I'll make it simple.
A dollar in 1913 is only worth 5 cents today. 1913 is the year that the Federal Reserve was created with the mission to maximize sustainable employment and stable prices. That's a pretty terrible result.
How did the dollar do going back the same amount of years before the Federal Reserve?
A dollar in 1818 grew in value to be worth $1.28 in 1913. That means that the value of a dollar actually gained purchasing power during the years when we actually had a free market and no central bank led by so called experts on the economy.
It kind of reminds me of the Soviet Union. They started in 1919 and many believed that a centrally planned economy would be so much better than one that relied on the free market. Many were deceived by the propaganda that the Soviet Union was doing so well. But finally thier controlled system collaspsed in 1989. The grand experiment with a controlled economy failed miserbly.
Many have accepted inflation as normal as the sun rising in the morning. It's now become accepted that inflation is good.
But isn't increased productivity supposed to bring prices down? Is it a bad thing that computers and phones are so cheap now?
Do you really want to be forced to be a speculator just in order to keep from having the value of your money rot away?
Money was created so people could have a store of value. If someone produced eggs, they didn't have to stockpile eggs and see them spoil with time. They could trade in their eggs for gold which would last forever. It seems to me that our basket of dollars is not much better than a basket of rotten eggs.
Ben Bernanke just got reconfirmed for another term as Chairman of the Federal Reserve. There was a lot of debate about whether he did a good job or not. I think this video pretty much sums up how much faith one should put on the predictions of Bernanke.
It's not really who you put at the helm, it's the system itself.
Peter Schiff was a lot better at seeing what was happening with housing and the economy.
Here he is trying to educate people about the history of money and the Federal Reserve and calling for the end of the Fed. He's actually running for Senator in Connecticutt. The series of videos is well worth watching. Without knowing what the crux of the problem is, there's no way we will be able to solve the situation without a crisis and collapse of the system.
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