In the 1920s, Walter Knott, a struggling farmer, revived several nearly dead berry plants on his Buena Park, California farm. Unbeknownst to him, this would mark the beginning of a remarkable transformation.
These remarkable plants were developed by horticulturist Rudolph Boysen, who crossed blackberries, red raspberries, and loganberries to create the hybrid boysenberry. Named in Boysen’s honor, these luscious berries soon became a sensation, and the Knott family began selling them, along with preserves and pies, at a roadside stand along State Route 39.
About ten years later, Walter’s wife, Cordelia, started serving homemade fried chicken dinners. To everyone’s surprise, this soon blossomed into a highly popular restaurant, attracting long lines of eager diners.
Knott understood the adage, ‘if you can get them to stop, you can get them to shop.’ Before long, he added various specialty shops to keep visitors entertained as they waited for their meals. These shops quickly became major attractions, drawing in even more tourists.
But Knott’s ambitions didn’t stop there. He expanded his offerings to include a replica Ghost Town, a train ride, and other entertainment options. In just a few years, Knott transformed his humble farm into America’s very first theme park.
A 2,614 Percent Increase
Recently, we spent a day at Knott’s Berry Farm with family, relishing the flavors of boysenberry while enjoying the sights. We wandered through the ghost town, explored the leather and wood shops, and took thrilling rides on the Calico Railroad, Timber Mountain Log Ride, and the stagecoach. The highlight was undoubtedly dinner at Mrs. Knott’s Chicken Dinner Restaurant.
We were fortunate to share a meal, and it was truly massive. Our feast included chicken noodle soup, a fresh green salad, fluffy buttermilk biscuits with boysenberry jam, crispy fried chicken, creamy mashed potatoes, savory chicken gravy, vegetables, and, naturally, boysenberry pie. All of this was priced at just $16.99 – a fantastic deal, wouldn’t you say?
In 2013, $16.99 felt like a bargain for such a hearty meal. Yet, when Mrs. Knott first served her fried chicken in June 1934, the price was only $0.65. This indicates that the same meal now costs a staggering 2,614 percent more. But is it truly 2,614 percent better?
We cannot answer that since we weren’t there to taste it. However, our intuition suggests that the quality, taste, and value of the meal likely haven’t changed much over the decades.
Clearly, something significant has unfolded over the past 79 years…
Mrs. Knott’s Chicken Dinner Inflation Instruction
Using the Bureau of Labor Statistics’ inflation calculator, we find that $0.65 in 1934 holds the same purchasing power as $11.33 in 2013. This revelation leads us to several conclusions…
First, the Bureau of Labor Statistics may underestimate inflation rates. Second, the cost of producing a chicken dinner in 2013 is higher in inflation-adjusted terms due to the numerous regulations that restaurants must adhere to.
Health codes, minimum wage laws, county food safety inspections, and payroll deductions for Social Security and Medicare increase operational costs. Ultimately, these expenses are passed down to consumers, adding to the price burden.
The alarming truth is that it now takes anywhere from $11.33 to $16.99 to purchase what $0.65 could secure in 1934. The loss of purchasing power is staggering. What could be causing this persistent trend?
The reality is we are witnessing rampant money debasement. The primary driver of this phenomenon lies in the collaboration between fiscal policies and monetary policies executed by the Treasury and Federal Reserve. This partnership enables the Federal Reserve to create money out of thin air to purchase newly issued Treasury securities, leading to a continuous increase in the money supply and persistent government debt. Consequently, this diminishes the value of the dollar.
It is imperative for every diligent individual to recognize these policies of mass money debasement and take proactive measures in response. Relying on long-term wealth preservation through bank savings is pointless. Instead, taking inspiration from Mrs. Knott’s Chicken Dinner Restaurant, offering quality meals can be an effective strategy to safeguard savings and build wealth amidst ongoing inflation.
Sincerely,
MN Gordon
for Economic Prism
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