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Inflation
Submitted by Adam Taggart via Peak Prosperity,
For close to 300 years, inflation in the US remained very subdued. Small spurts occurred around major wars (Revolutionary, Civil, WW1, etc), but after each, inflation quickly trended back down to its long-term baseline. If you lived during this stretch of time, your money had roughly the same purchasing power your great-grandfather's did.
But something changed after inflation spiked yet again during World War 2. With the permanent mobilization of the military industrial complex and the start of the decades-long Cold War, combined with a related acceleration in government deficit spending, inflation did not come back down. It remained elevated, and in fact, rose further.
That is, until the "Nixon shock" in 1971, when the dollar's remaining ties to gold were severed. Then inflation EXPLODED. And the inflationary moon-shot has continued since, up to present day.
So, we've become used to a system in which our money loses purchasing power over the years. For anyone aged 50 or younger, it's pretty much all we've ever known.
But it doesn't have to be this way. Indeed, our country did fine for centuries without systemic continual chronic inflation.
So why do we accept it today?
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Calling Gary Gnat, spill on isle 2.
Bitcoin is the answer to all our problems.
I remember when I thought in 3 dimensions... i(sic) used to enjoy watching decapitations/
You're living in fantasy land my friend. I've already discussed counterparty RISK, (VIA) my options exploration.
You can't reliably trade BTC, because of the OPTION PREMIUM! ( Margin)
P.S. I didn't downvote you.
You did much better than down voting.
Thanks
Bitcoin will be Civilization's Last Ponzi Scheme.
bid the soldier...,
Wrong!
Gold.
As George Sanders says to Marilyn Monroe in "All About Eve:
"You have a point. An idiotic one, but a point."
THE UNITED STATES IS CLOSE TO 300 YEARS OLD? WHY DIDN'T ANYONE TELL ME???
We were waiting till it got a little closer. Like 2074 or 2075.
Let me buy you a cappuccino while you're waiting.
This article has it half right.
Nixon's evil deed - taking us off the "gold standard" - was just a little gasoline on the fire which henceforth sent inflation on its current pace. But, the fire itself was lit with the advent of debt-based money instituted by the Federal Reserve's founding in 1913 putting the Ponzi scheme into motion... and it was inevitable that the currency under such a system would eventually inflate to worthlessness.
I will scream it until the cows come home... debt-free money is the answer. It just has to be managed by people with conscience (i.e. a moral foundation). And these "people" must be held accountable by the citizens of an equally conscientious Republic. They must not be swayed by the temptations put forth by power-bribed politicians - well-greased by the usurers - to grant their every wish at the expense of future generations. The century-long history which we are now at the forefront of, has devolved a dumbed-down and lackadaisical populace which doesn't deserve the mantle of citizenry endowed by our gracious ancestors. Only when the sheeple finally wake up and begin to again fulfill their responsibilities like adults will there be any substantial change for the better against the banking predators who now rule the roost.
Probably the most beautifully written example of "When Pigs Fly" I have ever read.
I will look for your comments from now on, to be educated by them. You are aptly named.
Thank you.
bid the soldier...
Please see my reply to J S Bach
Thank you for those links.
Since 2009 I believed that the QE funds going to the banks, quickly went into the DOW stocks and later into the SP 500. Your second link proves that.
Don't forget that the DOW Industrial Average components have changed 53 times since its inception in 1885.
Maybe it should be called the The DOW 83 INDUSTRIALS?
http://en.wikipedia.org/wiki/Historical_components_of_the_Dow_Jones_Indu...
Man will never end the corruption of the banksters of Wall Street. The only phenomenon capable of that would be a second Big Bang, and even then there would be no guarantee that in 18 billion years, they wouldn't be back on the phone, telling people to buy when they were selling.
Here's the Noble Dane
J S Bach,
Helpful I believe is showing citizens real asset price histories.
http://www.showrealhist.com/yTRIAL.html
http://www.showrealhist.com/RHandRD.html
IMO, the MAIN ENABLER of sizable asset price bubbles is keeping the real asset price histories rarely seen.
