Dollar's Purchasing Power Annihilated - The Chart They Don't Want You to See 154 comments
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This is the chart they don't want you to see: the purchasing power of the dollar over the past 76 years has declined by 94%. And based on current monetary and fiscal policy, we have at least another 94% to go. The only question is whether this will be achieved in 76 months this time. (Click chart to enlarge.)
Hat tip Teddy
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This article has 154 comments:
As the Soviet experiment has shown us, official legalized fraud lead to a society collapse.
As for a US$ reserve currency, its status is already became questionable. The $120B Asian stabilization fund indicates that US$ became an exchange chip (like in a casino, chips are substitutes for real money) in the Asian region. It appear that this approach will spread to commodities trades. It should not be a surprise that, at some point, these "exchange chips" will start a decoupling process from US$.
On May 08 09:33 PM Living4Dividends wrote:
> TD - I'm glad you wrote that article - it shows investors the incredible
> destructive power of the printing press and inflation. I just wrote
> an article in a a similar vein on Seeking Alpha, titled "The Dollar
> Is Doomed" No fiat currency is a safe haven - but the dollar is the
> least safest of the majors.
The graph is a good example of the evolution that can be detrimental to the group USA! The USA group is the host at the present and the parasites and adjacent groups are both positive and negative forces. The evolution, a result of selective processing with migration based on the inputs of policies and managed force fields.
Leaders, managers and dictators want their piece of history so CHANGE is directed to promote one groups position and is often detrimental to the other group with aberrations that can destroy the host.
Our current administration is doing there part, is it improving our groups survival or position in the pond?
What was the methodology used for calculating the purchasing power? Correct me if I am wrong, but it appears that today we can buy a lot more carrots, bananas, autos and movie tickets than in '20s, even with unemployment benefits money. No?
Sure, when you compound it over many years it gets scary-looking, but for most of us, it's offset by the ~11% gains in the market -- up until last year, anyway.
Sorry, no conspiracies here -- I recommend going back to exposing Goldman Sachs for the evil cabal that they are....
The sudden 40 to 60% drop last year may be a harbinger of more to come.
We should take that as a cannon shot across the bow. No one can say we have not been warned.
On May 08 11:21 PM D_Virginia wrote:
Um...all this data says is that these days, there's ~3% average annual
> inflation...didn't everybody know that already? That's been a no-brainer
> for as long as I can remember -- and I'm no spring chicken.
Sure, when you compound it over many years it gets scary-looking,
> but for most of us, it's offset by the ~11% gains in the market --
> up until last year, anyway.
Sorry, no conspiracies here -- I recommend going back to exposing Goldman Sachs for the evil cabal that they are....
Apparently, Bernake and friends don't think the value of the dollar is sliding enough. I guess he hasn't bothered asking you or me.
I guess it is not only abut the paper, something tells that it might be all about the military power. Well, at least for now.
The next move will be from China, and they are already doubled their gold reserves.
Check out Tim Iacono’s post on gold reserves seekingalpha.com/artic...
And this only financial side of things.
What happens when they feel superior to U.S. military wise, I do not know.
www.mises.org/store/Pr...
The top 5% actually benefit because they have the personal pricing power( differentiated skill set), poiltical control ( hence resource allocation power)and investment/asset mix to expand real income and wealth. Hence income, wealth and power continue to flow up(the Rising Sap effect?) from 95% of Americans to the corrupt governing elites.
For these elites, your chart is affirmative evidence of how well their strategies for accumulating money, power and status have succeeded over the decades. The power to debase is the power to tax is the power to rule.
Dollar values and supply must change constantly in any capitalistic society to allow for inflation that is an absolute.
The big catch is when inflation outruns money supply as has been seen in many, mostly under developed countries. It's not going to happen here, at least not in the near future.
If you happen to be old enough to remember 1971, How many people do you know that do not have it much better now than then.
On May 08 10:40 PM expat in China wrote:
> Great research,
>
> The graph is a good example of the evolution that can be detrimental
> to the group USA! The USA group is the host at the present and the
> parasites and adjacent groups are both positive and negative forces.
> The evolution, a result of selective processing with migration based
> on the inputs of policies and managed force fields.
>
> Leaders, managers and dictators want their piece of history so CHANGE
> is directed to promote one groups position and is often detrimental
> to the other group with aberrations that can destroy the host. <br/>
>
> Our current administration is doing there part, is it improving our
> groups survival or position in the pond?
>
>
To regain competitiveness against the Asian currencies the dollar should probably drop by another 30-40%%, and labor costs also need to drop at least 30 or 40%.
If you happen to be old enough to remember 1971, How many people do you know that do not have it much better now than then
I happen to be old enough, it didnt take two incomes for the average household to survive, and society had alot less ills. Nobody knew what a latchkey kid or a crackbaby was, now they run our government.
I guess we're entering a similar or worse period now.
The first step in restoring the economy thus is to bring US troops home--all of them from all of the 185 countries where they now are. Including from Iraq and Afghanistan. Meanwhile cut military spending by 95%.
After all the only "enemies" the US has are the countries the US has invaded. Our war on the Afghanis Iraqis, and Pakistanis are immoral wars of aggression. And the US already has lost the war in each case. (Tank God for that! Aggressors should lose!)
They also are incredibly expensive. I am disappointed that Obama is an ultra-Conservative war-monger. So we are going to spend another 5 or 6 trillion killing Afghanis Adan Pakistanis before we leave.
Until Americans lose their megalomaniac desire to rule over the world, the dollar will continue to decline.
There are many precedents. One is 17th century Spain, which went into debt for trillions of trillions (adjusted for inflation)--spending all the silver taken from Mexico 10 times over-- fighting for 40 years to conquer the Dutch.
But unfortunately--as this post and the comments about it prove conclusively-- Americans know no history.
There are two sides to every coin - what looks like a "decrease" in dollar purchasing power can also be seen as an increase in the purchasing power (development of society, growth of GDP, etc, etc) in countries such as India, China, Latin Am., etc, where once the mighty dollar was king. The relative importance of the dollar is changing of course, and its up to our leaders to make sure that the dynamics of the US economy continue to generate weaslth-creating ideas and businesses. Having said all that of course, its certainly a sobering graph!
> Tyler,
>
> What was the methodology used for calculating the purchasing power?
> Correct me if I am wrong, but it appears that today we can buy a
> lot more carrots, bananas, autos and movie tickets than in '20s,
> even with unemployment benefits money. No?
Are you sure about this? One of the reasons for the current fiasco is that people could NOT buy a lot more, but they could CHARGE a lot more.
I wrote yesterday:
Well, it certainly is happy cupcake time again in the US.
Of course for average mom and pop investors who rely on Cramer and Kudlow for all their source of real information, have no clue what happened today.
Yes, the market was up, and yes all is right with the world now.
Right?
Wouldn't you know it though, the dollar index got destroyed to the tune of about: minus 1.8% today.
So for those that worship of the house of CNBC information, where they tell you what you want to hear, rather than what you need to hear, the S & P did not actually rise 2.3% today. It rose only .5% today thanks to the dollar getting crushed. I know for most of mom and pop America they have no clue.
They see their daily gain and think, it's all good. Besides they are only just getting back into the market now, instead of buying the
S & P @ 666, when the fear was the highest.
a) The US per capita income is the HIGHEST that it has ever been?
b) The minimum wages are hundreds of times that they were during during the Great Depression and even in immediate few decades after WWII ?
c) USA is the mightiest nation in the world, able to defend our freedoms against all evil doers ?
d) That USA is the LARGEST contributor to such bodies as IMF, World Bank, and a host of international agencies, to finance growth and economic developments and also feed the hungry, worldwide?
e) The tremendous progress made all over the world, BECAUSE of the
ingenuity of the hardworking peoples of these United States of America.
f) That the USA was the primary contributor to such organizations as NATO, the MARSHAL Plan, and many treats from communism, that could have profoundly affect the well-being and lives of the many peoples and countries in this world during last 6 to 7 decades?
I could go on and on ... ;
graphical illustrations of data is hard to come by for the above.
I will just say this, those who look at any situation and see the glass is half-empty will always see and say it so!
