An Hour Of Your Time Has Never Been Worth Less

Tyler Durden's picture


Whether it's deleveraging, spare capacity, dollar debasement, productivity gains, or just plain old obesity, in real purchasing power terms, an hour of your time has never been worth less. In the 40 years since Nixon's 1971 fiat-fiasco, the value of the average hourly earnings for US citizens has dropped 90% in terms of Gold. The last time that our labor's efforts garnered such a low value saw a twenty year credit-blown releveraging (from 1980 to 2001) to save-us-all; we suspect that debt saturation will limit the ability of any central bank to create such a 'recovery' in labor-value once again. Since the peak in 2001, 60 minutes of your valuable time has lost 81% of its purchasing power! Is this what globalization looks like?


The average hourly earnings in ounces of Gold...


Charts: Bloomberg

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Thu, 10/25/2012 - 10:18 | 2918343 BigJim
BigJim's picture

Much as I sympathise with wanting to view purchasing power through the lens of something other than a fiat currency, looking at it purely vs. gold seems a bit specious.

A basket of commodities, housing, transport, energy, and health costs seems more useful.

But how do you weight them? And how do you take into account increases of productivity?

Ultimately, looking at how income disparities have increased is probably the best way to see that productivity increases haven't been reflected in the peons' pay.


Thu, 10/25/2012 - 10:18 | 2918361 Spastica Rex
Spastica Rex's picture

Nuance. Clever.

Thu, 10/25/2012 - 10:29 | 2918392 3rdgrader
3rdgrader's picture

You get demoted daily. Hourly. Every minute. At this pace, in a few more years you will have to work twenty thousand hours to buy a loaf of bread.

But don't talk about ending the Fed, no, heavens forbid we should end the reign of terror and remove domestic terrorist numero uno...

Thu, 10/25/2012 - 10:39 | 2918427 malikai
malikai's picture

If you see something, say something..

Thu, 10/25/2012 - 11:06 | 2918536 AvoidingTaxation
AvoidingTaxation's picture

I say: Fuck you pig!

Thu, 10/25/2012 - 11:12 | 2918558 TheInformed
TheInformed's picture

I'm pretty sure this is proof that gold is massively overvalued.  I love gold as much as anybody else, but this chart scares me.  Since 2000, the hourly 'value' has not collapsed anywhere near this level.  I think it's time to dump some of this inflated gold bullion.

Thu, 10/25/2012 - 12:06 | 2918669 fuu
fuu's picture

Now how did Slewie used to do this?

"Grats on your first ever post fucking toy-boy!"

Thu, 10/25/2012 - 18:51 | 2920079 3rdgrader
3rdgrader's picture

"the informed" is "disinformed"

Thu, 10/25/2012 - 11:57 | 2918712 malikai
malikai's picture

PM me. I'll happily take that gold off your hands. Better hurry before it collapses by at least 50%.

I'll give you 75% of spot today.

Thu, 10/25/2012 - 11:49 | 2918690 A Nanny Moose
A Nanny Moose's picture

I like the beer and coffee index personally

Thu, 10/25/2012 - 10:24 | 2918377 Dr. Engali
Dr. Engali's picture

The basket of commodities does not work as a measuring tool because they are never a constant, The availability ebbs and flows. Gold is a constant, and production only grows about 1% per year.

Thu, 10/25/2012 - 10:32 | 2918403 malikai
malikai's picture

Commodity pricing of income shouldn't be precluded on this basis, IMO. You can still average the price of the commodities you put in the basket to get a stable value. And I think it would do much better than gold alone.

Thu, 10/25/2012 - 11:04 | 2918520 catacl1sm
catacl1sm's picture

Use the BMI, Big Mac Index.

Thu, 10/25/2012 - 11:45 | 2918679 SafelyGraze
SafelyGraze's picture

the following basket would work:

Tuition at Wayne State University
Ford Maverick and Mustang

see below for details

Thu, 10/25/2012 - 12:27 | 2918822 BigJim
BigJim's picture

 The basket of commodities does not work as a measuring tool because they are never a constant, The availability ebbs and flows. Gold is a constant, and production only grows about 1% per year.

Gold production is relatively constant (between 1 - 2% increase of stock per annum), yes. But the percentage of the working population and productivity are not.

So one could only expect wages in terms of gold to stay the same if the working population were also expanding at 1 - 2% per annum, no? That's assuming that the price of gold reflects (or should reflect) the same stock/flow ratio of all other existing wealth, a proposition I can't argue one way or the other because I haven't yet a sufficiently developed theory of capital to inform my thinking on the matter. So much to read, so little time...

Furthermore, productivity comes into this as well. If people are producing less, for instance (say because their 'socialist' governments have decreed a 35 hour working week, or subsidies for inefficient but politically favoured industries) then you'd expect their ability to purchase gold to decrease, too.

Don't get me wrong - I buy the general thesis we're being raped by monetary debasement and other wealth redistribution schemes. I just think analysing that rape by comparing wages with only the price of gold (a 'money' whose value has (and is) been manipulated and suppressed) is less than rigorous.

