Quote from Emini Maestro: The US currency, coin and paper alike, is not backed by anything tangible. That is the same for pretty much of the other 320 or so world governments. Some countries use or peg their currency to the dollar. Which leads right back to the above paragraph. Today's dollar is worth about 3% of what it was in 1913, most of that loss due to removal from the gold standard, and the money supply being inflated by the Fed. Wrong. Inflation is worldwide, and is not particularly related to the Fed or removal of the gold standard - inflation has existed well before that event. Here is a website, showing British police salaries in 1910. They range from 1.33 to 3.80 pounds per WEEK. For example, multiply the lowest - 1.33 33 and you get about 500 pounds a week, which is not so far from the likely current starting British police salary. Not like it is off by an order of magnitude or anything. http://www.therhondda.co.uk/riots/met_pay.html And today, westerners are considerable more well off than people in 1913. Health, longevity, possessions, jobs and many other things. Blacks or women in 1913 - what kind of real job could they get? Who bought homes then compared to the home ownership now? Wealth was highly concentrated among the very few. Frankly, things are better, not worse than 1913. Inflation has existed for a long long long long time in modern societies.
The coins actually have tangible value in their metal composition. The penny & nickel are actually worth more than their face value.
What medium do you use to measure the "worth of the dollar" today and in 1913? Unless you specify that, how can you conclude that the dollar depreciated? Maybe, it's the other medium that has appreciated? Moreover, there's really no such thing as the "worth of the dollar". It's just a measure of purchasing power. Does a contemporary person/family have 3% of the purchasing power they would have had in 1913?
And...... Currency is a means of wealth conveyance that is not easily forged....whose value is reflective of the issuer's overall worth.... Measure of worth ? If one were to close all the borders ....importing nothing.... What would people have for their usage ? If transport, energy, apparel, food, education, housing, health maintenance were all available....then would the value of issuance be more or less than those who would not have access to all the categories....? .................................................................. Thus everyone knows the next question.... Then why all the concern about the US dollar ? Which of the above categories are no longer accomplished ? Which other country produces more of all the categories ? Since the issue is about dilution of the money stock...is money just not some form of constant dependent on a country's production capabilities ? Having the assets and asset producing capability is there.... Thus the issues are all about prices and legal agreements.... And at some price it all works.... And issuance/dilution (making the currency less scarce) becomes the wild card....which is a matter of one's spending habits.... ................................................. So what is today's US $ story ....? Is it not solely based on dilution issues.....and levered legal obligations which required huge changes in dilution....? And if so ....why not make deliberate remedies to the contrary ....? It would seem that those decision makers who are stealing savers wealth....should be held accountable.... To date....where is the accountability ? Why is "legal" stealing allowable in the first place ?
Ok, your great grandfather put at $20 in a mattress for safekeeping and you pull it out today for spending. That $20 bill was quite a sum back then. That $20 has practically no value now. Of course your $20 has lost most of its value.
It's worth more than it was last year, and the year before that and even 5 yrs ago. Your dollar TODAY, can buy more house, more electronics, and more services than it could in the above timeframes. So no matter what the FX community tells you, you can get more for your dollar in real goods now than you could.
Given that there are more poor folks than middle class folks, I would disagree with this example. CPI is the official govt measure of inflation's effect on the taxpayer. However, CPI is a joke and does not measure real recurring staple costs every household earning less than $50k (that's the majority BTW) pays, every day, week-in and week-out. Food, alcohol, gas, rent, cars, insurance and clothes. The majority doesn't buy middle-class homes or the latest computers. With these folks in mind, inflation has eaten about HALF of the dollar's value in the last seven years. That means a 50% hit to the dollar, in that period.
its worth the net sum of the American people, their aspirations, their hopes, dreams, abilities and creativeness, and oh, our military....
I see. So you're expecting the notes themselves (the currency, not the capital it can represent) to serve as a store of value, apart from being the medium of exchange?