I see almost nothing about the severe inflation of the past 50 years. It is astonishing and annoying to see comments about the rise in the stock market by people who have no idea why this occurs. The peak of the Dow Jones Industrial Average in 1929, before the crash, was 381.17. The dollar was valued at 1/20 of an ounce of gold. Certainly, the Dow Jones Average has changed the companies included but the principle is same, to show the average value of the large companies that anchor the US economy.
In 1934, Roosevelt outlawed the private ownership of gold and took the country off the gold standard. He set the value of gold at $35 per ounce, a substantial devaluation. This gold price held until Nixon took the guarantee of the gold price away in 1971, placing the country, and the world economy on what is called “fiat money”. A number of friends of mine were buying Swiss gold francs in spite of the law against US citizens owning gold. They kept their gold coins in Switzerland, which charged negative interest on such accounts.
In 1969, I bought my first house for $35,000, in South Pasadena. IN 1968, I bought my first new care, a 1968 Ford Mustang convertible for $3050. I paid $95 / month to the LA County Hospital Credit Union and, in three years, the car was paid for. My first house in Mission Viejo, where I had decided to settle and open a surgery practice, cost $67,000. Three years later, the bank told me it had tripled in value. Jimmy Carter had been president two years.
Now cars now cost around $30,000, ten times the 1968 price. Some of this is related to safety measures, most of which are of little use. The plastic bumpers do little but provide expensive repair bills for minor fender-benders. What has been the history of inflation since 1968 ?
Here is a chart showing inflation since 1980 The chart shows a 50% decline in the value of the dollar since 1980. I think that may understate the case. The change in value of the dollar has also tracked the gold price since the 1920. In 1928, gold was $20 per ounce. In 2011, gold is valued at roughly $1700 per ounce. That works out to the dollar being worth 11.8 cents.
As I am personally dependent on a fixed income, supplemented by a variable additional income which has declined severely the past two years, inflation worries me. It destroyed the German economy in the 1920s.
“I see almost nothing about the severe inflation of the past 50 years.”
True dat!
(Hey, doc… do you read my blog? You really should. If you don’t, I’m just curious… why not?)
“It is astonishing and annoying to see comments about the rise in the stock market by people who have no idea why this occurs.”
(*SNORT*)
Join the club! (Basically we’re a nation of know-littles. And it’s deliberate. None of this stuff is rocket science… or pre-med… but it’s not taught. There’s a reason it’s not taught. Keep the People dumb and they’ll be easier to lead by the nose.)
Anyway, doc… while you’re preaching to the choir, your message bears repeating.
God help our kids and grandkids.
Co-incident with inflation of our money is a deflation of our abilities. I read a blurb the other day where we built the Golden Gate bridge in two years. Good Lord, today it would take two years just to schedule the first round of meetings for the environmental assessments. Just think of WWII, where in addition to the martial parts of the war effort, we built the Pentagon, the Manhattan project, a secret Canada-Alaskan pipeline, practically put a third passage through the Panama Canal, built the Alaska highway, and probably more I can’t think of.
The older locals here talk of the 40s and 50s where the federal government agencies hired and supervised construction crews that built roads, dams, and levees in good order. Now the feds just supply sinecures.
Then there is the moon program, of which the ability to do seems to have come and gone.
Well… merry Christmas (belated) to you you anyway, doc!
@ Doombuggy
You’ve hit the nail on the head.
An experiment for any of you who live in an urban or suburban neighborhood:
“Assign” random 17-year-old boys the task of changing a tire.
My bet… four out of five couldn’t do it; wouldn’t have a clue.
Heinlein’s “competent American” lives in my memory and (hopefully) yours… but in this brave new world of the Age of Bushbama, unless you’re a wizard or a vampire… fagetaboutit!
Folks… we are literally watching our country – our People – crumble around us.
While I’m looking forward to the king crab legs and Macallan on New Year’s Eve… I’m not looking forward to the new year itself.
As Tiny Tim offered, “God bless us – everyone!”
When I was a teenager, my father owned a golf driving range. My chore when I came home from school every day was to paint about 300 of those balls using rubber based paint and gloves. I would rub them in my hand to apply the paint and put each ball on a drying rack which had three small nails for the balls to sit on. We had a total of about ten thousand balls so it took all winter to finish. Once I was finished painting, I could go out to play ball. In the spring, I had the additional job of changing the storm windows to screens. We had 67 windows in our house, including the second story. All windows were marked with a number, identical to a number on the frame, to tell where it went. Of course, I had the reverse job in the fall. My kids may have wondered why I preferred to live in California instead of Chicago.
My oldest son has reminded me that he had chores to do with the boat and that is fair enough. I had a boat skipper who was supposed to move the boat up and down the coast before and after races. Mike usually got stuck with that chore and I didn’t realize it.