> Why do people use inflation? Because it is very hard to think about the currency values in terms of purchasing power. Inflation is the lowest metric in that

> Why do people use inflation? Because it is very hard to think about the currency values in terms of purchasing power. Inflation is the lowest metric in that count, but reflects a somewhat uniform drop in purchasing power (per dollar) across the whole market. My friend's mom told me her mortgage for a Bay Area house was 75$ a month, the two cars parked in front were worth more than a 2 bed house when she got the cars. So it was much cheaper to buy a house, but much more expensive to get a car and I can't even have a ballpark figure for what a gigabyte of computer memory would have cost in 1971. So, inflation adjustment is at best a rough proxy for purchasing power at current costs.