WHEN A DOLLAR WAS A DOLLAR

Inflation, the devaluing of money, has been with us at least since the early Roman times. Back then, to raise more money for government purposes, Rome started making clad coins, with copper on the inside and a thin layer of silver on the outside, reducing the size of silver coins and reducing the silver content of the alloy in coins. This worked in the short term until it became known that the coins had been lessened in value, and then their trade value decreased accordingly.

Here in the USA, the value of a paper dollar was tied to the price of gold and silver, and paper money was called gold notes and silver notes. Our coins were all 90% silver and of a standard size. Then in 1964 our government quietly called in all the silver coins and in 1965 issued clad coins in their place that have no silver at all. We’d already been taken off the gold standard back in the 1930’s.

So now we have paper money whose only value is the credit rating our government has in the world market combined with the amount of dollars in circulation, and that number is steadily rising, resulting in a steady decrease in the value of dollars. To illustrate this, in 1957 the average wage in the U.S. was about $5000 a year. Today, 60 years later, the average wage is $57,000 a year. That makes a 1957 dollar worth the same as $11.40 today in wages. It would be nice if that were true, because the average car then cost $800 new and the average new car now costs $35,000, a person could feed themselves for a week for $10 in groceries and now it costs $300 a month for the same quality of food.

A nice new home in a good neighborhood was about $5000 or less. The same exact home today sells for $350,000 and up.

So wages are no longer a measure of inflation, because the truth is that in 60 years our dollar has LOST almost ALL of it’s value. A dollar today is worth around 1.7 cents compared to 60 years ago. Even so, the dollar is still the world’s primary money, because the US is the most stable and prosperous nation on Earth. People TRUST the dollar.

Good for them. I don’t trust it worth a crap, I’ve been watching it degrade for too many years and I know how unstable it actually is. Inflation makes a lot of rich people richer in the short term but it makes us all poorer in the long term.

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