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MARKETPLACE
NEWSLETTER
PAGE 8, MAY 30, 1973
What Price Dollar
in5Years?
Even the most conservative of money economists foresee a very battered American
dollar in 5 years. The loss they foresee ranges from 25% to better than 27% in the
dollar's value by 1978. Remember, these are the calculations of the conservative
economists. Some of the embittered economists, basing themselves on a minimum of 6%
inflation per year, foresee a purchasing power value loss to the U.S. dollar of 3c:!fo
and more .
Based on the figures of the more conservative money economists and the fact that,
compared to the 1939 dollar which fell to 100 cents in purchasing power value, the
purchasing power value of today's dollar is computed to be 20¢. Since there's no end
in sight for inflati on in the next 5 years, and based on the most conservative projec-
tion, that the dollar will lose 25% in purchasing power value, the 1978 dollar will
be worth just 15¢.
This means, forgetting the Penny entirely, the Nickel will be worth 3/4 of 1¢, the
Dime will be worth 1 1/2¢ and the Quarter will be worth 3 3/4¢ in purchasing power
value in 1978. To get some idea of just wha t this means in cost of products, a new
1973 $30 , 000 home will cost $40,000 in 1978, cigarets that now cost 47¢ a pack will
cost 61¢ a pack, a man's suit that sells for $80 today will sell for $100, a pair of
man 's shoes that today cost $25 will cost $31, 40¢ bus fare wil l go up to 50¢ .
This means today's $500 coin machine will cost $625 in 1978. Similarly today ' s
$1 ,000 coin machine will sell for $1,250 in 1978. So that taking in dollars worth
25% less, worth only 15¢ in purchasing power value, paying out 25% more for new
equip't, parts, supplies and all overhead expenses, the year 1978, j us t 5 years away,
will truly present a challenge to every operator then in business. This is bound to
be the year that will separate the men from the boys. Who knows how many full time
operators will be in existence? This may become a moonlighting business in 1978.
Of course, and also to be taken into consideration, is the premise that in 1978
people will use Quarters like they use Nickels today. If that becomes fact then
today's Penny peanut and ball gum machines will vend with Dime chutes. Juke boxes will
feature "1 Play 25¢", "5 Plays $1" and, perha~s , "12 Plays $2". Top games of 1978 will
have to be set at "1 Play 50¢", that ' s only 7t¢ per play. Coffee and candy bars will
vend at 25¢. The antique 50/50 commission basis will be long gone. Perhaps 2c:!fo, more
than likely, 1c:!fo or 15% commission will be paid to locations.
so that when "Marketplace" urges today ' s operators to step up to "1-Play 2-Bits"
plus a $10,"service charge" and split the balance on the more equitable 70/30 comm-
ission basis, may be considered, in 1978, as "the good old days when an operator
could still make a buck", (What do you think?)