SMILE, the sky is NOT FALLEN yet.
> If you happen to be old enough to remember 1971, How many people do you know that do not have it much better now than then.
I don't know anyone who has it better now than in 1971. At least, because of the generation gap, better now than their parents had it in 1971. Back then people had what they needed without the additional worries and stress of exhorbitant debt, both personal and federal. Now they have what they want, PLUS what they DON'T want but society tells them they need, but they also have more stress and debt, and less financial security and much higher health care costs (and, as a consequence, inferior health care).
Given a choice I would prefer to return to the situation of 1971 than stay where we are now.
If you go back to 1800 you would probably find the reduction in purchasing power of the dollar is more than 99%, provided a valid methodology for doing the calculation can be found.
The rate of economic growth in the past 76 years has been high, and historically there has always been a level of inflation during periods of economic growth.
Yes, for the top 10% that control the other 90%
b) The minimum wages are hundreds of times that they were during during the Great Depression and even in immediate few decades after WWII ?
True, but minimum wage is poverty and is ok if you are in high school. There are many "families" in this country that work multiple min wage jobs just to eat, not even "live".
c) USA is the mightiest nation in the world, able to defend our freedoms against all evil doers ?
It is well beyond traditional conflict. We cannot "win" a terror war and if hypothetically the Chinese came calling, their military alone is 3 times the size of our entire population. One falls, another takes its place. Besides the fact the Chinese for all intents and purposes own us monetarily right now.
d) That USA is the LARGEST contributor to such bodies as IMF, World Bank, and a host of international agencies, to finance growth and economic developments and also feed the hungry, worldwide?
We are idiots. We are being taken advantage of. Our country has so many of its own social problems yet we give billions to places around the world. Places we know the majority of the money never gets to where it needs to go.
e) The tremendous progress made all over the world, BECAUSE of the
ingenuity of the hardworking peoples of these United States of America.
The past is the past. We dreamt it up, now the rest of the world is going to improve in it and use it against us. If only all our companies could be as innovative as google.
f) That the USA was the primary contributor to such organizations as NATO, the MARSHAL Plan, and many treats from communism, that could have profoundly affect the well-being and lives of the many peoples and countries in this world during last 6 to 7 decades?
Again, old news. The past is the past. Todays younger generations are spoiled kids who want for nothing and other than a handful, have no interest in serving this country. They want to be taken care of.
On May 09 10:04 AM Sakata wrote:
> On May 08 10:58 PM Gyoza Mimi wrote:
Why doesn't Tyler Durden make a chart of the purchasing power of the average American over the past 76 years? What he'll see is that it continues to increase. Who cares if an individual dollar is declining in value if everyone is making more and more money. Yes, the inflation rate might be 3% one year, but if wages increase by 5% then purchasing power has increased by 2%. That is the important thing to track here.
And to archman82011, I guess the decline in the stock market this past fall and winter wasn't so bad either because the dollar had its biggest rally in a generation during that time?
The point is the Fed WANTS TO make "cash trash". So, that people have to get out of cash and start investing in other asset classes.
Our leadership saw the handwriting on the wall but didn't have the guts to bite the bullet (or maybe the hand that fed them) and develop a viable energy policy 5, 10 or 25 years ago.
The chart says it correctly. It could be an overlay (inversely) of the dollars out the door in trade deficits.
The American public takes the hit once again. People on fixed incomes will really get hammered. Social Security payments won't be going up in January; the assets, savings and home values are stagnant at best; everyone hunkering down to see if they can meet bills with what's left of their investments.
Too bad we can't just bask in the past and use our accomplishments to beef up the economy.
Inflation is good if you have money (investments) and bad if you don't. That is why the middle class is getting ripped apart some moving up and others falling. The skilled service industry, IT, medical, lawyers will continue to rise - while the unskilled manufacturing and services will find it harder and harder to maintain what their parents had and will continue to have less and less and be more dependent on the government for health insurance, transportation, food and retirement. At a time when the government has less and less to give and less and less to take from.
We have all become slaves whether we know it or not, to the government and the banks. Ask yourself - could I quit my job tomorrow and move to anywhere and do anything? If the answer is yes you are a free man. If it is - I need to pay off my house, car, credit cards, child support, back taxes.... then you are a slave.
On May 09 09:28 AM Uncle Pie wrote:
> The 94% decline on the chart is about exactly in line with the decline
> of paper money vs. gold. Prior to 1933, a twenty dollar bill could
> be exchanged for a twenty dollar gold piece, which contains almost
> one ounce of gold. Today it takes about fifty of those twenty dollar
> bills to buy one ounce of gold, so the paper dollar has lost 49/50ths
> of its value or 98%. The very high correlation shows how gold has
> maintained its purchasing power!
Now there is a group that thinks we should feel guilty, [like Bufffet, and a few other billionaires] for doing so well.
I puke at the people who blame the worlds problems on the wonderful Americans who have saved them from tyranny and hunger etc etc for a long time now.
I am gonna quit this short diatribe because It will do no good.
Just one final thought. Where will the world be when America is gone? What will it be like when there are 8 islamics being born for every christian? What will it be like.
I guess I will call it the "new Dark Ages", it will not be pretty unless the real Americans talk softly and wield a huge stick NOW.
Oh forget it, u r too busy allowing the politicans to give us away.
rant rant rant
The difference is this past 20 years of Republican domination has seen the institutions that give the middle class a fighting chance ripped down to pieces.
Unions were one of the bedrocks of American life back in the 70s. The head of the UAW was a household name. Now unions have been marginalized. This is not a world wide phenomenon. It is an American phenomenon.
Institutions meant to protect middle class investors like the SEC have been made irrelevant.
Taxes on the rich are at multi-decade lows.
In fact, all of the institutions created by the New Deal to help the middle class have been made much weaker then they once were.
That is the real reason for inequality. Not fiat money.
When you think about it, the system of each nation with its own fiat currency subject to government hi-jinks trading critical exports with the rest of us is an anachronism from a bygone era when such a thing as an "internet" was science fiction. I can see a scenario where the whole complicated system of fiat debt creation and exchange rates comes to a hopeless point where all the massive insufferable debt instruments in circulation have to undergo some kind of Jubilee cancellation/reorganiz... and national fiat paper is replaced with a new global money, maybe a gold backed new money. This isn't as whacky as it may sound. Just google "Jubilee global debt" and you can see that a lot of people are talking about such a thing!
the root of this is the bankster scam aka the federal reserve. look at the names involved in the formation and tell me they had the public's best interest at heart. look at the supposed purpose and the failure.
the second villian is bloated, intrusive, burdensome, unconstitutional govt.. someone has to pay for largesse. the bill of rights has been trampled in the name of feel good rights making the right to life, liberty and the pursuit of happiness difficult.
the country became powerful because of the founding documents. the long period of looting gave an illusion of wealth. the u.s. is not blessed with the most abundant natural resources. it was blessed with the liberty to do the best you could to achieve your goals. that is where the wealth and power came from.
constitutional restoration is the cure.
You have just shown the bull chart for equities. Being fearful of investing is silly. the fear is holding cash.
> You have just shown the bull chart for equities. Being fearful of
> investing is silly. the fear is holding cash.
Not sure if you noticed, but this is an investors' website?
Don't think anyone would be posting or commenting here if we were afraid of investing.
No one is going cash and no one is recommending it.
> This is so stupid, I don't even know where to start. This is like
> an invitation for all of the gold bugs to come out.
>
> Why doesn't Tyler Durden make a chart of the purchasing power of
> the average American over the past 76 years? What he'll see is that
> it continues to increase. Who cares if an individual dollar is declining
> in value if everyone is making more and more money.
By your logic, we should move to Zimbabwe, where hyperinflation is so bad they print trillion-dollar bills and they're still not enough to buy a loaf of bread.
I don't want to make "more and more money" if that money has less and less value.
