Quote:
Originally Posted by jamesqf
The US had a gold standard, then FDR made it illegal for Americans to own gold (except as jewelery). As for stability, look at the price of gold since the '70s, when it became legal to trade in gold. Stable? Not hardly. There have been wild price swings like '78-82, when it rose fourfold, then dropped by half.
|
Yes - that was the last period of double digit inflation and a dollar that had declined in value. Once the government starts printing more money and there is loss of confidence in the fiat currency, gold prices "go up" (but only relative to what the paper fiat currency is worth) because that paper buys less and less of everything, including gold.
Quote:
|
But the price of food hasn't gone up significantly over that period (at least going by my shopping cart index, which admittedly contains little if any processed food). If anything, it seems to have declined a bit. Or at least meats &c seem cheaper than they were before then.
|
Surely you must be joking! In just the past few year food prices have doubled or tripled. (But why should I be surprised. People have very short memories when it comes to prices.)
Quote:
|
Gas, of course, is a different animal. The price increases aren't being driven by inflation or changes in currency, they're driven by supply & demand. Basic economics: increase demand for a product in limited supply, and the price rises.
|
And you omitted the flip side of the equation, which is that of limiting the supply to drive the price up. Those sweethearts at the old OPEC cartel know how to do that very effectively.
Quote:
|
There's inflation which is not devaluation, prices going up (or coming down - checked housing prices lately?) that have nothing to do with the value of the underlying currency.
|
That's called a market bubble. I chuckle when the phrase "value added" is used. My house is supposedly worth four times what I paid for it 25 years ago. However it is the same house. The increase in the current price of it is due to an increase in
price, not an increase in
value. The difference in the estimated value is all the result of inflation. And we are now taxed according to that estimated valuation, so the higher the assessed valuation is, the more tax you will pay on owning it.