Ponzi Scheme ? Oh that is so 2009 , I thought you Flat Earth guys were more 2014 with the goverment shutting the Internet and grid down - to stop bitcoin . I wonder what the ZH Flat Earth Society will be saying about bitcoin in 2015 ? It will probably be something like "the aliens are invading and they are going to pull a blockchain fork out their arsehole and crash bitcoin."
Very close, my friend, for bitcoin is like an enema. You put your liquid assets someplace you think is safe, and when you finally want to reclaim them, you watch them go down the toilet.
Thanks for the metaphor.
Yeah , your right buddy , we can all go home now , the expert has spoken.
By the way , how deep is your bunker ?
Federal Reserve to the rescue.
Of whom?
Perhaps after the WWIII, plague, extermination, emp, zombi apocalypse, reset things can be different. Until then, MOAR central planning.......
Stock markets will be in the green for each of those if the printers are still churning out funny money.
The video fails to mention velocity of money and supply of goods/services involvement in inflation. He makes the error of thinking only increase in supply of money is inflation. Typical Austrian mistake.
The problem is that we don't have effective ways to reduce the velocity of money. We can only control the money supply. The only way we know to reduce velocity is to raise interest rate. It is not doable anymore. We have to wish the velocity of money is not out of control. Once you increase the money supply, the inflation will come sooner or later.
free money is best; not prescribed/proscribed monies, but to actually allow people to decide on their own, what money to transact with. all of this 'you're all going to use this money, and we on the committee are going to tinker with this or that aspect of it'... it has to end. or does it?...
anyway, i think honey would be the best money. we could even give people land so they could raise bees and literally 'make their own money'. like gold, honey is the thing that never goes bad. plus, unlike gold; honey is edible.
could you imagine honey as money, and then the types of chicanery that would surround that? the mind boggles... anyway, even with its potential abuses, honey would be a good money.
the thing is; break up the existing money monopoly/monopoly money. let each and every person charter their own bank, and float a currency backed by whatever they want; including nothing.
blah blah blah just trippin' here...
The gold standard is dead, and it isn't coming back. Get used to it. The dollar is king.
My Dad tells me he used to buy gas at 18 cents a gallon when he was in college in the early 1970s.
My Dad once told me if you make a funny face long enough it will stick like that. I often wonder if that is what happened to Dianne Feinstein.......
It's the rsult of too much plastic surgery.
Of course, since she was plastic to begin with, no harm done.
That's when college must have been actually only 4 years and then you graduate and get a job.
Now kids linger for 6-8 years for a BA in sociology or history, then cry they can't find a job.
NOR
strawman, asshole.
After racking up $80k to $120k in debt.
It is so fuck amazing that it is surreal.
And you could actually finds things that cost $0.05 and $0.10 in a Five and Dime store as well.
As long as those dimes were 90% silver!
There was plenty of crap over a dime in Woolworth.
He must have lived next to a refinery.
I started driving in the early seventies and it was about 50 cents a gallon. Then the embargo hit.
I started driving in the mid-late 70's and it was 75 cents a gallon (for unleaded).
My parents bought a 2,000 square-foot, new construction home on a 1/2-acre lot in southern California in 1969, for $26,000.
They sold it in 1990 for $200k.
Your parents would have got $700,000 for it if they had waited for the bubble in 2006.
When I mowed lawns as a kid in '68/'69 I filled up my one-gallon gas can for nineteen cents. When I got my first car in right in the middle of the oil embargo in '73 it was a buck a gallon and I had to wait in line and only on odd/even days according to your licesne plate. If I woulda known it was (partially) 'cuz of Nixon's gold window thing, I'd thrown a rock at him. Prick.
it was around $0.35 before the embargo.
In 1965 we took a trip from Phoenix AZ to Huntington IN. via US 54. I was just a youngin but remember a sign on the Missouri side saying "LAST CHANCE GAS 0.25".... We stopped and filled up.
Crossed into Illinois and first gas station quoted $0.19. Laughed about that all the way to Huntington. At that time US 54 went all the way to Chicago.Haven't seen gas that cheap since.
