What the hell happened to the price of cigarettes?! They were $5 a pack when I quit 10 years ago.

How come a 2014 Z is $10,000 more than a 2004?! How crazy is Nissan!! Nobody would pay that.

You know the #5 with w Wild Cherry Pepsi was $3.99 at the Bell a decade ago, and it's $5.99 now!!! Did the price of beans go thru the roof or something? What am I missing?!

If it keeps up this way they'll want to do something really crazy, like raise the minimum wage to $10!! I wonder how much everything will cost when they have to pay $10 for $5 work!!

What's the world coming to. 8O

 

Ok besides your sarcasm, I get it, prices are increasing.

Care to share, mr. ever-so-knowledgeable as to the causes of the prices increasing?

Clearly, it happens naturally, but also, as we know, the economy of the US is seeing a "hit" of the likes not seen previously before, as the dollar continues to degrade in value.

Also, unemployment skyrocketing.

So, any opinions Mr. Rich regarding the increasing cost of living and goods, yet lower pay, destruction of the middle class, and degrading American dollar/crumbling economic system?

 

The UK magazine 'guitarist' did a little feature on this two or three years ago taking the Strat and the Les Paul I think it was and measuring them against a pint of beer and a loaf of bread. All things being equal they were roughly the same relative price as they were 25years ago...

 

Where is the simpsons "old man yells at cloud" when you need it?

 

Oh boy. Here we go again. Everything costs more and these damn kids are always walking on my lawn.

 

I shouldn't but I'll bite. I think that a lot has to do with exchange rate. The average exchange rate was 115.6 $/Y in 1/06 and 104.3 in 1/14 (about 10%), but any international company would have to forecast exchange rate based on historical data.

The dollar was very strong vs the yen for several years leading up to 2006 and has been extremely weak the last few years, only recently gaining momentum. This should mean that the exchange factor would account for more than 10%, possibly significantly more.

I also think that the Jem is a poor example because it's a signature model. The Jem has had a significant price increase, even when factoring in inflation and exchange rates.

2006 JEM7VWH - $2800 list, $1800 MAP?
2014 JEM7VWH - $4000 list, $3000 MAP

That's about a 43% increase in list and 67% increase in MAP. That's a lot.

But if you think that's expensive, look at the price lists for some early 90's Jems. The current guitars are downright reasonable by comparison.

 

I remember people freaking out when gas was was rounding a dollar. : )

 

Original 1959 Les Paul price $265.-- Case $14.25

2012 A les Paul from 1959 w/ orig. case approx. $750,000.--

:mrgreen:

 

Guitars are a luxury market.
Companies and people can charge as much as they think buyers will pay.

If the economy gets better and people start buy more guitars, the prices go up.

 

Besides the standard economic forces, that too!

It's not vegetables, underwear, tin foil, water, or electricity or something somebody needs. The guitar companies can do as they please and not get that much backlash because it's a luxury and non-essential item.

When you have something like that certain sexy black Prestige RG, or Fender Stratocaster, or Gibson Les Paul, then you know there's always a built in player who will get what they want and won't mind paying too much for it. If all I want is a certain 7 string RG made in Japan, I may not be pleased by a Jackson just as good or even an equivalently equipped 7 string Ibanez S Prestige. For the high end, the companies who have a known entity, like mentioned above, or others like Orange 6120, Rickenbacker 330 old style, or Kirk Hammett MII road worn signature, they will always know that they have the upper hand and the consumer has little power in changing the price point.

Of course if you go way too high then it could make a player reconsider a different guitar. I remember when I wanted a certain period vintage Telecaster and I was willing to overlook other Telecasters which were basically much better guitars but upon getting ultra specific in what I wanted then I knew the market had the advantage. I would have even been wiling to pay a good 50% percent more than it was worth.

