is into banking, so he keeps his hand in. He measured and showed me samples and then gave me a price that was, despite the "sale that ends today," outside my pocket book.

And then we chatted about the economy. And his take was this: "The dirty little secret -- the one that nobody mentions -- is that the only way to get world economies back on their feet is inflation." Inflation means that prices rise and the bang-for-the-buck diminishes -- a dollar buys less tomorrow than it buys today. I have no way of knowing whether Bob's assessment is true or not, but prices certainly are rising ... and poverty with them.

He did tell me one useful thing about buying any big-ticket items: Always buy at the end of the month: That's when retailers have to make their quota and are more likely to offer a good deal. It's little stuff like that that helps economic dummies like me.

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