A lovely editorial comment on Coinflation...

I just spotted this link on Coinflation's news section:

John Embry: Hold Onto Gold As ‘Currency Event’ Likely

The hover-text, where Coinflation editorializes on its links, says:

Given the frequent "Buy PMs, The Sky Is Falling" orientation of Coinflation's editorial links and comments, this seems like quite a slap at Sprott...

 

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Nice. Surprised to see that from Coinflation, they are usually cheerleaders of these writers.

I wrote a comment to the article posted yesterday about "The case for separation of Government and Money". It was written by Heller, the same writer that caused me to cancel my NN subscription. You can probably guess which comment was mine.

 

The currency event has been ongoing for the last 101 years since the inception of the Federal Reserve and its funny money. The dollar has lost roughly 98-99% of its value since 1913.

 

Whenever you read a joker like Sprott or Ron Paul trot this tired old half truth, you need to understand they are just playing you. Of course this is technically true, but it is not a bad thing at all, and those clowns know it. The truth is while the dollar has dropped in value, wages have risen 6500% during that same period, easily whooping inflation. In fact the buying power of the average American family has increaesd a whopping 230% over the time period you mention. I guess Sprott forgot to tell his marks that.

 

Average doesn't mean anything, income is a skewed distribution

 

True, but so is intelligence ( both street and testable ) height, ambition, athletic ability, and almost anything else in the human condition. None of these , income included, will ever be the same for every one, so one has to cope with it. Sad to say, but life isn't fair to everyone, just average.

 

You don't understand what I'm saying, average income is not a comparable measure of a distribution that is not normally distributed. It tells you absolutely nothing without knowing other aspects of the distribution. Now median, on the other hand.

 

Ok, so how exactly does this relate back to the fact that for the vast majority of Americans today have MUCH more purchasing than their 1913 counterparts despite the inflation. Are you disagreeing with that statement?

 

CAN something happen and WILL something happen are two different things. Sometimes I think the PM people look at the CAN and dream of the WILL. Preparing but hoping it doesn't happen is one thing....over preparing and then counting the minutues is another thing. I am new to PM. I will never be the guy that is looking for unique errors on coins or some coin with a low mintage. I want PM. I want appealing designs. I want to hold past history or I want to hold a modern that two generations out will be able to hold past history. PM is wealth insurance. Plain and simple. Just like insurance you hope to never have to use it. PM is your insurance and part of your families legacy. In 500 years every generation in your family should enjoy life...put aside something....leave the earth and at the end of the day there should be the stack of all stacks.

 

You made a claim, stated some statistics to support your claim, however those statistics do not support your claim without more information. The statistics are rather irrelevant the way they are presented. I suspect your claim is true but not nearly to the extent that your statistics would imply.

 

The longest time frame that I could find that uses a more relevant statistic is 1967-2012 from the census bureau. They report by quintile.

https://www.census.gov/hhes/www/income/data/historical/household/

Inflation adjusted, the lowest quintile increased 14%, the second lowest 13%, the third quintile 29%,, the fourth quintile 46%, and the top 5% increased 67%.

 

Why did you skip the top quintile, reporting instead only the top 5%?

I'd go back and look at your sources myself, but that page links to a few dozen large downloadable spreadsheets, and I don't have time at the moment to figure out which one you're drawing from...

 

Those number are for the break point in the quintiles; 20%, 40%, 60%, and 80% not the average in the quintiles. Once again, because withing each quintile the distribution is skewed and an average within the quintile would be meaningless without the rest of the shape of the distribution. I added the 5% because the census added information for the 5%.

 

Hmm. I figured "quintiles" meant there were five of them, and we were discussing averages (or some other statistical marker) for each of the five. The 5% figure is interesting, of course.

Did you draw from one of the spreadsheets linked on that page, or did you pull information from several? (I'd like to take a look if I have time tonight, but I'd like to know where to look first...)

 

How can you write "easily whopping inflation" if you don't give a number of how much the dollar has dropped in value....There's a huge difference between loosing 99% or 98%....if it's 99% you would be wrong and at 98% it would hardly be a "whopping".

 

You are incorrect, first off it was not me that said 98 or 99%, that was Tinpot. The actual accepted figure for the last 100 years is 96%. Now the average US salary was around $750 in 1913 which translates into roughly $20000 in 2014 dollars. The average US salary today, is around $49000. So without a doubt wage increases have absolutely trounced dollar depreciation. The spiel from the bullion pushers about the absolute HORROR about the disappearing dollar just doesn't hold water, but hey they are salesmen so what do you expect.

 

Since we're in the bullion section, let's look at your example when using actual money that was used then, gold. That gold quarter eagle was worth $2.50 back then, and today is $160 (round math). That is 64 times, and if you multiply the average salary of $750, you come right up to that magic number you produced, $48,000.

 

So does that prove paper money is just as usable as pm? If they pay you the same value today as "the time they used real money", (whatever the heck that means), then we have lost nothing by our coins not being pm?

 

Nah, it kind of proves that just about anybody could find a simple counter argument to just about anything. Whatever...believe what you want to believe, I'm not interested in running other peoples lives...there's enough on my plate running mine...

 

According to the US Census Bureau for 2011:
"50 percent of US wage earners made less than or equal to the median wage, estimate to be $26,965" - according to another site for 2013 Avg. Individual Income: $26,364