A good example of inflated prices, and people willing to pay almost anything are is rarified original Tube Screamer. Many other reissues can get a sound worthy of what one needs, but the original has not only the sound and the look, but the prestige of being the tube screamer/overdrive a whole industry is based upon. Ten years from now, there will probably be a person who buys an original tube screamer for what a nice used car goes for. There are certainly new Ibanezes in the higher end, with no real indication of scarcity or discontinuation, which can bring in vintage guitar like prices. I am sure there are a few players here who help support the reason Ibanez can give for keeping a certain list price artificially high. If the demand is there, and there are some who won't play Ibanezes not made in Japan, then there's no pressure for Ibanez Japan to change their pricing structure.

What level of high prices is due to economic pressures versus built in fanatics is hard to tell for the MIJ Ibanez guitars. Being probably the third most popular guitar behind Fender/Squier and Gibson/Epiphone, I am sure Ibanez will always find buyers for the stupidly expensive stuff like J Custom and Jem EVOs.

 

I haven't sat down and looked at the math in a couple years, but last I checked, most of the increase in price in high end Ibanez guitars could be attributable to the combination of 1.) core inflation in the US (the price of everything increasing), and 2.) the US Dollar weakening relative to the Japanese yen.

It's possible something else has happened since then, but on an inflation-adjusted, exchange-adjusted basis prices were essentially static last time I looked.

 

This!
All one has to do is enter $100 in an inflation calculator and compare 2008 to now and see how much that $100 is worth. Without stirring a political discussion, this is what happens when you print money to pay for stimulus.
Then there's the yen going from 120 = $1 in 2007 to 78 = $1 in the worst part of the recession. USD/JPY has been one of my personal indicators over the last five years (not to mention my personal interest in Japanese guitars. ) and it currently sits at 101.36 to $1. You'll notice the Ibanez Prestige line has come down in price (for RG's anyway). I'm honestly amazed they came down as much as they did so fast. A company will only lower prices when they absolutely have to in the face of competition.
There's also probably a lot of other factors too. Is rosewood harder and more expensive to come by? Or other parts? Or mahogany? Pickups have also recently gone up in price. Copper has plunged but what about aluminum, nickle, or cobalt? (AlNiCo)
Lastly, a guitar company (or any company really) is free to charge whatever they want for a product. It's the market that decides if that price is acceptable or not.

And Rich, the answer to your health insurance question is twofold I think.
1. Healthy people need to cover the cost of the sick. (Or aged. We all use a lot of health care before the end. And there are a LOT of Baby Boomers!)
2. When you make someone buy something and don't give them the option to decline then then it's like ringing the dinner bell to the insurance companies. They can charge what they want.
(I would again encourage anyone to refrain from making this a political discussion. You can always PM me if you think I'm out to lunch. )

Also I paid $750 for my RG1570 in 2007; hardshell case included. The USD/JPY rate then was about 123 = $1 then. It's not necessarily that the guitar got cheaper over time. The value of the dollar and the yen comes into play in their relationship.

 

Where do they build a Lexus?!

Toyota builds a Camry in the US and Nissan builds something here, everything else is built in Japan.

I know why my health care goes up, I'm just being sarcastic

 

My next car will definitely be Japanese, wherever it's built. Japan has made a great name for themselves dominating the auto industry. While Japan's guitars are every bit as good and reliable, I don't know why Gibson and Fender are really any competition to Ibanez.

I have owned many Gibsons and Fenders, and love them to death, but since the mid-70s until now, neither company has been able to hold a candle to Ibanez. Keyboard players know about Yamaha and Roland, acoustic guitar players on stage know about Takamine, horn players everywhere know about Yamaha, but I wonder why the guitar world isn't completely dominated by Ibanez, ESP, Yamaha, and Aria. Too many guitar players are still more than happy with an overweight Les Paul with a baseball neck and high action and take that over a much nicer Japanese guitar.

 

Buy used -- problem solved!

