Gold new price & Dollar's weaknesses!!

If you really want to dive in, a good starting point that is fairly easy reading is:

http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986395/ref=pd_sim_b_2

While this is admittedly has an anti-Fed slant, it is an excellent explanation of the modern currency system. To get a balanced view, you can also read the following:

http://www.dallasfed.org/fed/understand.cfm

and this...

http://www.stlouisfed.org/inplainenglish/PDF/PlainEnglish.pdf

 

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Thanks, I'll see if they have the first book at my local barnes and noble and hope to pick it up....

 

I remember an afternoon many years ago under the guise of deer hunting my father and I having a discussion of many pointless topics while in the woods sitting on the trunk of a downed tree. My father said, “you know son, things are different now. Used to be a time when a family could take 40 acres and carve out an existence. You just can’t do it now – everything costs too much and 40 acres just will not produce enough income.”

My dad of course was reminiscing about the time of his youth – the 1920’s and 1930’s. I thought for a few moments before making my shocking response, “Dad you are wrong – I disagree – of course a family could live off 40 acres now – the same as they did when you were a kid. Granted you would be living in a 4 room shotgun house without electricity using a wood burning stove for cooking and heating. You’d have a chicken coop, a sow with a couple of sucklings, a small barn that housed your mule and milk cow, a couple of fruit trees, a 2-3 acre garden, smokehouse, root cellar and don’t forget about the outhouse. Then you could plant the remaining 30 acres in a cash crop – tobacco or cotton plowing your field using the mule; which also would be hitched to a wagon as transportation to town on Saturday afternoon. Like I said the same way they exsisted on 40 acres when you were a kid.”

 

Your example has a major flaw in the 40 X comparison. You were doing min wage work for $1.25 and min. wage now is $7.25... That is only 5.8 X more money today... can anyone list any items that have gone up a mere 5.8 times since this Ancient guy was a teenager:whistle:

 

Yes, my monthly cable bill!!

 

I agree completely. It is obvious that rising metal prices pretty much prove that inflation is far worse with fiat currencies relative to gold and silver. If fiat didn't make inflation worse than it was under the hard money standard, gold and silver prices would remain constant without regulation, which they clearly did not.

 

Doug, I agree with the majority of what you're saying. The problem is, it's far more vast with far more factors involved than anyone can realistically put together in a post here and solve the world's problems.

People can argue that the price of many technologies have gone way down. But one could also argue that the same technologies have added to everyone's financial burdens that older generations never had to deal with before. I don't know how to adequately factor that in.

We have insurance for everything now. I believe people pay far more in insurance for many more things than people ever used to in the past. Most of that money goes to waste. I pay 5 different insurance companies monthly.
In general, there's much more to pay for now than two generations ago. If life stayed as simple as the 1950s, but our pay increased to what it is now, we would all have it made. But that is not the case.

Now people have to make enough to support a family, pay the mortgage, a couple car payments (since the wife usually has to work too now), a multitude of other bills, (all the same and some that never existed 20 years ago), and oh BTW, maybe service an $80k school loan on the side, while still trying to live your life AND pay for the fun stuff, AND save for retirement AND save for the kids' college fund AND save for that emergency fund and on and on.... Just as an example.

You HAVE to make A LOT of money in 2009 to realistically accomplish all that and I'd say most people are not even coming close. They're simply not able to. There is no way the entire population of the U.S. can make 100k a year. There's no way every family can make even 60k a year. Or 40k.
So depending on what faction of society you want to look at, you can almost come to any conclusion you want.
Shadowstats puts real unemployment at 22% right now. Then you've got all the underemployed and lousy jobs out there.

Beyond that, a very small fraction can say their wages kept up and they've really got the world by the tail in 2009 when it comes down to it. I'd guess if you took an overall average, wages are lagging behind severely and have been for some time. You feel this is temporary. I don't think it is or will be. I don't believe the 21st century can be compared to the 20th century.

The federal minimum wage, as of July, is now (finally) up to $7.25 in the 21st century. (A laugh for sure.) Some people have to live on that! After taxes you're taking home $5.44 an hour. Keep in mind gas was over $4 a gallon barely a year ago.

The federal government says that amount is adequate for the year 2009. Is that REALLY adequate and will it be going up again in the next 10 years? I doubt it.

In 1999 I believe it was $5.15. At it's lowest point, I filled up my truck at 0.89 a gallon in Iowa. Gold was around $250 an ounce. A 20 oz Mt. Dew was about 0.75.

Now that minimum wage worker has been bumped up to $7.25. A mere 29% increase. Meanwhile, everything else has doubled, tripled or more.
Gas is steady at the GIFT of $2.50. Gold is $1,050 an ounce. The price of a candy bar went up about 3x. 20 oz dew is 1.69. Min. wage oughta be around 10.30 at LEAST to catch up to todays prices. But it probably won't budge for another 10 years.

For the rest of us, if you've been receiving a 3% raise steadily every year, you may or may not be breaking even! Probably not. Many go years with no raises at all before they maybe see that 3%. Well, you didn't catch up because you finally got a raise. They'll never catch up. Places aren't just going to hand out a double digit raise to allow people to break even for all the years they never got a raise.

