Dollar Devaluation

What is this assumption that we are having or are even likely to have high or hyperinflation soon? The inflation rate for 2010 will most likely be as low as any in the last 10 years except for last year. Many find this hard to believe, but if a person is basing their buying and living style on this, they have a good chance of losing. Yes, I will accept it is possible, but the probability seems unlikely IMO. Check this URL or similar.

http://www.usinflationcalculator.com/inflation/current-inflation-rates/

Jim

 

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I suppose it's a little late in the discussion to point out that money isn't worth anything in itself. It's a notational index - a way for people to tell one another how much things are worth.

In the past, this function was generally accomplished by using money that also had a specific commodity value. Even then, (almost) nobody wanted the commodity the money represented; they wanted the things they could get with money.

It really doesn't matter how the notional value of a "dollar" has changed over time, so comparison of a 1913 "dollar" to a 2010 "dollar" is the proverbial argument over apples and oranges. A "dollar" then was "worth more", but it also took more to get one. Not to mention that a "dollar" today can be used to buy things no amount of "dollars" could buy in 1913. Air conditioning, computers, iPods, big screen TVs, antibiotics, weekends in Paris, etc. etc.

 

Minimum wage
72-$1.60
'78-$2.65
'82-$3.35
'85-$3.35
'93-$4.25
'95-$4.25
'00-$5.15

New Car vs. minimum wage.
1800/1.60=1125
5500/2.65=2075
12000/3.35=3582
14000/3.35=4179
10000/4.25=2352
19000/4.25=4470
21000/5.15=4077

For giggles, 2011 Buick Enclave ~$35000
Minimum wage $7.25
35000/7.25=4827

I haven't been making as many posts here as I used to. Honestly, I'm not very happy with this site. It is obvious to me that the people who come and post here aren't concerned with inflation. They aren't concerned with minimum wage. Nor are the concerned about the poor economic state of our nation.

It is becoming obvious to me that people here are part of the haves. All they care about is that they're taxes aren't increased, they can buy air conditioners, TVs, and trips to Paris.

Maybe I am a troll, hiding under a bridge, you darn billy goats. But I'm not the only one. I'm starting to think that some of the trolls here work for banks or are heavily invested in the stock market. I don't need to name any names, as Jesus said, you will know them by their fruits.

I'm sorry to say that this is goodbye. I hope that people can and did learn something from my posts. And it might be asking a little too much, but I hope that they can find it in their hearts to care a little. Care about the poor man that is being evicted, because he lost his job no fault of his own. Care about the people who have to go to soup kitchens to feed their kids at the end of the day. Care about the state of our national debt and if they don't want to pass this debt on to their grandchildren, will find it in their hearts to be agreeable to have their taxes raised.

Truth is, the wealth in the U.S. is more unbalanced than it is in many places we call banana republics. And what caused this disparity, the lowering of taxes. Call it socialist, but taxes are supposed to take away from the haves that have too much and give to the have nots, when they need it. We all know that consumer spending is what drives our economy, 90% of the population owns only 10% of the wealth. And the bottom %50, have no wealth at all, they are indebted.

God bless and Merry Christmas, you scrooges!

 

Back at the turn of the century (circa 1900) a rifle cost about 8 dollars. A laborer had to work at least a week to earn the money to buy that rifle. Take a laborer of today and he/she has to work about the same amount to buy the same quality of craftsmanship rifle. Putting purchasing power into context of manhours per purchased item, we aren't far off from "way back when".

As far as taxes are concerned, the government was not initially designed to be the creator of jobs, provide had outs, etc. It was to create a union of individual colonies whose sum total strength would be greater than if allowed to be individual countries. Government has become an over fed pig that needs to go on a diet and stop trying to legislate everything in our lives. Ronald Reagan and other prior presidents felt that the government was spreading it's tentacles were it shouldn't.

Not only should we be concerned with the government's debt but also our trade deficit-especially with China. If people are serious about making the dollar strong again, quit buying products without first finding the country of origin. Shame on Whitman and others for having an "American" product made in China! I myself am willing to spend more for an american made product if it meets or exceeds the quality of a comparable product from the far east.

 

To the extent I'm one of the "haves", it's as a result of my own efforts. Not only did I come from humble origins, but today I help support my elderly parents.

I do feel compassion for those of lesser means, and I do support things like health care reform so that being poor doesn't mean having to go without. Still, I feel entitled to the fruits of my labors, and have no apologies for that.

 

Buying bullion.

I hate HATE hate the inflation tax. HATE IT. This makes me madder than anything.

Now, I just need the dollar to strengthen for a little bit to drive metals down so I can swoop in and BAM! LOAD UP THE TRUCK, BAY-BEEE!

 

No. The US didn't go off the gold standard in 1933, it went off the gold standard in 1971. People weren't allowed to own bullion between 1933 and 1975 is all.

 

Well, I think you make some good, informative and thought provoking posts in these forums and it's a shame to loose a member like you here but only you know where you should be spending your time.

Goodbye SS. I hope you find what you are looking for and that you will be happy in your quest. Peace.

