{"id":34466,"date":"2018-05-22T19:04:42","date_gmt":"2018-05-23T00:04:42","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34466"},"modified":"2018-05-22T19:04:42","modified_gmt":"2018-05-23T00:04:42","slug":"americas-long-term-challenge-3-destruction-of-the-currency","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34466","title":{"rendered":"America\u2019s long-term challenge #3: destruction of the currency"},"content":{"rendered":"
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America\u2019s long-term challenge #3: destruction of the currency<\/a><\/h3>\n
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On April 2, 1792, George Washington signed into law what\u2019s commonly referred to as the Mint and Coinage Act.<\/p>\n

It was one of the first major pieces of legislation in the young country\u2019s history\u2026 and it was an important one, because it formally created the United States dollar.<\/p>\n

Under the Act, the US dollar was defined as a particular amount of copper, silver, or gold. It wasn\u2019t just a piece of paper.<\/p>\n

A $10 \u201ceagle\u201d coin, for example, was 16.04 grams of pure gold, whereas a 1 cent coin was 17.1 grams of copper.<\/p>\n

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The ratios between gold, silver, and copper were all fixed back then.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

But if we apply today\u2019s gold price of $1292 per troy ounce, we can see that the current value of the original dollar as defined by the Mint and Coinage Act of 1792 is roughly $66.75.<\/p>\n

In other words, the dollar has lost 98.5% of its value since 1792.<\/strong><\/p>\n

What\u2019s incredible about this constant, steady destruction of the currency is how subtle it is.<\/p>\n

Few people seem to notice, because modern day central bankers try to \u201cmanage\u201d inflation between 2% to 3% per year.<\/p>\n

2% to 3% per year is pretty trivial. But it happens again the next year. And the year after that. And the year after that.<\/p>\n

After a decade or so, it really starts to add up.<\/p>\n

But there\u2019s an important, other side of the equation: income.<\/p>\n

Costs are clearly rising. And it\u2019s fair to say that incomes have been rising too. But which one has risen more?<\/p>\n

In 1982, back when I was a toddler, the price of a Ford Mustang was $6,572. Today the cheapest Mustang starts at $25,680 according to Ford\u2019s website.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

America\u2019s long-term challenge #3: destruction of the currency On April 2, 1792, George Washington signed into law what\u2019s commonly referred to as the Mint and Coinage Act. It was one of the first major pieces of legislation in the young country\u2019s history\u2026 and it was an important one, because it formally created the United States […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[951,20218,303,426,536,7312,7313,827,3650],"class_list":["post-34466","post","type-post","status-publish","format-standard","hentry","category-economics","tag-currency","tag-currency-destruction","tag-fed","tag-inflation","tag-money","tag-simon-black","tag-sovereign-man","tag-united-states","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34466","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34466"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34466\/revisions"}],"predecessor-version":[{"id":34467,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34466\/revisions\/34467"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34466"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34466"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34466"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}