Thu, 10/25/2012 - 16:01 | 2919493 cornedmutton
cornedmutton's picture

I really wish people would stop using the word "constant" in the same sentence as a non-zero growth rate.

0% growth is CONSTANT.  1 ~ 2% is NOT constant.  Claiming it is is akin to the Fed claiming that the stable prices mandate is met with a target inflation rate of 2% or less.

Thu, 10/25/2012 - 10:31 | 2918400 Sophist Economicus
Sophist Economicus's picture

A close proxy for that was the old CPI measurement -- unfortunately, the conclusions above are the same

Thu, 10/25/2012 - 11:22 | 2918599 Muppet Pimp
Muppet Pimp's picture

Funny you should return during this particular example of sophistry

Thu, 10/25/2012 - 10:37 | 2918416 ebworthen
ebworthen's picture

Ask yourself if you have to work harder to pay health costs, energy, rent or a devalued underwater house, and food.

Pretty easy calculus there for 99% of the population.

Thu, 10/25/2012 - 11:32 | 2918633 laserjock
laserjock's picture

Wages are relative to what you buy with them, regardless of what they're priced in.  Everything I buy also costs less in ounces of gold than 10 years ago.

Thu, 10/25/2012 - 12:44 | 2918875 Lester
Lester's picture

Like there was no inflation/manipulation before Nixon closed the gold window?

Nixon's action was what got him watergated. The usual suspects were Looting Ft Knox Gold, using France as a proxy. No other participatory nation was redeeming dollars for gold; only France. Not like they had billions of tourist dollas coming into their coffers in the late 60s, early 70s; so where'd they get all the cash??? The usual treasonous bastards is the answer.

You can think kindly of RMN for taking this action, otherwise we would have collapsed long before this.

I remember my mother telling me of 5 Cent hamburgers, bought in a sit-down diner when she was a kid; the mid-30s.
In 1970, a burger-king whopper with all the fixings you could pile on it cost about 79 cents.

Inflation and manipulation of prices because of money-supply controls happened from Day 1 after passage of Federal Reserve Act.

Nixon would've been assassinated for his bold action, stopping the gang's looting mechanism dead in its tracks, but with JFK, RFK, and MLK in recent memory, it was decided to ruin & disgrace RMN instead.

Nixon closing the gold window was the decisive Constitutional action of the 20th century.

Thu, 10/25/2012 - 10:21 | 2918365 vast-dom
vast-dom's picture

choking the chicken doing the five finger boogie woogie pocket billiards or what have you for an hour is still a good deal -- maybe one of the last remaining good deals, assuming you can feed yourself well enough. and you've fucked yourself in the best possible way, and no one else; which is a lot more than you can say about the vampiric deathforce known as the government.

Thu, 10/25/2012 - 10:38 | 2918418 slaughterer
slaughterer's picture


$$ pouring into abandoned beta (GOOG, CMG, PCLN).  Once a bubble always a bubble.  

Thu, 10/25/2012 - 10:52 | 2918476 TrustWho
TrustWho's picture

I do defend the Fed as they are just robber barons. However, Volcker is a saint in a den of thieves and does not belong in this scum grouping!

Thu, 10/25/2012 - 10:58 | 2918499 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Agreed. Volcker raised interest rates which gave a lot of short term pain but a whole decade of gain. Very nice move.

Thu, 10/25/2012 - 13:22 | 2918986 Death and Gravity
Death and Gravity's picture

No, its globalization together with rampant politcal idiocy and domestic inflation of currency.

Thu, 10/25/2012 - 10:11 | 2918335 Jason T
Jason T's picture

We go down from here.. towards a new dark age.  Where is Constantinople?

Thu, 10/25/2012 - 10:16 | 2918349 Orly
Orly's picture

Go to Istanbul and make a hard right...

Thu, 10/25/2012 - 10:19 | 2918362 dwdollar
dwdollar's picture

I don't know where the New Constantinople(s) will be, but I can tell you where the New Romes are right now... New York, DC, or any city in California...

Thu, 10/25/2012 - 10:35 | 2918410 Zadok
Zadok's picture

London first with a modern suburb of Manhattan.

Thu, 10/25/2012 - 11:07 | 2918543 JOYFUL
JOYFUL's picture

Rather than a physical place, Neo-Byzantium will occupy the conciousness of those who escape the destruction of the western world as a destination similar to the fabled Prester Johns' Kingdom somewhere in Asia.

And it will be found not by looking, but by seeking, the seekers being those who took careful note of all of the signs of the coming collapse and then sought out the like-minded, for a journey East, to stand against the Peril. This ain't goin down without a fight.

JRR's Gondor was nothing but a description of same. We are assembling. Smiths, Axemen n Farriers* of all sorts welcome!

*preference given to those of the hoof rather than hood speciality!

Thu, 10/25/2012 - 10:11 | 2918336 firstdivision
firstdivision's picture

How much time does it take to fill out a homeloan application now?  MBA Apps show that they may need to shorten the time it takes to fill out a reri or loan application.

Thu, 10/25/2012 - 10:14 | 2918344 cxl9
cxl9's picture

If that graph goes low enough, it will make sense for most people to quit their jobs and start panning for gold.