On May 09 08:05 AM User 353732 wrote:
> The debasement of the dollar is the most pernicious, universal and
> regressive tax that can be imposed. It is also invisible. Hence,
> it is highly favored by the political and social elites. It harms
> the most vulnerable and least skilled Americans the most. These people,
> lulled into believing they are being cared for because they pay no
> income taxes and receive welfare, are the very Americans who have
> the least personal pricing power to offset inflation because they
> have the least value added abilities and make the most substitutible
> and fungible contributions to society. The bottom 50% of Americans,
> over a period of decades, suffer more cruelly from this tax via inflation
> than the top half.
> The top 5% actually benefit because they have the personal pricing
> power( differentiated skill set), poiltical control ( hence resource
> allocation power)and investment/asset mix to expand real income and
> wealth. Hence income, wealth and power continue to flow up(the Rising
> Sap effect?) from 95% of Americans to the corrupt governing elites.
>
> For these elites, your chart is affirmative evidence of how well
> their strategies for accumulating money, power and status have succeeded
> over the decades. The power to debase is the power to tax is the
> power to rule.
That may be true, and it may be something to be thankful about, but geez! You lost your $@#& leg!
On May 09 09:31 AM mgcolin wrote:
> Who Cares what the dollar has done over the last 100 years? Average
> Standard of living has improved dramatically.
>
> To regain competitiveness against the Asian currencies the dollar
> should probably drop by another 30-40%%, and labor costs also need
> to drop at least 30 or 40%.
yes i am a free man since 1988.
Do I really care that the $3 fast food combo I bought 9 years ago is now $6? Yes, because the price of that particular assortment of items has doubled. Now, it may be better for me to get the sandwich by itself for $4 and not have the combo, but that's not about value, that gets into the realm of social engineering.
Extrapolated over a span of 100 years, that 3% inflation gives you a loss of approximately 95% of your purchasing power, all other things being equal. Other things NOT being equal, it has not in fact done so.
What has happened since the 1960s is that the real American standard of living has dropped. Some of this was inevitable as the US was at the height of its power in the 1950s and early 1960s and you can't stay on top of the game forever.
For whatever reason, whether it was imperial overstretch or a natural consequence of the evolution of world economies, it is my opinion that the US standard of living has been eroding for over the last 30 years. THAT's the fly in the ointment. And that's what people can see. Within our lifetimes our economic traction has been slipping, and recent events suggest that it's going to get worse.
The government now has a vested interest in acting like inflation is low, because otherwise social security and medicare will implode into a giant black hole of fiscal excess. So government is no longer a neutral compiler and reporter of statistics, it is the government's interest to paint the CPI numbers with as rosy a brush as possible. This is why the CPI has been manipulated and will continue to be manipulated to the detriment of all those on fixed incomes.
That's the big issue and that's what's going to come back to bite us all in the ass sooner or later.
On May 09 09:31 AM mgcolin wrote:
> Who Cares what the dollar has done over the last 100 years? Average
> Standard of living has improved dramatically.
>
> To regain competitiveness against the Asian currencies the dollar
> should probably drop by another 30-40%%, and labor costs also need
> to drop at least 30 or 40%.
As its usage spread, more and more could be printed and distributed...free as long as accepted everywhere.
That acceptance is now receding in what may be a horrific collapse if the world rushes to redeem. Hence the rush to gold, talk from other Central Banks of new currencies etc., as the last 4% of the dollar goes.
Human psychology is not fully predictable so if enough fear strikes it could well be the dollar may not be accepted anywhere. A good reason to hold a little gold and to exercise moderation in printing a quick way out of the current mess.
On May 09 10:14 AM Sakata wrote:
> On May 09 08:13 AM abetterplace wrote:
Note that it's not a coincidence that the Dollar's purchasing power reaches its peak at the height of the Great Depression around 1932-33.
There are certainly lots of legitimate fears about Federal monetary policy, but this is mindless fearmongering.
Let's see a chart showing how the real living standard of the average American citizen has fared over the same period, mm?
I was a kid in the 70's, so I've lived my life as your chart made my dollar's value go down. I really haven't noticed. Life's been good. Some things cost more now than they did in 1975, but some things are cheaper than they were then. As for the things that cost more now than they did back then, we get paid more than we did back then. It balances out.
Not sure what to do about that gas issue though. That $4 gas last summer really rubbed me the wrong way and stole money from my wallet that I would have preferred to spend on something else. If it hits $4, $5, $8 or who knows what, that will be an issue. Not sure what kind of rabbit Obama can pull out of his hat for that one. God help us if a major hurricane hits New Orleans this summer.
Btw, look at that same chart in sterling instead.... :)
Now both mom & dad have to work to make it.
That is how it has been hidden from the average American.
On May 08 09:14 PM Al-USA wrote:
> Wow, for "joe sixpack" American that chart means that his 1971 $dollars
> went down almost by half in purchasing power. In other words, 1971
> "joe sixpack" American needed to almost double his 1971 $dollars
> just to keep even. Obviously, I don't think that happened to most
> average Americans so the end result of Fed policy or USA government
> policy, was a massive inflation tax on "joe sixpack". I'm going
> to forward this chart to everybody I know. Good article.
On May 09 02:39 AM sivak wrote:
> You need to compare with other currencies as well, it's more of relative
> strength than to do with purchasing power..
besides from this post, you most often talk about interesting stuff...
You have a point, but USA is growing productively back then. Now, all the money pumped into the economy centers around "stabilising" the banks. What does that say about the weakening dollar? And Theresa made an excellent point. If life is that much better now, why does the typical family have to have 2 working parents just to keep pace with life? Because the standard of a good life is much cheaper, even accounting for inflation, back then.
Many people, lately, in order to have any amount of income after job loss or cutbacks, have been forced to sell their time & talent for much less than they are accustomed. The auto unions in the bankruptcy advoidance have had to make concessions. Globalization has forever changed the salary structure in America permanently & many of the lost jobs will never return. The money & means of production (wealth creation) continues to move offshore. They can print $$ all they wish, it does nothing but depreciate existing $$. What a mess.
On May 09 01:52 PM Tomcat101 wrote:
> My mom and dad both worked in the 70's. It's not the end of the
> world. Mom's don't need to sit around the house getting fat watching
> Dr. Phil and Oprah all day anyway.
Lots of discussion. Good post. Poor analysis........ The powers that be have been eroding purchasing power of currencies since the first treasurer or emporer discovered he could make more coin by substituting an alloy for the precious metal involved. What is important is relative purchasing power, but that concept is illusive at best due to the rather etherial measures. We have to settle for the living standard model. On that measure life is much better for the educated and adaptable than the poorly educated and unpliable.
Of course to make this information useful we have to add an action plan, or don't believe in Rosenberg's 13 rules yet? So you see inflation coming like a hurricane or a freight train. Unavoidable you say. Then lets all load up on debt, the government surely has and the political will to stop it will be thwarted by those very powers that created it and debtors will willingly pay with
On May 09 01:33 PM H.J. Huneycutt wrote:
> The author should post a chart that displays the purchasing power
> of the Japanese Yen over the past two decades and then display a
> chart displaying growth in the Japanese economy over the same time
> period. Perhaps that will cure his belief that deflation is good.
But the dollar will have to become worth a lot less before we could pay off our debt. That is if we stop borrowing now. Putting people on the gov. payroll can't help. We are beginning to look like Russia. That didn't work out to well.
On May 08 10:58 PM Gyoza Mimi wrote:
> Tyler,
>
> What was the methodology used for calculating the purchasing power?
> Correct me if I am wrong, but it appears that today we can buy a
> lot more carrots, bananas, autos and movie tickets than in '20s,
> even with unemployment benefits money. No?
I believe firmly that life has been considerably easier in the last decade than it was in the 70's. Not quite so good since last September when the poo hit the fan, but otherwise things have been great. We all have so much free time on our hands that we sit aound and watch tv and get fat while our kids play on their $400 video game system shooting zombies and aliens and get fat. We eat out alot because we are too lazy and fat to cook our own meals.
I'd say we've had it too easy really.
On May 09 02:00 PM Le Philosophe wrote:
> cheaper and cheaper dollars
On May 09 02:02 PM Tomcat101 wrote:
> I think we underestimate how many families had both parents working
> in the 70's. Most of my friends parents both worked. I had a few
> rich friends who's moms' didn't work. The 70's were kinda tough
> if you really think about it. It wasn't the Andy Griffith 1950's
> type of living in the 70's. Let's not kid ourselves.