Regards... krispy

 

In 1933, the dollar was devalued, Gold ownership illegal, etc. From $20 and oz to $35 an oz.
In 1971, the nail in the coffin was nailed by Nixon when he let the dollar go free. Welcome to the fiat standard.

 

This is a bullion investing site, not a political site, so your dissatisfaction makes sense. Good luck to you.

 

Not exactly correct. When the country was founded the dollar was officially defined in terms of being equal to a set amount of silver, or gold for higher denomination coins. With few exceptions this definition pretty much stood until 1914 when the Federal Reserve Note was introduced. At that time however a FRN could be exchanged for a gold or silver dollar at face value so it was held at bay.

This all changed in 1933 when FDR issued an executive order that required people to turn in their gold dollars, gold certificates to their nearest Federal Reserve bank who would give them back a $20 FRN for each ounce of gold. FDR then took the gold that he got at $20/oz, had the US Treasury produce US gold certificates, and these where then given to the Federal Reserve at the rate of $35/ounce. FDR used this "profit" to fund his programs. This is when the historic break began when the dollar was defined in terms of precious metal. However they still had two problems which would take another few decades to sort out. There were still silver money out there and internationally currencies were still redeemed in gold.

So until the late 1960s, people could still take their silver certificate dollars to the bank and demand a set amount of silver. However at this point FRN printing was already out of control and they could no longer allow these conversions. This led to the removal of silver from most coinage in 1965 and a cancellation of the redeemability of silver certificate dollars in 1968. In the days leading up to this cancellation there were long lines of people waiting to exchange their paper silver certificate dollars for the real stuff.

The last window to be closed was the gold redeemability by foreign governments that held dollars. France started it as there was a huge trade surplus and started ordering the conversions. There are stories of tons of gold being shipped from Ft. Knox (the same gold taken from the people in the 1930s) to NY which were placed on planes and flown to Europe. It eventually go to the point where governments were sending ships to collect the gold when Nixon closed the window without warning. One of his finance secretaries very famously said (it was directed to France) "It's our currency, but your problem". Legally it was the first bankruptcy of the US. This was also the time, 1971, the US Treasury stopped circulating US Bank Note dollars because it created an additional legal paradox which I won't get into.

From 1971 on, the US $ was now completely fiat. It was the first time in close to 200 years of US history and we entered uncharted waters. The end result close to 40 years later is that 98% of current US debt was generated during this period and it is accelerating. Fiat currencies have a fundamental flaw, interest, that mathematically can't be fixed and thus Central Banks are forced to introduce inflation to cover it. But this is only a bandaid and eventually this bandaid causes a collapse.

 

Vroomer was exactly correct. It's just that he wrote the Cliff's Notes version and you wrote the Illiad.

 

Wow, bad job report and all and the DOW is up, not to say precious metals also.

 

You are offering an opinion of course. I stand by what I posted.

 

With many other economic metrics indicating growth, a consensus developed among investors late in the day that the employment report was anomalous and subject to upward revision next month.

 

Silver was eliminated from largely eliminated from coinage in 1964 for one reason - cost. As the intrinsic value 90% silver coins approached their face value, it became obvious that their content would have to change, because hoarding would soon begin. Negative seigniorage plus ever diminishing circulation = critical problem.

There were occasions in the 19th Century when gold coins disappeared from circulation because their intrinsic value exceeded their face value. Coins of all types disappeared from circulation when the Civil War started. A gold standard is no guarantee that the coinage's value will remain stable.

United States Notes ceased being printed in 1971 because the Treasury finally got Congress to repeal a Civil War era law mandating around $180 million worth of such notes to be maintained in circulation. The reason for this was simply efficiency - USNs were the only notes other than FRNs then being actively circulated. The mandated amount was negligible compared to the overall money supply, and it was expensive to keep separate books on the relatively few USNs, not to mention separate manufacturing, storage and destruction of worn notes.

After the elimination of gold from circulation in 1933, USNs had the very same backing as FRNs (redeemable on demand for "lawful money"), and therefore they presented no other difficulties. No need to conjure up dark conspiracies to explain their retirement.

 

Nope. Re-read what I posted. Silver was removed from the coinage because the federal reserve notes in circulation were being over printed to the point their value VS silver coins dropped.

Remember, for over 100 years, the dollar was defined in terms of weight of silver. This never changed. It's only when they redefined the dollar to the value of nothing that they were forced to remove PMs from the currency. It's gotten so bad now, they can't even afford to put zinc in pennies and they are looking for something else to replace it.

 

I give congress credit that they did not roll over when the executive branch wanted the discretion to change the metallic content of our nations coinage.

 

I don't need to reread what you wrote to know you're wrong. The value of coins in circulation in 1964 was a tiny fraction of the money supply. There was never a possibility of exchanging all FRNs in circulation for silver coins; after 1933 FRNs were not guaranteed redeemable for silver coins anyway, but only for "lawful money".

You, like so many others, are confused about what money is for. It's a medium of exchange, a way for people to tell each other what things are worth. It is not supposed to be a store of value. If you want to buy something like gold and silver in the hopes you'll make a profit, feel free. If you stuff your mattress with dollar bills, don't be surprised if you discover later you made a bad decision. Dollars are for spending.