Thu, 10/25/2012 - 10:31 | 2918399 A Lunatic
A Lunatic's picture

I did the math a few years ago and discovered that I was nearly spending as much money to earn the money I needed make more. So fuck it. No more debt = no more wasting my time playing a losing game. Do yourself a favor and buy tomorrows lifestyle at today's prices as much as possible. You'll be glad you did.

Thu, 10/25/2012 - 11:12 | 2918559 lunaticfringe
lunaticfringe's picture

Not sure what that means but I like it.

Thu, 10/25/2012 - 10:34 | 2918407 Shizzmoney
Shizzmoney's picture

I hope so.  A mass walkoff of people from their jobs in protest of rising inflation and stagnanting wages, as well as a tax-and-debt strike, is just what this country needs.

CEOs wanna extort our leaders via the WSJ

Well guess what, motherfuckers: it's a numbers game and there ARE more of us then there are of you.

Thu, 10/25/2012 - 10:45 | 2918449 debtor of last ...
Thu, 10/25/2012 - 12:35 | 2918856 SafelyGraze
SafelyGraze's picture

"If that graph goes low enough, it will make sense for most people to quit their jobs and start panning for gold."

if it goes negative, people will *have* to

dear citizen: as of this date, your obligation to the emperor's treasury shall be one (1) ounce of metal per fiscal period. you are hereby notified to present yourself at the designated enumeration facility for processing. -Caracella AD 212 (or 2012)

Thu, 10/25/2012 - 10:15 | 2918347 SilverMoneyBags
SilverMoneyBags's picture

My  grandpa was making $30-60/hr doing blue collar, manual labor back in the 60s and 70s. Talk about insane since most people would consider that to be amazing today.  /facepalm

Thu, 10/25/2012 - 10:19 | 2918368 BigJim
BigJim's picture

You should have seeen what my great-grandfather used to make as a farrier*!

*Farrier: specialist in equine hood care 

Thu, 10/25/2012 - 10:37 | 2918417 Zadok
Zadok's picture

Hoof, as in hoofing it to work and back in the snow, uphill both ways, and in the heat and humidity of mid-summer!

Thu, 10/25/2012 - 12:29 | 2918844 BigJim
BigJim's picture

LOL, yes, *hooF*

Thu, 10/25/2012 - 11:04 | 2918526 CynicLaureate
CynicLaureate's picture

My farrier gets $75 per horse for 30 minutes of work.  In 2012 dollars.  With five horses that $375 every six weeks.

Can't outsource it or do it by machine, either.

Thu, 10/25/2012 - 11:30 | 2918622 Seer
Seer's picture

After LOTS of research I concluded that horses are over-rated.  In my neck of the woods there are MANY horses, and MANY people are selling [trying] too, as they can no longer afford the hay burners (I refer to them as "home-wreckers"); someone's even selling their horse trailer (not that it's unusual, but what is unusual is that they are), asking $65,000! (that's USED!)

The only possible exception are draft horses, and even then there are more proven animals.

So, I wouldn't think that a farrier has it made (outside of the bubble era), as this is a specialty highly dependent upon folks with disposable income.  NOTE: this applies to horses, goats etc (real livestock) are a different matter- note to farriers: branch away from horses and you'll be in a better position (though history doesn't say that you're going to be wealthy doing it, but then again, a meaningful living is, well... meaningful).

Thu, 10/25/2012 - 12:58 | 2918919 Zadok
Zadok's picture

My drafties were referred to a grass guzzlers. Mules are much better that way.

Thu, 10/25/2012 - 13:57 | 2919092 hedgeless_horseman
hedgeless_horseman's picture



Four shoes, with clips, will run north of $150 around these parts.  Hot shoes, cocks, or borium puts you well over $250.

We keep ours trimmed, conditioned, and well fed, so we have no problems going barefoot, although ours are usually the only horses at the A-shows without shoes. 

Thu, 10/25/2012 - 17:37 | 2919914 Zadok
Zadok's picture

We kept ours barefoot too. I read up on it, worked up from goats and did it myself.

A wobbly draft mare learning to stand on three legs can really make you nervous.

Good times!

Thu, 10/25/2012 - 12:34 | 2918854 BigJim
BigJim's picture

 My farrier gets $75 per horse for 30 minutes of work.  In 2012 dollars.  With five horses that $375 every six weeks...

OK, I admit it, I know nothing of farrier's income - I just pulled it out of the air as an example of what I thought of as a profession/trade whose demand 'must have' declined... I should have said 'buggy whip repairer'.

(cue someone saying THEIR buggy whip repairer gets $150 per whip for 15 minutes of work, etc)

Thu, 10/25/2012 - 10:26 | 2918383 strayaway
strayaway's picture

As a union laborer in Detroit, I earned over $8/hour in 1968. Tuition at Wayne State University was $175/quarter. Ford Mavericks cost $2,000 and Mustangs cost $2,500. Gasoline was normally about $.32/gallon with sporadic gas wars bringing it down to as low as $.199/gallon.

I recently mentioned these numbers to a high school senior and he looked at me as if I was talking crazy. I wondered why his history classes had missed the lesson on our national decline.

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