To: M-cubed
In 1933, Roosevelt devalued gold from its statutorily-defined value of $20/oz to $35/oz. Today, it is just shy of $670/oz.
If you think that money is not gold and gold is not money, we could compare the cost of any other market basket. I remember gasoline in the 1960's selling for 19.9/gallon. In these terms, the dollar has declined in value by about a factor of 10. By almost any other measure the dollar buys less today by a large factor. (By the measure of hard disk drive capacity, it is just the opposite)
Over the years, the US government has totally cut the dollar free of gold and to day there is no legal definition of the value of the dollar. Its value fluctuates according to supply and demand. Since the supply is so easy to come by (it is borrowed into circulation at the press of the mouse button), the direction of the trend of its value is clear.
People should not confuse wealth with money. Because nothing stops governments from inflating-away their currency, keep your wealth in assets that will tend to respond positively to inflation.
To: theBuckwheat
Because nothing stops governments from inflating-away their currency Public opinion can be a deterent and higher interest rates can also deter govt. created inflation.
41 posted on
02/18/2007 7:46:58 PM PST by
staytrue
To: theBuckwheat
[...to day there is no legal definition of the value of the dollar. Its value fluctuates according to supply and demand.]
That's how it's supposed to be. Assuming the economy is sound (people are continuing to freely produce goods and provide services in exchange for money) and the government isn't screwing with the supply of currency, then a dollar accurately reflects the real value of work.
42 posted on
02/19/2007 9:53:47 AM PST by
spinestein
(There is no pile of pennies so large that I won't throw two more on top.)
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