 

I still don't understand why this discussion is based around a Jem? The pricing of a Jem has nothing to do with typical pricing. Why aren't we talking about the new 2014 Prestige RG's? Those have totally reasonable and quality-wise are everything a Jem is.

 

A 655 is more than double what a 1570 was a decade ago. But I'm betting my health insurance has doubled also 8O

 

List of MAP? At $1599 List/$1199 MAP, I wonder how good a deal it is compared to a '94 RG550 at $899 List?

 

I have them as List

http://www.ibanezrules.com/namm/2004/rg_prestige.htm

List on a VWH same year $2400.

 

OK that's pretty obscene. That's the same as the 1990-92 RG570 list price, so effectively the guitar got cheaper over time. No wonder they sold so many 1570's.

 

The dollar is losing it's value thanks to printing more and more money. Thus, it's worth less. Thus, everything made outside of the US costs more. It's really that simple.

 

No, it's really not that simple, despite what Fox News is telling you. The dollar gained about 36% in value against the Yen from the beginning of 2012 to the beginning of 2014, despite the Fed supposedly "printing money" that entire time.

Saying that the Fed is "printing money" is a gross oversimplification of monetary policy aimed solely at inciting a pliable audience against the current administration.

Exchange rate plays a factor in the price of any imported good, but so do the goals of the guitar manufacturer. The goal of most corporations is to increase operating margins every year. There are both internal and external ways to do this, but the most obvious external way to do it is to raise their margins on the products they sell.

Rich just showed that the price of a guitar in 2004 was the same as the price of the same guitar in 1990-92. Accounting for inflation, it would appear that Ibanez had actually become significantly less profitable over time. We have no way of knowing what's been going on since then, but it appears pretty obvious that they're trying to increase profitability back to more historical levels.

 

Hospitals can't charge what the want... Insurance carriers dictate terms of care (cost and what is covered) since there are fee-schedules for every service. OTOH insurance carriers can charge/pay what they want and deny care for what they want. Anyways linked below is a highly recommended read from one of the brightest tech guys in a long time that touches on these subjects while being non-political. Highly recommended:
http://www.rollingstone.com/culture/news/bill-gates-the-rolling-stone-interview-20140313

 

That is a great article. Thanks!

 

IMO all one has to do is look at a graph of per capita public debt in the US. It's relatively flat until the mid 80's when Reagan lowered taxes and started us borrowing at an incredible clip; i.e deficit spending. It was a sound strategy in the short-term as it helped do in the USSR but I think if he were alive today and saw how every president and congress has abused the idea since, regardless of party. He would regret having opened Pandora's Box I think.
No, this isn't a result of one man or one party or anything done in the last ten years. This is 30 years of bad ideas coming home to roost; and the bill is now passed to Gen X'ers and Millenials.
But that's my $0.02. If this is excessive the mods can delete.

The important thing to ask is why is one thing more expensive and another not. There are different explanations as to why guitars are expensive and why gasoline is or isn't expensive.

 

Economy rules leading our society, bad news for musicians and others.

 

*Core inflation* has dropped or remained flat, yes, but who can exist without food or energy in this world? I understand your argument, Drew, but I'm just running on my own perception as the guy who pays the bills every month. In my basket of goods things are more expensive. I'm fortunate in that my income has increased over the same amount of time. Many Americans, even those with education and skills, can't say the same unfortunately. Wages have remained stagnant over the last decade or so (maybe more) and maybe that helps in the low core inflation scheme of things but it's not good for the aggregate economy; as you pointed out I believe. (I'm trying hard not to appear partisan. I'm truly not partisan. Trust me! ) IMO there's a spider web for the reason things are the way they are and why we're skipping along the bottom GDP-wise. The thing that needs remedy the most, I think, is there needs to be much more pressure on wages upward. People need to go back to the higher-paying jobs they had before the recession; not the McJobs that replaced them.
And IMO it's interesting how this plays out into the price and quality of guitars. It's interesting that Ibanez is offering such awesome instruments like the RG655 and the RG752; giving the people what they want at a new lower price. You can also see the pressure for even lower prices on the regular Indo stuff. Certainly pressure downward.