>
> I believe firmly that life has been considerably easier in the last
> decade than it was in the 70's. Not quite so good since last September
> when the poo hit the fan, but otherwise things have been great.
> We all have so much free time on our hands that we sit aound and
> watch tv and get fat while our kids play on their $400 video game
> system shooting zombies and aliens and get fat. We eat out alot
> because we are too lazy and fat to cook our own meals.
>
> I'd say we've had it too easy really.
On May 09 01:56 PM Illusional Delusion wrote:
> I'll give you that. It's healthier, they have more time with you
> back then than the average working family have now, isn't it?
On May 09 02:07 PM Illusional Delusion wrote:
> You might be right on that. Right now, we are starting to face the
> calls from our main exporter to walk away from the dollar. That will
> change how easy life gets...drastically
> Good grief, man...they say that human beings tend to forget the bad
> and remember only the good...this seems to be true , in your case.
> Everyone I know is much better off than in the "good old days". better
> technology, better health care available, better food and sanitation,
> better roads and cars, better police and firemen, better homes and
> utilities...I could go on. Time to grow up and smell the coffee,
> as it really is.
Yes, but how much more better would our food, sanitation, cars, roads, and utilities be if we had been working with an asset-backed currency instead of with a fiat-based one? If Americans were not so eager to spend money because of the depreciating dollar (they certainly can't earn enough from a savings account to compensate for the dollar's depreciation), then maybe they'd SAVE more. These savings could then be used by companies for INVESTMENT in equipment and research.
> A falling dollar is detrimental if you want to travel overseas. Bu
> Free trade & free market capitalism is essential to ensuring
> goods remain cheap at home, hence improving the overall standard
> of living of Americans.
If you're buying goods from overseas, a falling dollar then requires that one pay more. Dollar down = petroleum up. I'll give you that if we were self-sufficient in terms of raw materials, it wouldn't matter as much. We're not, though.
I think if we had maintained a gold standard and not debased the currency then the wars of the last 76 years would have been fewer in number, less vicious, and of shorter duration. The "barbarous relic" is really a civilizing influence because it checks government power and maintains financial discipline. But you never know what might have been.
Any chart would be illusionary. Why? Because America's standard of living has been increased not by "real" wealth, but by borrowed money.
What do most American's actually own? I am going to say that we all here are pretty smart people and most other American's are not as smart (I don't want to insult anyone)
Most Americans confuse "depreciating" pieces of junk as "appreciating" assets (thanks to non stop careful media marketing to persuade us to buy crap we don't need).
Fact: (Ok, so i don't have a link to the data but I have read it enough times):
Average Americans total liquid net worth in no more than $35K. That is an asset, though cash has less and less buying power. Stocks can of course appreciate faster then inflation.
1/3 of american homes are owned free and clear. That is an asset.
Hard assets of all types are assets.
However:
America's standard of living for the past 2 decades was an illusions created by the ability to borrow money from elsewhere, and pay interest on it. The debt kept growing and growing. As long as you could pay just the interest and a tiny part of principal, the debt was manageable.
Now the illusion has been exposed. All those tied to the financing of the illusion have been getting killed.
Our so called wealth has been hurt, and now the debt that gave the illusion of wealth and the illusion of this great standard of living, is breaking the backs of Americans who confused real liquid net worth with pretend net worth.
The travel is cheaper now than a year ago.
And dare I remind you that the USD can buy more oil, more copper, actually more commodities.
But the duscussion is illuminating as it looks that people around the world trust dollar much more than Americans do. The reason is that the people outside USA can compare - American government, USD and economy with their government, currency, economy... ;-)
On May 09 02:41 PM Carlos Lam wrote:
> On May 09 02:16 PM Cetin Hakimoglu wrote:
> Who are "they" who don't want us to see the chart? This info is not
> news to me, and I certainly don't have any inside insight into it.
> You know, there is a flip side to this purchasing power argument;
> the average annual pay 76 years ago was $1550, and today it's $38,000.
> Hey, what do you know, 76 years ago it was 94% less.
And an ounce of gold also bought the same then as now. So what has happened? Money has been inflated so that the greedy plutocrats could skim their percentage off the top.
> Any chart would be illusionary. Why? Because America's standard
> of living has been increased not by "real" wealth, but by borrowed
> money.
"Borrowed" from whom? Banks? And then paid back? With money earned via productive effort? I'm failing to see the problem.
Businesses have been doing this since the dawn of time. Why is it not "real" when individuals are doing it?
Businesses have been doing this since the dawn of time. Why is it not "real" when individuals are doing it?>>
Because individuals are NOT paying it back!!
You fail to see the problem??
Or you don't want to see the problem?
This is why we are having all the problems:
Mortgages-not being paid back
Credit Cards not being paid back
Car loans-not being paid back
Boat loans-not being paid back
Leases of all types-not being paid back.
On and on and on.
What has caused and is still causing problems? The above items that were securitized, sliced and diced, then leveraged 40:1 to make others money. The rest of the world bought the crap, which was marketed to them as "safe" by our banks, etc, and now the truth comes out.
Getting back to another post from a while ago:
Borrowed money from home equity extractions, and credit cards, to give the appearance of a better standard of living was and is, a complete illusion. That illusion has come undone. We would not be having the problems we have today if everything you state was that simple.
Thank you for the good dialogue, and I am always willing to stand corrected and learn from others.
But as one knows, humans only live that long, so nothing is certain. No country is problem free, just more or less of what you can accept.
My sense is that my parents only needed one income and most things went fine. Average but not well off. I prefer sustainable growth than pump and dump government policies like what we see now. Inflation have not picked up yet, since we are not at the stage where businesses have started to expand on optimism. Factory orders have to ACTUALLY pick up first before they increase production, so any better than expected is merely a typical bottoming observation.
On May 09 02:12 PM Tomcat101 wrote:
> I too have concerns about inflation, not normal routine inflation,
> but hyperinflation. That would suck. Any suggestions as to where
> you think the "good" places to live might be? Australia? I could
> go for that. I love to hear Australian women with that cool accent.
> But every living creature there can kill you. Even the puppies are
> poisonous. I'd hate to avoid the hyperinflation of American and
> die from a cricket bite in Australia instead.
On May 09 03:21 PM Greyowl wrote:
> Actually, from the start of the crisis dollar appreciated against
> most currencies. And quite substantially. You can buy more euros,
> Indian ruppees, Russian rubles, British pounds...
>
> The travel is cheaper now than a year ago.
>
> And dare I remind you that the USD can buy more oil, more copper,
> actually more commodities.
>
> But the duscussion is illuminating as it looks that people around
> the world trust dollar much more than Americans do. The reason is
> that the people outside USA can compare - American government, USD
> and economy with their government, currency, economy... ;-)
>
>
On May 09 10:19 AM lastboyscout wrote:
> I am old enough! I'm sitting in a smaller house than my parents,
> I just put down my cold leftover mac & cheese to write this post,
> I have 2 kids, my parents had 3, I drive a way older vehicle than
> my parents did and we still are concerned about the price of fuel
According to the way government inflation statistics are calculated, using the official government method of "Hedonic Adjustment" - whereby, when the quality of an item increases - that even if the price of the item goes up, it actually costs less for inflation reporting purposes.
Therefore, using hedonic adjustment, the government can unequivocally state the following:
Yes you are eating Mac and Cheese, but it's a FAR BETTER Mac and Cheese your parents ate.
I wonder if the Government also considers your two kids to be of higher quality than your parents two kids?
On May 09 04:41 PM archman82011 wrote:
> <<"Borrowed" from whom? Banks? And then paid back? With money earned
> via productive effort? I'm failing to see the problem.
>
> Businesses have been doing this since the dawn of time. Why is it
> not "real" when individuals are doing it?>>
>
> Because individuals are NOT paying it back!!
> You fail to see the problem??
> Or you don't want to see the problem?
>
I see that the vast majority of individuals ARE "paying it back", and thus your original argument -- that the average American's standard of living is bogus -- is bogus.