R
@CheapBastard: Right now, here in N. Texas, gas is $3.14/gal. I can get a gallon of gas for less than a quarter in pre 1964 money. a silver quarter is wiorth about $3.50...
This is the exact concept that is missing...real value of money...aka gold/silver....not FRNs. When you sit down anyone with any common sense and logic and explain this to them (especially older people who know the costs before the 1971 timeframe) then they instantly understand what you are talking about and get pissed off.
Why they didn't get pissed in 1971, guess it was a good snowjob by TPTB....but right now, they wanna fight someone over it, especially when I tell them it happened on THEIR watch.
I stopped at N. texas
Khee, not for too long I hope, this place is like flypaper. OBTW: This ain't the bible belt, it's the flipping buckle... ;-)
Stick man> loaf of bread= uncle sam>Deficit reduction> SERF/
i still don't understand how the Fed gets away with publicly targeting 2% inflation. we've never experimented with deflation, and i'm not sure how its worse than inflation, but fine, i'm happy to concede that deflation is bad. but what's wrong with a target of 0% inflation? their mandate is for stable prices, and decreasing your purchasing power by 25% every decade doesn't seem like a result of stability.
you enjoy myself,
The reason that you don't understand it's because you are listening to the wrong people.
"....their mandate is for stable prices, and decreasing your purchasing power by 25% every decade doesn't seem like a result of stability."
Thus their mandate is for public relations purposes only and not for actual application.
Cognitive Dissonance,
Central banks are part of the control.
Nice picture, by the way!
@Escrava Isaura
That's all you,ve got?
Please: Every piece of (tier3) Macro is based on Central Banking policy!
FCS, "For Christs Sakes". You were indoctrinated steps from the fire?
Yen Cross,
Cognitive Dissonance, wrote: "their (fed) mandate is for public relations purposes only"
Now, go read my answer!
Anyway, when you wrote 'tier3' and macro, then I know you are not a serious person.
The 30s depression featured MAJOR deflation and it scared the hell out of everybody. Since then the official policy has been inflation and more inflation as the cure for everything.
I agree with this.
Plus the dollar was worthless for most of its history. "At one time it was so worthless it was backed by gold."
I wanna say it was French President d'Estaing who called the 70's dollar an "exorbitant privilege." Sure appears that way going on three decades and three huge asset inflations (including the current one. Or is it four? Kind lost count now.)
Being able to actually afford a Standing Army is a luxury indeed. The Hohenzollern's were able to do it 600 years ago. They were one of the few.
By 1941 it grew to over 8 million and insofar as fighting strength probably the best ever.
About the only other countries besides the USA that have one today are Russia, Syria and Germany stiil. To some extent Great Britain and France...but nothing like they had pre 1941.
The best is in my view that American one but certainly Russia has shown itself more than capable of offensive action.
I really don't like the idea of the USA and Russia going to war at all. Lotta Ostlanders here in the USA though.
LONNNNNNNNNNG memories....
There are two major problems with 0% inflation. One is not be able to sustain ever increasing government spending. The other is not allowing elites to transfer our money into their possession. Therefore, the power that be will not favor a monetory system with 0% inflation. I guess most of us still have an illusion that government works for us.
It is because we have a debt based monetary system. All money is debt, all debt has interest rate attached to it. Only way to keep system going is to keep introducing more money/debt into system. If they let deflation take over the entire system would collapse.
The liferaft example is idiodic in too many ways to list.
I found several examples of that in the video. It seems dumbing it down just made it dumb.
liferaft? as in inflatable liferaft that bursts at some point? or as in mistaking an apparently inflatable object for a liferaft when it is really an anchor (or concrete overshoes or someother object) that will sink you.
didn't watch the video btw.
End the FED and haul them in.
Physical bitchez!!!!!!
In the future I will hear my wife say --- "I'm gonna run down to the 10 Dollar general store"
You mean ... "I'm gonna run down to the 10 Dollar and up general store"
For the 50ish and younger they have never seen the black swan known as deflation. Those in their 80's have seen it even though there was a Federal Reserve central bank! The government will default on all of the cradel to grave over promises the only questions are how and in what order.
