It's a bursting balloon, not a rotting orange. Same thing.
First, read this. Can’t be bothered? To summarize, a year ago we questioned the convention of quoting the price of gold in terms of dollars, instead of the other way around. After all, gold is more stable and less subject to manipulation than money that the Federal Reserve creates out of ether.
Back then, the U.S. dollar traded at 29.65 milligrams of gold (Aumg.)
Federal Reserve chairman Ben Bernanke, the closest thing we have to a pure autocrat in the modern world, assures us that the dollar’s value is strong and its purchasing power uncompromised. After all, inflation has been negligible over the past year, right?
Measuring yesterday’s devalued dollar against today’s is one thing. Measuring it against gold is something different. Today, the dollar’s trading at 21.77 Aumg. At the rate we’re going, another 3 years and the value of the dollar will be eradicated.
Here’s some more currency value fun. It’s an updated chart from that 2009 post, with a bonus row for our longtime readers:
| October 2009 value | Value today | |
| € | 44.18 | 30.19 |
| £ | 48.15 | 35.08 |
| yen | .33 | .27 |
| Swiss franc | 29.14 | 22.52 |
| Mexican peso | 2.26 | 1.78 |
| renminbi | 4.34 | 3.27 |
| Russian ruble | 1.01 | .71 |
Yeah, inflation’s nothing to worry about. Neither in the United States nor around the world.
Go out today and buy a hard asset. Or two.
**Featured in the Wealth Builder Carnival #16**
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I stopped buying physical silver when it hit $13/oz, felt it was too expensive then. Ha. Been a nice run the last few months, hoping for one more buying chance on the next major crash, expecting it to be the very last time people run out of hard assets into treasuries. Then is all downhill from there. Game over.
Interesting dilemma…like how the metal in the penny is not worth a whole cent anymore. I guess as long as people continue to believe in the money system, then all will be fine.
Amanda, if you want to be our most pessimistic commenter, you’re going to have to try really hard to beat BD.
It’s almost as if we have a Bizarro Fed Chairman, with strict orders from his interplanetary overlords to set in motion the destruction of the economy he’s been entrusted with.
I never thought about it ‘the other way around’.
I hate myself for not buying any gold or silver. I hate myself for buying some garbage stocks. Since inflation will never be a problem, I will just keep all money dollars in a little pillow case in the closet. I will be all set…
It is just scary when you think about the fact that poor forethought with regard to our fiscal policy, our government could effectively devalue the very dollars we sweat to earn and scrimp to save.