It's a big big leap from "some people abused credit" to "our standard of living is built on nothing".
1) (Machievelli999) The reduction in the standard of living in the U.S. (and ALL Western countries, for that matter) has been caused by an attack on working people. True. This has been accomplished primarily through lying about unemployment. We live in an era of PERPETUALLY high unemployment (NEVER below 10%). This permanently depresses wage demands AND has been instrumental in destroying labour unions.
2) The purchasing-power of Americans (and people of all other Western, banker-dominated economies) has been destroyed. The MEANS to accomplish this was leaving the "gold standard" - since it is impossible to engage in this degree of currency dilution while ON a "gold standard.
The REASON why the USD (and other currencies) have been destroyed like this is to increase the money-supply and BORROWING to the point where the American people are now economically-enslaved by the same banksters they now despise.
3) Gold and silver are the best "antidotes" for these poisonous policies. An ounce of gold is was it is. It can NEVER go up in value. The reason that the PRICE of an ounce of gold is no longer $30 - as it was when the Federal Reserve was created was because gold CANNOT be debauched, and the (private bankers of the) Federal Reserve cannot be trusted!
The Fed's policies are far more reckless today than at any time in its history. The fact that for a period of a few MONTHS the USD is not showing this horrific decay should not lull anyone into complacency.
You can buy your ounces of gold TODAY at under $1000, or you can wait for a couple of years and TRY to find some under $2000/oz.
Here is the problem though:
According to everything I have read, and I think others have read as well. This entire credit crisis, which has lead to this recession, is because of defaults on all the items listed in my previous post.
Correct? If I am wrong I want to be corrected.
Now you state that the vast majority of individuals are paying it back. According to what I read, the entire financial system back in Sept, was on the verge of collapse. Banks have been going under left and right (33 this year and counting) The government literally owns all our biggest banks. Why?
Because of massive, widespread defaults on all the items I listed previously. And just think, a lot more is coming down the pike.
And yet, the "vast" majority of Americans are paying everything back??
It is simply not true.
You do not get a complete and almost collapse of the banking system when the vast majority of people are paying things back.
I do not mean to be so argumentative, but to say that the majority of people are paying things back is a bit far fetched.
On May 08 10:14 PM TheSnail wrote:
> Next your going to advise me the world has changed considerably over
> the last 100 years.
>
> Psst...Tyler...there is this thing called evolution.....and you can
> draw cool charts showing major changes in physical structure and
> appearance over time.
>
> No I am not impressed by this graph.
Subsidies should be left to the states, if at all. people can "vote with their feet" easier, without having to emigrate from the US. States with excessively generous policy will suffer the results
Unfortunately, this is not possible for any of us. Wherever your two feet land, someone claims ownership of the dirt under them. Worse, several 'authorities' - town, county, school district - claim taxing authority over that dirt. If you keep moving you are trespassing; if you stop moving you are squatting. Unless you have a nice pile of those 'worthless' greenbacks (or other local fiat currency, as applicable) you are simply hosed when it comes to 'moving anywhere'.
A nice commentary on this is Thoreau's 'Walden' from the mid-1800's. Worth a quiet weekend re-read.
94% decline over 76 years = 3.77% annual inflation
94% decline over 76 mths = 55.9%
94% decline over 76 weeks = 585%
this brings me to think of another question. is it correct to accuse other currencies (ie chinese yuan) to be under valued, or should we accuse the USD being over valued?
In order to understand why only a relatively small amount of defaults can wreck a creditor, you need to really get into the innards of the fractional banking system. Because the banks can loan out many times more money than they actually received in deposits, they become very highly leveraged. When you're leveraged at that level, it's like being highly margined in the stock market, even a small decline in your holdings can wipe you out.
This is why even a 10% default rate on outstanding loans can wipe you out. Of course, the banks were the ones who made the decisions to loan the money out, so it is their problem. Unfortunately now it's become OUR problem.
On May 09 05:17 PM archman82011 wrote:
> <<I see that the vast majority of individuals ARE "paying it back",
> and thus your original argument -- that the average American's standard
> of living is bogus -- is bogus.>>
>
> Here is the problem though:
>
> According to everything I have read, and I think others have read
> as well. This entire credit crisis, which has lead to this recession,
> is because of defaults on all the items listed in my previous post.
>
> Correct? If I am wrong I want to be corrected.
>
> Now you state that the vast majority of individuals are paying it
> back. According to what I read, the entire financial system back
> in Sept, was on the verge of collapse. Banks have been going under
> left and right (33 this year and counting) The government literally
> owns all our biggest banks. Why?
> Because of massive, widespread defaults on all the items I listed
> previously. And just think, a lot more is coming down the pike.<br/>
>
> And yet, the "vast" majority of Americans are paying everything back??
>
>
> It is simply not true.
>
> You do not get a complete and almost collapse of the banking system
> when the vast majority of people are paying things back.
>
> I do not mean to be so argumentative, but to say that the majority
> of people are paying things back is a bit far fetched.
> Actually, from the start of the crisis dollar appreciated against
> most currencies. And quite substantially. You can buy more euros,
> Indian ruppees, Russian rubles, British pounds...
Yes, for now. The TREND is unquestionably down, though. Indeed, during the first half of 2008, gas rose to almost $5/gallon!
> this brings me to think of another question. is it correct to accuse
> other currencies (ie chinese yuan) to be under valued, or should
> we accuse the USD being over valued?
Both. The Chinese central bank pursues a soft peg to the dollar by buying dollar denominated securities and carrying out other transactions. If the Chinese central bank allowed the yuan to appreciate, then the Chinese people would gain more purchasing power; they'd be able to afford a lot more of the things that they make (i.e. electronics, clothes).
On the other hand, the USD is overvalued. What would the exchange rate be if the dollar was not the world's reserve currency and if the nations of the Arabian Peninsula didn't accept payment in USD?
Markets are nearing a resolution which is graphically illustrated by the relationship between the 50 and the 200 EMA. Fundamentally, the economic news flow will either continue to support the recovery thesis or we will see renewed deterioration. The author's expectation is that the fundamentals will continue to show gradual improvement and the markets will manifest this with a bullish crossover of the 50 and 200 EMA.
Having largely completed its initial impulsive short covering rally off an historically oversold bottom produced by a generational Financial Panic, the nascent Bull Market will now consolidate during a transitional period technically characterized by the interplay between price and the 50 and 200 EMA's. Investors will use this period to buy the dips to accumulate positions. Bears will attempt to reposition for an anticipated decline by selling rallies. Trapped longs will also sell rallies into technical resisitance in the SPX 975-1015 range. The overall effect will be a range trade for several months with the eventual 50/200 EMA crossover indicating the longer term trend.
The BullBear Market Report
seekingalpha.com/insta...
www.TheBullBear.com
This same idiot author bitched and whined when GS was able to raise $5Bil to pay back TARP when they are allowed. There were a ton of articles written to short BAC when it was at 9 earlier in the week, how's that 55-60% loss from being short-busted? When are people going to learn that shorting is dangerous?
In the mean time, I'll enjoy another day of good old fashioned short busting!
I remember cities where if you could breathe the air, you knew it was killing you and if you went to a restaurant or flew on a plane, the smoke was inescapable.
I remember pressing the brakes going down a steep hill in our Pontiac, and experiencing total loss of brakes because the brake hose ruptured and there was no backup brake circuit like cars have now. THAT was a fun crash...no air bags, no engineered deformable front end...only the seat belts which had recently been mandated save my life.
We waited over an hour to get help because there were no such things as cell phones...and when we got to the hospital, compared to today's technology it was utterly medieval.
I also remember persecution of religious minorities. If you weren't Catholic, Baptist, white or Protestant you could get seriously beat up. Very seriously.
The police could do pretty much anything they wanted.
Women got no respect. Men and women died 15 years younger than today.
If you go back 76 years to 1933, most of the country had no telephones, electricity, indoor plumbing...there was no TV, no birth control (mostly illegal) other than ugly back alley stuff. Massive numbers of children were still orphaned because their mothers died in childbirth after having too many children. Large numbers of men had been mutilated physically and emotionally by World War 1. It was an ugly and brutish time.
