50 Years of Purchasing Power Erosion
Think that dollar in your pocket is valuable? Might reconsider that assumption now.
50 Years of Fiat
There’s been many references to the year 1971 over the past week...Sunday, 15 August was the 50th anniversary of the U.S. Government taking the currency off the gold standard.
On that Sunday, during the Primetime show Bananza, President Nixon "temporarily" suspended the convertibility of the US Dollar into Gold. This move came amidst pressure from foreign nations demanding their gold reserves back from Fort Knox, namely France and Great Britain.
The Nixon administration knew they couldn’t give foreign nations their gold back because the US printed way more fiat dollar currency than it held in gold reserves.
The removal of the Gold Standard brought an end to the Brenton Woods system that defined the monetary order following WW2 and ushered in the era of Fiat Currency.
This radical economic experiment has perpetuated time-theft (we exchange our time and energy for currency working in jobs we probably despise) on an unprecedented level. With sound money, that time and energy is stored and not eroded away. With fiat currency printed out of thin air, our time and energy storage (the currency it’s stored in, including retirement accounts held in stocks and bonds) becomes worth less and less!
The chart below shows the relationship between productivity and compensation. As you can see, as soon as a sound money standard is departed from, compensation stagnates while productivity continues to increase.
This chart is just one of many charts on wtfhappenedin1971.com highlighting the negative consequences of coming off the gold standard. Sadly the working man got screwed!
The timing of this anniversary couldn't have been better...fifty years later and we see the catastrophic effects of a soft money system, while also seeing the effects of what happens when a fragile system is left to its environment (e.g., Afghanistan withdrawal).
Prices are increasing across the board; quality of life, food, and art are all depreciating. This is because there are so many more Federal Reserve Notes (fiat dollar bills) circulating in the economy chasing the same (or more likely even less) goods and services in the economy.
Without pegging a currency to a scarce asset like gold, the government can print as much “money” as they want to fund whatever they want.
The question is, who pays for this? The PEOPLE do. You do. Your spouse and kids…they pay dearly.
Instead of raising money through taxation to pay for government expenditure, the shadow tax of inflation quietly steals the work, time, and wealth accumulated through productive members of society.
Losing wealth through monetary debasement by governments has far-reaching consequences that corrupt the morals of society, not just the pockets.
Fiat currencies (such as the Federal Reserve Note/U.S. dollar) that are prone to debasement shorten the time preference of the individual.
Time preference is the relative trade-off between satisfying a want in the current moment vs. holding off for the long term. In other words, "short term vs. long term thinking."
As a currency experiences debasement, individuals within the society shorten their time preference, causing them to prefer the now instead of the future.
Low-time preference ultimately manifests into a society that prefers drinking and partying (bread & circus) over starting a family, watching TV (bread & circus) over reading a book, and spending their “money” (on bread and circus) over saving it.
Luckily, we have a weapon in our arsenal that seeks to defend the homefront - Liberty Accelerator Program TAPS. The public is beginning to awaken to the Fiat atrocities that seek to siphon their hard-earned wealth...the military family must do the same!
On Sunday, #wtfhappenedin1971 started trending on Twitter, following tweets from prominent Bitcoiners and individuals like Jack Dorsey.
The tide is beginning to turn as more and more individuals exit the Fiat Matrix and begin positioning for an uncertain future.
Governments and central banks have laid all their cards on the table… the currency (“incorrectly referred to as ‘money’”) printing cannot, and will not, stop, which continues to harm ordinary people disproportionately by eroding their purchasing power.
If the “money” printer stops, it is very likely the dollar, the credit system, and the global economy come to a grinding halt, and the stock and bond markets crash.
Sound money is the obvious choice for anyone looking to get ahead. As central bankers destroy the dollar and steals your hard earned savings and wealth, hard money, with a truly scarce supply, will be acquired out of necessity. There’s many ways to get hard money. I discuss some.
Economics demands an equalibrium be reached between the amount of currency and the amount of goods and services in society. I cover this on my YouTube Channel in the Liberty Accelerator Program.
The wealth gap continues to increase as the middle-class savings evaporate due to the invisible “inflation” tax of reduced purchasing power as the fiat dollar is debased.
So, are you open to Liberty? If so, defend against the domestic threat.
It’s real, and its in your home.
The fiat currency, and any financial products measured in it, are risks to your stored wealth.
To your Liberty…against all enemies, especially domestic ones.
Assume it’s guaranteed, Liberty, that is?
Remember, assume means making an A$$ out of U and Me. Don’t do that.