 

People don't live within their means these days either, so that accounts for a lot of it. In the 50's people didn't have half a dozen credit cards maxed out. They paid cash for things. They didn't buy houses that cost ten times their yearly wages, or boats and four cars and quads, all on minimum wage. People are more irresponsible with their money now than they were in years past. So, it's not so much the rising costs of goods, or falling wages. It's poor financial planning. I know I'm in the minority, but I've always believed if I didn't have the cash to pay for it, I didn't get it, and I live by that every day. No credit card mafia to pay off here.
Guy~

 

I agree with you on the most part. Here's my take on things:


1) I've always been conservative, and fiscally responsible. I don't know why, it's just been the way I am ever since I was little, no one really instilled it on me. It just seemed common sense. I only own 2 credit cards. I'd love to own just one, but I think it's smart to have two for emergency purposes.
Anyways, neither CC has any debt on them. I use mainly 1 credit card for all of my transactions because they are paid off every month. Not 1 cent left for them to collect interest on. It makes life easier using a CC.
You also get protection from purchases, as well as cash back rewards. It's a win win situation for people like me.

When I hear constantly on the news about the average person owing $8,000 - $10,000 in CC debt. I have an extremely hard time understanding how anyone can let it get out of hand. It just seems so illogical to me. Of course, you'll then have those super sad stories of people with $60,000 in CC debt. From what credit card to another, a revolving door of debt!!!


2) The bankers KNEW that people can't control themselves. It's human nature for the mass to over spend, and over buy. Easy cheap credit is basically a drug for the consumer. And the majority of people fell for it, hook line and sinker. At some point they knew that things would get out of control, and guess what, who gets the bailout? Not us...but the bankers!!!

So why NOT lend out your credit to people, collect what you can, ruin people's FICO scores, because at the end, YOU(the banker) will get the bailout, you will get your money either way...


3) If the majority of the people were financially intelligent, it would be heck of a lot easier to pay for bills. BUT, I have to admit, even I shake my head at all the expenses that are out there. My cable bill alone is $125 a month. It's the triple play plan internet/cable/TV. And it's the most basic plan as well. No movie channels, nothing special.
My cell phone bill hovers $85-100 a month. Again, nothing special either. I pay an extra $5 for txt message "privileges".

So anyways, back to the point, prices have gone up. Typical run to the grocery store is not cheap anymore. So I can only imagine how anyone can pay the bills that I pay(and more), trying to "live", while having major CC debt. It's almost an impossible task...

And these are the LAST people to even be thinking about buying gold/silver to hedge against inflation/preserve purchasing power.

Not only is it not in their way of thinking, it's just not financially feasible...

 

True. I think those people are a majority of those selling right now.
Guy~

 

Yes they are. They are the people who bought gold for various reasons throughout their years. They don't understand what is going on, and can only see the "green" that they can get and use TODAY.

They are financially illiterate, and the system plays them over and over again.

 

I highly recommend either the book or the DVD "Maxed out", as it explains in non legalese how the unsecured debts such as credit cards and other bank misadventures can be reduced or eliminated. There is a very good reason why a bank will mediate with someone to get as little as 1/3 of the debt. There are also good reasons for a CC debtor to not initiate the mediation, as that acknowledges the debt and resets the states statue of limitations on suit. If you have more credit card debt than reserves, it will be worth the time. Like with coins, Buy the book first. I am not a lawyer or financial advisor, so consult one if interested. IMO.

Jim

 

Thanks Jim, that sounds like a good weekend thing to watch. I've done more than enough reading lately so I wouldn't mind shutting the brain down a bit and watching this on TV.


Maybe I can find this on youtube....

 

I have to agree with dct that your response is statistically inaccurate. The only way to properly measure whether wages have kept pace with prices would be to measure like vs like. Even if there was no inflation, one would expect that a kid with limited skills would earn less than an adult in their most productive years. The only proper measurement is to measure mininum vs minimum or peak vs peak.

 

Dear Digg:

Here is a thought or rebuttle. edited Now lets pretend you have, say, four (or some other amount) One Ounce Gold Eagles, and you approach a doctor and offer to barter for say, a non-taxable, non-recordable, non-disclosed, exchange of goods which includes a Hip Replacement Operation and recovery/recuperation services. How does this sound for a use for gold coins? Anything is possible during times which are coming.

 

The doctor has to pay for the hospital expenses, the hip device, the anesthesiologist, nurses, follow up care, etc. AND risk his license and career over income tax evasion? I think he would tell you to sell the gold, pay him in cash at a higher rate due to financial and medical inflation, and he gets more than just taking the gold and risking blackmail from you, and you have to sell the gold and come up with more cash in the end. JMHO.

Jim

 

Some doctors have been known to have their own medical facilities or be in cahoots with such operators and even do unethical or acts that the authorities would find unlawful. The world is full of such people but I did not think about blackmailing them. Good idea.