According the the fucktards in power we have NO inflation. I can't even buy meat anymore unless it's marked down. I hike alot in the mountains, and I see deer all the time; and they are starting to look like a viable prey item at this point.
Theft by Rothschild's.
There is no diplomatic way to frame this. An army of scumbags who believe theft and murder to be a legitimate business model.
Meat, coffee, canned stuff like Sardines...and so on...almost everything at least double in price over 6-10 years.
Don't get me started on soaring health insurance costs!
No kidding re: health insurance.
And the obesity epidemic keeps waiting rooms full of people who just need to put the fork down. I have "employer covered healthcare" (no such thing -- it comes out of wages, just shows up as a different line item for the accountants). But every day the breakroom is packed with donuts and cupcakes and make-your-own taco bars. Needless to say, my employer is costing themselves double in healthcare costs by feeding their employees to death. 9 out of 10 employees I work with are overweight or flat out obese, and they all have a myriad of low-grade chronic health problems that are slowly killing them. I have never seen such an unhealthy environment. We're talking about people who, before 11 a.m., have already consumed a chemical filled fast food breakfast burrito, a chocolate muffin (if its in the shape of a muffin, then its not cake, its a health food), and washed it down with two double caramel lattes, with NON FAT milk of course, because they are "watching their weight". And thats all before lunch time.
We have those doors in our office with the handicapped access buttons that are designed for a person with a wheelchair to push and the door opens. These people will stand there and push the button, and wait for the door to open at a glacial pace, rather than exert the energy to open a door.
The cheapest health insurance is sick-avoidance in the first place. Refusing to put the donut in your mouth costs nothing. Its a form of free health insurance. So is a brisk 20 minute walk once a day (more exercise than most office dwellers see in a week).
Meh. Can you imagine a week, or even a day, when nobody buys anything?
Shit, I do that almost every week. Not for lack of funds, but because i'm over consumption. It does nothing for me and I got better things to do.
Economists say inflation is good for the economy. 2% to be exact. Well it is good for one thing - investors. WHo are the investors?
The .1%, of course.
Counter argument. Massive deflation. So if this article is correct we need for the average person to earn 2,300 dollars a year 100 years from now. Sounds good. First we can start 2 percent deflation a year and see where we end up.
I'll bet during the great depression when everybody was socking away cash they had the exact opposite opinion inflation would be a great thing. Naturally Nixon was a product of such a time.
Anyone believing that inflation is "subdued" was born after 2009!
Don't stop printing before I get mine.
Inflation is only the evidence of the banksters theft.
Much like coming home from vacation and finding that your home has been ransacked and looted.
An American, not US subject.
"Guillotine the Fed!"
More like coming home from vacation and finding that political and financial elites have moved in to your house and are trashing it with a wild, hedonistic party and paying for it using your credit cards, rendering you broke and homeless...
With the massive expansion of its money supply and large public debt I believe hyperinflation will hit Japan destroying the myth that advanced Democratic countries are immune to hyperinflation. Soon after that people will realize that the Dollar, Pound, and Euro are not safe from hyperinflation and they will want to get out of bonds in these countries as well. This will result in a huge monetization in these countries and then hyperinflation. These four currencies make up about 95% of the central bank reserves backing other currencies. Faith in paper money will be shattered, Japan will be the first domino to fall, but not the last.
Expect this hyperinflation cycle to happen far faster and much wider than others. In the past when hyperinflation occurred people did not understand what was going on, sometimes for years. When prices are shooting up people will quickly become interested in hyperinflation. With blogs, YouTube, Facebook, and other social media it will not be long before people realize the implications. Once people understand what is occurring the currency dies. So instead of taking three years, the cycle could go from start to finish in only three months. The big question is how soon will hyperinflation start in Japan, while we may debate that issue most of us will agree that we do live in interesting times. For more on this subject see the article below.
http://brucewilds.blogspot.com/2014/02/when-will-inflation-strike_1.html