 

Eh, what you're seeing isn't inflation, so much (or at least, very low inflation - all inflation metrics are low, core and otherwise) as much as a period of increasing income inequity. Wages in aggregate have grown over the last fifteen years, but much of that has been concentrated at the very top of the income scale, and median-and-below wages have either barely kept pace with inflation, or have lost ground on an inflation-adjusted basis. Whether or not you think this is a problem, in America at least, depends a lot on your political orientation - I certainly think it is, especially in an economy that is driven about 70% by consumer spending - but whatever it is it isn't the result of high inflation so much as low inflation but even lower wage growth.

Core inflation excludes food and energy not because the Fed wants to make some esoteric, fantasyland inflation metric that has nothing to do with our real-life experiences (which, I'll admit, the first time I heard that I thought it was an absurd thing to exclude too), but because food and energy are incredibly volatile and respond strongly to a lot of factors that have nothing to do with inflation. The price of food is probably more strongly correllated with the weather and the price of gasoline with geopolitical stability, respectively, than with inflation. Changes in food price have very little to do with the value of a dollar.

And again, anecdotally, if you look at labor trends you can see it playing out; employees are willing to turn to labor for low cost, low value added tasks, but as the cost of labor rises increasingly they're turning to labor substitutes by increasing productivity (either through expecting longer hours, which anecdotally has absolutely been my experience in the financial industry, or by investing in technology rather than making additional hires). The result is that while we're actually making progress chipping away at unemployment (and a factoid that doesn't get mentioned nearly enough by either party is that private-sector employment has actually surpassed pre-recession levels, and it's significant cuts to public spending employment that are continuing to keep the rate high), but far too many of the jobs being created are "low quality" ones that require low skillsets and pay low wages, as companies would rather hire another secretary and buy a new, more powerful research platform than hire another two lawyers, for example.).

Can you tell I love parentheses? :lol:

I think you're the winner :lol:

I'm glad SOMEONE here knows Econ 101

Would you believe I've never taken a Econ class in my life? Now, the CFA program, different story...

 

Strippers still take dollar bills so everything else is perspective.

 

Excellent point Cosmic!
Better than the Big Mac Index even!

Or maybe... wait for it... the Big Mack Index?

 

 

I think if the prices went up on Ibanez, it won't bother me if the other two major companies are relatively the same in proportion. For example Squier is cheaper than the regular RG which in turn is cheaper than American Standard Stratocaster which is cheaper than Prestige RG which is cheaper than Gibson Les Paul Standard which is cheaper than J Custom RG.

As long as these basic relationships stay that way, then it's as it was always from as far back as I can remember. If we are talking dollar for dollar the Squier Strat and basic RG win hands down for pure value and the J Custom stuff often ends up as collector's items (or as studio only gem) not used for regular hardcore gigging. Anymore I won't consider gigging with anything more expensive than regular Les Paul Standard.

Squier/Fender Standard Stratocaster online: $229
RG 421: $299
Am. Std. Stratocaster: $1,249
Prestige RG 3250: $1,799
Les Paul Standard: $2,942
Les Paul Standard Premium Flame: $3,399
J Custom RG 613: $4,499

Then there's the crazy expensive stuff we can all agree is overpriced:

Fender Gilmour Custom Shop Stratocaster with one of a kind appointments: $5,120
Ibanez EVO reliced to original: $7,777
Gibson Super 400: $12,998

 

I've always thought LP's were overpriced but that's my opinion.
This also brings up a good point in that the guitar manufacturer, and the retailer to some degree, can sell guitars for whatever the market will bear.
My personal sweet spot is $700-900 for a guitar. The RG5xx and RG15xx were great in that zone. That area is now Premium territory.