Charts like these are dramatic, but omit the whole story. The “purchase power erosion” is actually inflation, and doing the math presented visually, inputes a little less than a 4% annual rate of inflation.
Inflation is, simply put, too much money chasing after too few goods and services. Pinning all of that on the federal reserve or some organized conspiracy by (_____ fill in your paranoid delusion here) is not justified. Inflation has multiple sources; everytime you ask for a raise, everytime OPEC cuts oil production, evrytime a tax is raised, or some one borrows to get that (whatever) they have to have now instead of saving for it — all of these things cause more money to chase after the same (or less) stuff.
The chart is really not profound and anyone with a basic understanding of mainstream economics is not all that alarmed at seeing it, again... The only reason no one would want you to see the chart is due to most people not having enough economic literacy to put it in perspective.
The whole purpose, and sold bill of goods of the Federal Reserve was that it would keep the value and supply of money steady, and there would be no wild swings in the economy.
Kind of a capitalist, scientific Marxist money management.
Well, how’s it worked so far?
“Inflation has multiple sources; everytime you ask for a raise, everytime OPEC cuts oil production, evrytime a tax is raised, or some one borrows to get that (whatever) they have to have now instead of saving for it — all of these things cause more money to chase after the same (or less) stuff.”
If your theory is correct, then Obama did nothing wrong in printing a few trillion for the TARP.
Your causes of inflation seemed to not cause inflation before the Fed combined with Progressive governments. Inflation was almost unknown the first 120 years of America. Prices for goods, land, services were very consistent as time rolled on. And in 1900, we had the highest standard of living on earth, by a factor of four to the nearest competitor.
The simple fact is, the progressives needed the ability to “run” the currency. The recent example. Obama prints up a trillion for TARP and bailed out banks in Germany England, and elsewhere in Europe. If he had to lay taxes to bail out a European bank, things like this could not occur.
If you are a global economy type, you love a currency that has no meaning. You hate a currency that has meaning. And a currncy with meaning also causes rational governments to be held to a standard lest their imaginary money suffer falling exchange rates. A fiat currncy is the tool of the statist, it certainly isnt the cause of wealth.