Yes, if you look only at money, gold has kept its purchasing power...but to say that inflation is the only metric by which to judge progress is just a bit too one dimensional for my taste.
This is not to say that I have a problem with TD. I think his stuff is top notch.
On May 09 09:44 AM Bill S. Friend wrote:
>
> If you happen to be old enough to remember 1971, How many people
> do you know that do not have it much better now than then
>
> I happen to be old enough, it didnt take two incomes for the average
> household to survive, and society had alot less ills. Nobody knew
> what a latchkey kid or a crackbaby was, now they run our government.
>
Let's do the math. If one 1971 dollar went down by 81% or eighty-one cents, then one dollar in 1971 is worth nineteen cents today. That means JSA needs to earn $5.26 today for every dollar earned in 1971.
On May 08 09:14 PM Al-USA wrote:
> Wow, for "joe sixpack" American that chart means that his 1971 $dollars
> went down almost by half in purchasing power. In other words, 1971
> "joe sixpack" American needed to almost double his 1971 $dollars
> just to keep even. Obviously, I don't think that happened to most
> average Americans so the end result of Fed policy or USA government
> policy, was a massive inflation tax on "joe sixpack". I'm going to
> forward this chart to everybody I know. Good article.
I think it's important to understand that the dollar's demise has been masked to a large extent by the massive productivity gains of capitalism over the years, which have made production costs much cheaper and allowed people to achieve and maintain prosperous lifestyles (in captitalist countries, that is). The point is that if the dollar had maintained its value the prosperity effect would have been magnified by the 94% that would not have been lost. We should be much richer, both individually and collectively, than we ever achieved, and we could have done it without resorting to cheap credit and unsustainable bubbles. The model for this scenario was indeed America in the 1800's, when the dollar (under an imperfect gold standard) not only maintained its value but actually increased in value for 100 years, while we had an average of 5% annual growth in the economy.
However I am not contesting the fact that dollar has got debased, with the kind of policies (monetary/fiscal/tax/c... etc) - much worse days are ahead for the economy and the $.
THE FED IS A PRIVATE ORGANISATION BUT YET PAYS NO TAXES.
endthefed.us
At the same time end inflation-deflation, bust and boom, to much tax, modern slavery, money out of thin air, ,,,,,,,,,,
Let deflation creep back in to raise the value of the Dollar and you will get another Depression. You can "Bank" on that fact.
Capt Brian
The lost navigator
Disclosure, short FAZ, long metals, nothing else. Love cash and gold
On May 09 11:16 AM capt Brian wrote:
> You have all lost sight of reality. I quit reading the coments. What
> Americans fail to notice, that up until the criminals in the banking
> industry chopped our heads off, and the politicans ran rampant thru
> our wallets, even with all of that, we are a people who have learned
> how to enjoy life.
>
> Now there is a group that thinks we should feel guilty, [like Bufffet,
> and a few other billionaires] for doing so well.
>
> I puke at the people who blame the worlds problems on the wonderful
> Americans who have saved them from tyranny and hunger etc etc for
> a long time now.
>
> I am gonna quit this short diatribe because It will do no good.<br/>
>
> Just one final thought. Where will the world be when America is gone?
> What will it be like when there are 8 islamics being born for every
> christian? What will it be like.
>
> I guess I will call it the "new Dark Ages", it will not be pretty
> unless the real Americans talk softly and wield a huge stick NOW.
>
>
> Oh forget it, u r too busy allowing the politicans to give us away.
>
>
> rant rant rant
What were we buying 2.5 of in 1930, bales of cotton in Memphis? Cobras in Bombay? Wheelbarrows of Weimar Republic Marks in Berlin?
How is anyone to make any thoughtful conclusion from an unlabeled graph! Ridiculous in the extreme!
This is just another useless chart with lines going up and down.
Where is your proof?
Wait, I'll go ask Abby Joseph Cohen, I'm sure she'll have your answer!
I'm surprised you were able to short FAZ, but that should be a nice play for you unless we get rapid day over day declines, just be sure to stop yourself out.
On May 10 12:02 PM capt Brian wrote:
> Yikes, I knew this comment would not be well rec'd, but I only see
> thumbs down and no replies for where you downers say I am wrong.
> I am willing to learn, be wrong, but if you don't tell me why this
> thing was so negatively rec'd, then you are not helping. So, if u
> happen by here again, let me know what u don't agree with in this
> comment.
>
> Capt Brian
> The lost navigator
> Disclosure, short FAZ, long metals, nothing else. Love cash and gold
>
>
On May 09 10:00 AM User 377762 wrote:
> There is a difference between fact and fantasy. The fact is that
> the dollar fell because of deficits run up to build a great world
> empire. Almost all of these debts up to 2009% were for military
> spending. Just as almost all of the current budget goes either to
> make wars or to pay for wars in the past.
>
> The first step in restoring the economy thus is to bring US troops
> home--all of them from all of the 185 countries where they now are.
> Including from Iraq and Afghanistan. Meanwhile cut military spending
> by 95%.
>
> After all the only "enemies" the US has are the countries the US
> has invaded. Our war on the Afghanis Iraqis, and Pakistanis are
> immoral wars of aggression. And the US already has lost the war
> in each case. (Tank God for that! Aggressors should lose!)
>
> They also are incredibly expensive. I am disappointed that Obama
> is an ultra-Conservative war-monger. So we are going to spend another
> 5 or 6 trillion killing Afghanis Adan Pakistanis before we leave.
>
>
> Until Americans lose their megalomaniac desire to rule over the world,
> the dollar will continue to decline.
>
> There are many precedents. One is 17th century Spain, which went
> into debt for trillions of trillions (adjusted for inflation)--spending
> all the silver taken from Mexico 10 times over-- fighting for 40
> years to conquer the Dutch.
>
> But unfortunately--as this post and the comments about it prove conclusively--
> Americans know no history.
On May 09 10:27 PM ben young wrote:
> I remember these times too. All my friends were either in Vietnam,
> returned from Vietnam, afraid they were going to be forced to go
> to Vietnam or deciding to take a nice vacation to Canada. We had
> just finished massive burnings of cities over race hatreds and real
> prejudice. I remember personally wondering for two days if the riots
> would reach my home and family.
>
> I remember cities where if you could breathe the air, you knew it
> was killing you and if you went to a restaurant or flew on a plane,
> the smoke was inescapable.
>
> I remember pressing the brakes going down a steep hill in our Pontiac,
> and experiencing total loss of brakes because the brake hose ruptured
> and there was no backup brake circuit like cars have now. THAT was
> a fun crash...no air bags, no engineered deformable front end...only
> the seat belts which had recently been mandated save my life.
>
> We waited over an hour to get help because there were no such things
> as cell phones...and when we got to the hospital, compared to today's
> technology it was utterly medieval.
>
> I also remember persecution of religious minorities. If you weren't
> Catholic, Baptist, white or Protestant you could get seriously beat
> up. Very seriously.
>
> The police could do pretty much anything they wanted.
>
> Women got no respect. Men and women died 15 years younger than today.
>
>
> If you go back 76 years to 1933, most of the country had no telephones,
> electricity, indoor plumbing...there was no TV, no birth control
> (mostly illegal) other than ugly back alley stuff. Massive numbers
> of children were still orphaned because their mothers died in childbirth
> after having too many children. Large numbers of men had been mutilated
> physically and emotionally by World War 1. It was an ugly and brutish
> time.
>
> Yes, if you look only at money, gold has kept its purchasing power...but
> to say that inflation is the only metric by which to judge progress
> is just a bit too one dimensional for my taste.
>
> This is not to say that I have a problem with TD. I think his stuff
> is top notch.
>
> On May 09 09:44 AM Bill S. Friend wrote:
The finance industry has caused a massive problem due ot unregulated greed but am I unhappy that the price of houses has come down, no. Too many people spent money with wild abandon without earning it. Finally, those who lament the need of 2 income families need to admit that most are living with a bigger house and more cars than they would in 1960. Give up all the extras and live on one income. Those that will be hurt are the ones on fixed incomes but most shouldn't complain too much.
