Oh look, the purchasing power of the dollar has declined 97% since the Federal Reserve was established!
Oops.
The propaganda effort in support of the fiat money system has been enormous over the decades, and has been quite successful. Former Fed chairman Alan Greenspan once told Ron Paul on occasion of his semi-annual testimony in Congress that he believed “we have had extraordinary success in replicating the features of a gold standard“. We are quite sure he was aware that this is actually not the case. And yet, apart from Ron Paul, no Congressman would have even thought of questioning this absurd assertion. One would think that the fact that the US dollar – one of the world’s “better” fiat currencies – has lost 97% of its purchasing power since the Fed has been in business speaks for itself. Mises has already shown in 1920 that socialist central economic planning is literally impossible. No rational economy can be centrally planned. Central banking simply represents a special case of the theorem of the impossibility of socialism, applying to the financial sphere.
Maybe we should go back to tally sticks, but then again, you wouldn't want to be left with the short end of the stick!
Even though I was young, I kept many silver certificate banknotes (US Currency), indicated by the blue seal on the paper. I realize that the government is not willing to exchange $1 in silver for the banknote these days, leaving me holding the short end of the stick.
ReplyDeleteI keep those banknotes as a curiosity these days when the government prints money without any backing at all.
In the early 80's I found myself in Hungary, of all places, in the company of a group of like minded souls. One of us went to exchange his forints ( the money they used there) for dollars, and the Hungarian bank gave him a wad of silver certificates, not realizing that they were any different than the normal greenback. It was a sensation!
DeleteFor more on this subject read SECRETS OF THE TEMPLE and THE MONSTER FROM JEKYLL ISLAND.
ReplyDeleteNot really meaningful since no one living in 2015 can buy anything from 1913. A better measure would be a multivariate look at the purchasing power of one hour of labor for various trades, skills, and positions in life. You cannot even buy the same iron today that you could back then so you can't make meaningful price comparisons. Everything is different.
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