Jerry Feldman wrote:
On Mon, 12 May 2008 04:10:50 -0700
Bob Estes <[EMAIL PROTECTED]> wrote:
This is an excellent example of how our current monetary system is
devaluing our money. Here is another example: The current value of silver
is about $17 per Troy ounce. The current silver dollar is one Troy ounce
of .999 fine silver. With the price of gas about $4 per gallon, you can
buy a little over four gallons with that silver dollar. Before 1964 our
coins contained silver. In the early 1960's you could buy a little over
four gallons of gas for one silver dollar. What has changed? The world
market no considers the Federal Reserve dollar to be worth the same as it
was forty years ago. That is the result of using worthless paper or fiat
money.
Gold, Silver, Oil, Orange Juice, and copper are all commodities. At
present time the value of the US dollar is low, US exports are way up,
and Oil, Gold, and Silver are relatively high. Years ago, the Federal
Reserve Bank of New York had (actually still has) a vault of gold, and
gold was physically moved between various counties' section of the
vault. The problem here is that gold and silver are commodities and
their values also float. Don't jump on me if my dates are wrong, but we
effectively went off the gold standard in 1933. And in 1968 US currency
was no longer exchangeable with silver.
You are absolutely right, and the value of our currency has been in a
downward spiral ever since.
The thing that devalues our money is inflation. There are a lot of
economic reasons for not tying money to gold or silver, and the hard
currency battle goes back hundreds of years.
What is inflation? The classic answer is too much demand for too few goods
and services, but this is too simplistic. Perception is a major factor.
When people perceive that the value of a currency is degrading, they want
more of it for their goods and services. When their perceived value of a
currency reaches a certain level, they refuse to accept it at all. After
the Revolutionary War, paper money issued by the Continental Congress was
worthless. After the Civil War, people preferred hard money to the paper
money issued by the U.S. Government. After WWI, the German Deutchmark was
worthless. Paper money may be great according to economic theories, but in
real life it doesn't work very well.
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