We’ve spoken at length in these pages about inflation and the vanishing worth of the dollar. The two are synonymous. I pointed out earlier this year:
It’s not that products and services are worth more, and therefore getting more expensive – it’s that the currency we use to buy them is worth less, because it’s becoming depreciated … The US government, over the past year, printed or electronically created over 40% of all the dollars that have ever existed.
There’s more at the link.
In another article, I noted:
The reason house prices, share prices, etc. are all continually rising is that the “funny money” created by the Federal Reserve (the red in the graph above) is funding the increase. More and more empty, valueless dollars, created out of thin air without any underlying economic value, are chasing whatever they can buy that does have economic value. That’s the very definition of inflation: more money chasing the same amount of goods. What happens when all those “funny money” dollars are exposed as having no underlying economic value, and therefore become monetarily valueless? Just look at how much the dollar has declined in value over the past century or so. Expect an even greater collapse in the not too distant future, as the Fed’s economic chickens come home to roost.
Again, more at the link.
Now Aesop brings his own perspective to bear on the issue, and does so very well.
IOW, in real commodity-based pricing, your dollar is worth exactly 50 times less now than in 1913. That would be…2¢. Color me shocked. Gold, chocolate, coffee: all confirm the data … Your real wages, IOW, have slipped nearly 40% because of just inflation in the last century. You’re making less actual money, and everything is costing more inflated dollars to buy. And it doesn’t last as well.
. . .
$26.14 is now supposedly worth $1. But $1 is worth 2¢. To have the same $26.14 as you had in your pocket in 1913, you’d need $1307 in dollars right now. Or $2407.69 in gold. That’s 5000% cumulative inflation over a tad more than a century. It’s about 4% annually, every year, forever, compounded. And bear in mind, the government pays no taxes on inflated dollars. You do. Put another way, your dollar bill from 1913, when it was gold-backed, should now measure 18 inches high and nearly 4 feet long, because that’s now much it’s been inflated. That’s a beach towel. If you wanted to know how much it’s shrunken in value, it should measure 1/10″ tall by not quite 1/4″ long.
. . .
That’s how you get to 100 trillion dollar banknotes. Because a $50 [bill] today … is a $1 from 1913. And we’re headed for it being [a] $100 bill, soon. Long before you get to $100 trillion, the paper and ink are worth more intrinsically than their actual face value. Hence the toilet paper and kindling stage.
. . .
I say yet again, BRACE FOR IMPACT. Because the first time the US economy hiccups, the whole house of cards comes all the way down. Look what one sector eating it did to us in 1999 or 2008. Now imagine that with everything, simultaneously.
I wish I could disagree with Aesop, but I can’t. I think we’re poised on the precipice of an almighty economic hiccup, and I can only pray that we don’t make this sort of landing (thanks for the link, Aesop!) at the bottom.
We won’t recover from that economic landing nearly as well (or as often) in the real world as Wile E. Coyote does in that cartoon.