I've heard the argument about the need for two incomes today but I seem to remember many of my friends' parents both working in the mid to late seventies when I was old enough to remember. Part of the single income phenomena of years past had to do with sexism as well. In addition, a lot of families have used their second incomes to buy those things that are now "necessities" that weren't before such as multiple automobiles, larger homes, second homes, HD TV's computers, cable TV; the list goes on. So if you look at it that way, we aren't as bad off as the chart suggests but rather purchasers of more items. Also, it's difficult to measure comparable living standards. For example, a $400 TV today provides way more utility than a $400 TV in the 70's. Same goes for many items. Now I'm not saying the latest round of monetary expansionism is the right thing, but the chart has to be put in some perspective.
1+x=(2.617/.157)^1/76=...
On May 08 11:21 PM D_Virginia wrote:
> Um...all this data says is that these days, there's ~3% average annual
> inflation...didn't everybody know that already? That's been a no-brainer
> for as long as I can remember -- and I'm no spring chicken.
>
> Sure, when you compound it over many years it gets scary-looking,
> but for most of us, it's offset by the ~11% gains in the market --
> up until last year, anyway.
On May 09 08:05 AM User 353732 wrote:
> The debasement of the dollar is the most pernicious, universal and
> regressive tax that can be imposed. It is also invisible. Hence,
> it is highly favored by the political and social elites. It harms
> the most vulnerable and least skilled Americans the most. These people,
> lulled into believing they are being cared for because they pay no
> income taxes and receive welfare, are the very Americans who have
> the least personal pricing power to offset inflation because they
> have the least value added abilities and make the most substitutible
> and fungible contributions to society. The bottom 50% of Americans,
> over a period of decades, suffer more cruelly from this tax via inflation
> than the top half.
> The top 5% actually benefit because they have the personal pricing
> power( differentiated skill set), poiltical control ( hence resource
> allocation power)and investment/asset mix to expand real income and
> wealth. Hence income, wealth and power continue to flow up(the Rising
> Sap effect?) from 95% of Americans to the corrupt governing elites.
>
> For these elites, your chart is affirmative evidence of how well
> their strategies for accumulating money, power and status have succeeded
> over the decades. The power to debase is the power to tax is the
> power to rule.
On May 09 08:13 AM abetterplace wrote:
> Just another doomsday chart with no common sense value.
> Dollar values and supply must change constantly in any capitalistic
> society to allow for inflation that is an absolute.
> The big catch is when inflation outruns money supply as has been
> seen in many, mostly under developed countries. It's not going to
> happen here, at least not in the near future.
> If you happen to be old enough to remember 1971, How many people
> do you know that do not have it much better now than then.
The average curve seems pretty stable. I'd be curious to see what the graph looks like for Canada, France, Argentina, China, etc. I would think, in relative terms, the US is better off than most. Anyone have those charts or know where I can find them?
Not having 'stuff' hasn't impacted the quality of my 40 years of life in the negative (if anything, it was huge positive). Maybe I was born 50 years too late.
On May 10 07:30 PM StateofConfusion wrote:
> Well, I won't argue with the flact that inflation has occurred but
> I will take issue that this is as bad as it seems. In the early 60's
> the minimum wage was $1.25/ hr., now it is about $7.00 to $8.00 depending
> on what state you live in. That is an increase of at least 560%.
> Goods are available now that could not even be dreamed of in 1960's.
> The richest person in the world cound not get a cell phone or HDTV,
> MP3 player or internet. When you all go off the deep end about the
> ruin of the dollar, I would like to see you live in the 1950's and
> 60's (I did). No video games, no wireless, no home computers. You
> would soon ask to come back and live with the debased dollar.
>
> The finance industry has caused a massive problem due ot unregulated
> greed but am I unhappy that the price of houses has come down, no.
> Too many people spent money with wild abandon without earning it.
> Finally, those who lament the need of 2 income families need to admit
> that most are living with a bigger house and more cars than they
> would in 1960. Give up all the extras and live on one income. Those
> that will be hurt are the ones on fixed incomes but most shouldn't
> complain too much.
On May 10 06:51 PM Suncatcher wrote:
> I guess facts are malleable things. We neglected modernizing our
> military prior to world war two and thousands of our soldiers and
> sailors died needlessly at the start of WW2. We had planes, and ships
> that weren't competitive, torpedoes that didn't work, military planning
> that was out to lunch. Imagine flying your dive bomber through a
> Japanese destroyer screen to almost certain death, beat the odds,
> watch your torpedoes hit the target and not explode, then be ordered
> to return to carrier to rearm and try it again. You want to argue
> history with me? Let's get started. When the next WW starts I doubt
> you will be in the trench with me and that will be a good thing for
> many reasons. As far as fantasy goes..your description of President
> Obama ... that broke the fantometer
Until the American people barf up the Greenspan-Bernanke Fed Fruit Punch Flavored KoolAid they've been drinking for years regarding inflation, they will continue to allow their money to be debased, their earnings to be punitively confiscated, and their children to be sold into serfdom to the Egghead Masters. Wake up, and drink the ipecac.
On May 10 12:44 AM Glen L. wrote:
> Wow, Tyler posts a chart that is well-known and uncontroversial,
> but you would never know it here! The Fed posts its own dollar value
> calculator which shows the same devaluation; actually the Fed's
> calculator goes back to its own inception in 1913 - implicitly acknowledging
> that the Fed is the one true source of inflation.
>
> I think it's important to understand that the dollar's demise has
> been masked to a large extent by the massive productivity gains of
> capitalism over the years, which have made production costs much
> cheaper and allowed people to achieve and maintain prosperous lifestyles
> (in captitalist countries, that is). The point is that if the dollar
> had maintained its value the prosperity effect would have been magnified
> by the 94% that would not have been lost. We should be much richer,
> both individually and collectively, than we ever achieved, and we
> could have done it without resorting to cheap credit and unsustainable
> bubbles. The model for this scenario was indeed America in the 1800's,
> when the dollar (under an imperfect gold standard) not only maintained
> its value but actually increased in value for 100 years, while we
> had an average of 5% annual growth in the economy.
>
>
>
>
Did I really hear you call the thousands of Americans youngsters who have volunteered for military service in Iraq and Afghanistan (including 4200 combat deaths and 32,000 officially wounded) spoiled kids? Fact: Volunteerism of all sorts among today's younger generation is at a near all-time high.
On May 09 10:35 AM archman82011 wrote:
> Again, old news. The past is the past. Todays younger generations are spoiled kids who want for nothing and other than a handful, have no interest in serving this country. They want to be taken care of.
I think you got the wrong Roosevelt, fighter
For all the complaints that today's children aren't good at math-- I have to wonder about the baby boomers making the accusation.
Social security, even using government accounting "standards" that no private company could get away with, is trillions of dollars in deficit. There is no way today's children will even get their money back in real terms -- it is mathematically impossible.
Greedy, selfish elderly have bled the system almost dry. There is very little left to meet the onslaught of the baby boomers.
Comments like archman's explain why we have yet another completely stupid man as President. Bush and Obama are idiots -- but they unfortunately represent the populace (like archman) all to well
On May 09 10:35 AM archman82011 wrote:
> Again, old news. The past is the past. Todays younger generations
> are spoiled kids who want for nothing and other than a handful, have
> no interest in serving this country. They want to be taken care of.
How is the purchasing power calculated for that chart?
On May 11 07:17 PM sabre_jenn wrote:
> The elderly in this country have created a ponzi scheme that would
> make Bernie Madoff blush: Social Security
>
> For all the complaints that today's children aren't good at math--
> I have to wonder about the baby boomers making the accusation.<br/>
>
> Social security, even using government accounting "standards" that
> no private company could get away with, is trillions of dollars in
> deficit. There is no way today's children will even get their money
> back in real terms -- it is mathematically impossible.
>
> Greedy, selfish elderly have bled the system almost dry. There is
> very little left to meet the onslaught of the baby boomers.
