Now? What was the value in 1919?
Posted on 11/12/2013 6:32:25 AM PST by Starboard
Favorite qoute from article ...
“Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history.
And the impact? Even by the Fed’s sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. By contrast, experts outside the Fed, such as Mohammed El Erian at the Pimco investment firm, suggest that the Fed may have created and spent over $4 trillion for a total return of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S. economic output). Both of those estimates indicate that QE isn’t really working.
Unless you’re Wall Street. Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.”
So the FED guy hired to buy all the bonds says that it was essentially a wealth pump for the banks and Wall St. while booking 4 trillion in debt to the US taxpayer. This is the definition of crony capitalism. Can’t wait for the FED apologists to explain to us how the FED is wonderful and we are to stupid to appreciate their brilliance.
Now that’s some big money right there....
When jug ears is out, there will be a recovery.
I doubt that..Hillary will promise more “Free Stuff” and will win by a landslide. There are not enough conservatives to stop her...IT IS OVER.
bkmk
Weren't we under the gold standard at the beginning of your chart?
That didn't take long. /s Maybe they pay you too much? ;)
Sure, and at the start, the FRN (a bank note - not a gold certificate) was worth 100% of its issued value. What's its value now; less than 2% of its original value?! Name one fiat that hasn't had its value go to zero. Currently the FRN is only 1+ points away from zero(note 0.9 is technically less than zero, otherwise we could argue ad infinitum - as is the case with Zimbabwean currency).
Anyway isn't GLD tied to actual gold, even though there are said to be 59 owners for every ounce of gold under control of COMDEX. It's the same old story. If you don't hold it, you likely don't own it.
I'm sure you know the story of how initially we were under a "gold standard", and because of it, the dollar became the world's standard. The fly in the ointment was arbitrarily assigning the value of a quantity (one ounce) of gold to a "fixed price" (aprox. $20). Even gold certificates were tied to value, instead to an amount of gold.
Then Roosevelt confiscated most the gold in private hands, and then lowered the value of the dollar relative to gold by increasing the value of gold to $35. Then Nixon took us off the "gold standard", not that we were really on it by then, and today we see the approaching end of the value of the dollar by massive printing to meet the obligations of an out of control federal government.
Something else I've just came to realize, it that a significant amount of fiat in circulation is due to the use of consumer credit (e.g., credit cards). Perhaps as much as 20% of the currency in circulation wasn't even generated by the Fed, but by consumers going into debt.
Our current economic apparatus is very complicated. Designed that way for a reason, much like a gambling house designs its games to give the house a significant edge. Perhaps more like a Ponzi scheme instead of a game of chance though. Central banks prefer the odds better in their favor I think.
All fiat eventually is worth only the paper it is printed on and all Ponzi schemes eventually collapse.
Now? What was the value in 1919?
Yes! Banks had all these guaranteed bonds yielding 2%-4% and now they have cash yielding 0.25%. That's a sure way to boost profits.
Of course volume wouldn't affect profits at all, would it?!
With the dollar becoming worthless, not just worth less daily, who gives a crap now what it was worth in 1919?
Volume of what?
It appears that gold didn't prevent a decline in value before, so why the wish for a gold standard now?
I must be missing something here, but why don't governments globally just void all money owed to "Federal Reserve Banks" (or whatever other countries call them), stop printing money they don't have, and be surprised how quickly local economies figure it out?
Gold and silver certificates might be something to consider, payable in various quantities of gold and silver upon demand at any local bank. Quantities of PMs would need to independently verified by both public and private agencies. Keeping these PM exchanges honest, as we see now, is easier said than done once central banks and their governments become incentivized to obfuscate actual amounts on hand, something not to worry about with crypto-money, which btw, is now over $500 a Btc.
Bump
But the Fed is owned by the US government.
Meanwhile, US citizens can't accumulate savings at near-0% rates.
My mortgage is below 4%, I'm saving a lot.
FWIW, the Fed is not owned by the US government. It’s a private institution, creating profits for its very mysterious owners. As far as your 4% interest goes. Once you pay off your mortgage, wouldn’t it be nice to be able to accumulate savings for retirement? Besides that, if you’re paying 4% and the government weren’t just handing out this bogus money, people with savings would be getting some interest on their savings.
Yes it is.
It’s a private institution, creating profits for its very mysterious owners.
How large are these profits?
Once you pay off your mortgage, wouldn’t it be nice to be able to accumulate savings for retirement?
I'm not waiting until after I pay off my mortgage.
Besides that, if you’re paying 4% and the government weren’t just handing out this bogus money,
Handing out? Is that what you feel they're doing?
people with savings would be getting some interest on their savings.
How much interest do you feel they'd be getting?
Temporarily useful lackey's.
Do your homework.
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