Yesterday I was asked a question by Satish (my colleague) regarding inflation in a different manner. Here it is:
What if the prices increases to Rs.1200 according to your example in the next ten months?
I told him I had not thought about this scenario and today I did a research on this and thought let me post my findings for his benefit and others who might have thought about it and did not share with me. The electronic gadgets prices fall and don’t generally raise over a period of six months. Since the technology changes every six months to one year and the prices will decrease since there will no demand for old technology products. One of my friend bought a Television for Rs. 18,500 in Jun 2007 and the same Television costs now Rs. 15,400. I bought a Television for Rs. 22k in March 2003 and the same costs just Rs. 9k now. I have not come across a scenario when the prices of old technology electronic gadgets sold at a premium.
And one other colleague said “It might be necessary for now to buy, later you may not require it or it will be of little use to you, so it is better if we buy it at the right time than save up and buy later”
I don’t buy this argument. If something is required to you now and not needed later then such a thing is just a waste to you and you are buying a product that you don’t actually need it. Electronic gadgets life is just 6 months to 1 year. I feel that the computers we buy are God for the first year and then some how it becomes Dog after that. The rate at which the technology is changing I feel that it is better to save up and buy since you might get a good deal on it and a better technology product. Moreover I don’t believe in just buying stuff just cause we want it. It should serve some purpose. Just for the fact that we can buy anything, we should not buy. It does not make sense to me now ( Got some gyan 🙂 ).
I know what I have done, I have bought gadgets that I have not used more than two months. So just think over it.
I will write more about Inflation in some time.