>
> Comments like archman's explain why we have yet another completely
> stupid man as President. Bush and Obama are idiots -- but they
> unfortunately represent the populace (like archman) all to well<br/>
Social security itself should be abolished over a period of time. People should save for their on retirement and take care of themselves. I give up a lot of luxuries today to make sure I have enough saved over time to have a comfortable retirement. I don't feel entitled to have the government pay me to stop working. And I definitely don't expect my children to fund it.
On May 12 09:54 AM ben young wrote:
> ummm - those greedy elderly gave birth to you. They gave you every
> technology you use. They wiped your rear ends when you didn't know
> how to go to the bathroom. They sent you to college when they could
> have blown the money on themselves. They paid their taxes. You will
> be elderly sooner than you think.
Now salute the flag and git back to work and TV watchin.
You all need to start saving to pay for all those who do not. All you ants work for the grasshoppers now and they need new cars.
Oh, one thing though, you had better collect fast because Social Security, Medicare are going bankrupt soon.
On May 09 10:19 AM lastboyscout wrote:
> I am old enough! I'm sitting in a smaller house than my parents,
> I just put down my cold leftover mac & cheese to write this post,
> I have 2 kids, my parents had 3, I drive a way older vehicle than
> my parents did and we still are concerned about the price of fuel
> to drive and heat our home with. And I bug my kids to turn off the
> lights to save on the electric biil just like my parents did. I do
> have a college degree that my parents did not have. Crysler needed
> a loan in 70's, Crysler in in Chapter 11 today. GM stock on 6/1/1972
> was 29.49 per share, yesterday it closed at 1.61 per share. My parents
> were looking at a recession, I am looking at a depression. Am I better
> off?
Technologically speaking, Japan, China and Korea seem to beat us is spades, being that we have to import a good proportion of our scientist/engineers from those countries.
But hell, every decade has it's down side.
I personally have never heard anyone describe the 1950's and 60's as "brutish", but maybe I know all the wrong people.
On May 09 10:27 PM ben young wrote:
> I remember these times too. All my friends were either in Vietnam,
> returned from Vietnam, afraid they were going to be forced to go
> to Vietnam or deciding to take a nice vacation to Canada. We had
> just finished massive burnings of cities over race hatreds and real
> prejudice. I remember personally wondering for two days if the riots
> would reach my home and family.
>
> I remember cities where if you could breathe the air, you knew it
> was killing you and if you went to a restaurant or flew on a plane,
> the smoke was inescapable.
>
> I remember pressing the brakes going down a steep hill in our Pontiac,
> and experiencing total loss of brakes because the brake hose ruptured
> and there was no backup brake circuit like cars have now. THAT was
> a fun crash...no air bags, no engineered deformable front end...only
> the seat belts which had recently been mandated save my life.
>
> We waited over an hour to get help because there were no such things
> as cell phones...and when we got to the hospital, compared to today's
> technology it was utterly medieval.
>
> I also remember persecution of religious minorities. If you weren't
> Catholic, Baptist, white or Protestant you could get seriously beat
> up. Very seriously.
>
> The police could do pretty much anything they wanted.
>
> Women got no respect. Men and women died 15 years younger than today.
>
>
> If you go back 76 years to 1933, most of the country had no telephones,
> electricity, indoor plumbing...there was no TV, no birth control
> (mostly illegal) other than ugly back alley stuff. Massive numbers
> of children were still orphaned because their mothers died in childbirth
> after having too many children. Large numbers of men had been mutilated
> physically and emotionally by World War 1. It was an ugly and brutish
> time.
>
> Yes, if you look only at money, gold has kept its purchasing power...but
> to say that inflation is the only metric by which to judge progress
> is just a bit too one dimensional for my taste.
>
> This is not to say that I have a problem with TD. I think his stuff
> is top notch.
>
> On May 09 09:44 AM Bill S. Friend wrote:
On May 09 01:52 PM Tomcat101 wrote:
> My mom and dad both worked in the 70's. It's not the end of the world.
> Mom's don't need to sit around the house getting fat watching Dr.
> Phil and Oprah all day anyway.
In a company, if they want to issue more stocks, they need to get the approval of the majority of the shareholders, while in the US, if they want to print more money, they don't hold an election.
On May 09 01:55 PM 4Annie wrote:
Globalization has forever
> changed the salary structure in America permanently & many of
> the lost jobs will never return. The money & means of production
> (wealth creation) continues to move offshore. They can print $$ all
> they wish, it does nothing but depreciate existing $$. What a mess.
I believe what you should be asking is, what if we had the dollar valuation of the 1930s when it was pegged to gold, and we have all of the technology and niceties that we have now.
On May 09 10:27 PM ben young wrote:
> If you go back 76 years to 1933, most of the country had no telephones,
> electricity, indoor plumbing...there was no TV, no birth control
> (mostly illegal) other than ugly back alley stuff. Massive numbers
> of children were still orphaned because their mothers died in childbirth
> after having too many children. Large numbers of men had been mutilated
> physically and emotionally by World War 1. It was an ugly and brutish
> time.
>
> Yes, if you look only at money, gold has kept its purchasing power...but
> to say that inflation is the only metric by which to judge progress
> is just a bit too one dimensional for my taste.
>
> This is not to say that I have a problem with TD. I think his stuff
> is top notch.
What is new is the ponzi scheme (social security) that THIS group has stuck their children with. Every generation before this one has left their children better off technology-wise -- and paid their debts within their own lifetimes.
This is the first generation that chose of their own free will to live well beyond their means and stick their kids with the bill. That's just greed.
Now the children of the greedy -- the ones that gave us woodstock and flower power -- are following their parent's example and running $2 trillion per year deficits!!! Obama himself says the government won't evem run balanced spending for a decade -- never mind any effort to pay this debt back.
The great ponzi scheme was just updated today -- it will be officially bankrupt in 2037, even using absurd government accounting scams that a private pension would never get away with
On May 12 09:54 AM ben young wrote:
> ummm - those greedy elderly gave birth to you. They gave you every
> technology you use. They wiped your rear ends when you didn't know
> how to go to the bathroom. They sent you to college when they could
> have blown the money on themselves. They paid their taxes. You will
> be elderly sooner than you think.
On May 08 10:58 PM Gyoza Mimi wrote:
> Tyler,
>
> What was the methodology used for calculating the purchasing power?
> Correct me if I am wrong, but it appears that today we can buy a
> lot more carrots, bananas, autos and movie tickets than in '20s,
> even with unemployment benefits money. No?
However, this post is the unthinking, reacting, Id side of the character. This is a one dimensional argument. A better measure would be the hours of work required to accomplish something or buy something...I am pretty sure the Dallas Fed puts out such a report (while McTeer was compiling it?). By that standard of living, we are substantially better off.
Disregard my above comment, here is the complete and edited comment below. It is well worth the read.
The dollar's buying power can be thought of as total combined inflation or inflation in practical terms. Using relative terms is deceptive (i.e. the dollar's buying power as of 1920 compared to 2009). There are better ways of saying what's going on than the dollar's buying power being down 94%. For instance, the more straightforward way of putting it is that the dollar's buying power being down 94% in the last 76 years actually means that what $.06 would buy you in 1920 it takes $1.00 to buy you now. Yet another way of putting it is that a dollar is only worth 1/12 of what it used to be. To the people that think this kind of stuff does not affect them. Think about the standard salaries employers were giving for a new college graduate in 1989. The number was $30K. Now think about what the number is today. It's still $30K, maybe $35K. However in that same time period the dollar's purchasing power as compared to 1920 went down from 2.5% in 1989 to 1.5% in 2009. This means exactly what any cognizant person who was alive and over five years old during that entire time period already knows, that the dollar's buying power today is only 3/5 of what is was in 1989, meaning the standard salary for a new college graduate should be $50K today and so on and so forth. You think companies don't know this stuff and haven't adjusted the rates of their products accordingly. Of course they have. Yet they certainly haven't adjusted what their paying you. They love that the status quo salary numbers stay the same and don't adjust for inflation. It basically means they get to pay you less. This is absolutely how the rich get richer and the poor get poorer. Then rather than get spent like it would by someone who could absolutely use the extra cash, instead it becomes just another dollar locked up in a savings account of the rich never to be seen again in the US economy. Should you be mad. You should be mad as hell, but you're way too stupid to do anything about it.