The collapse of the dollar

[country_boy]

Originally Posted by 1776-1976

What goods today are of better qaulity today than before? The most basic of automobiles all the way into the mid to late 1960's were of much higher qaulity than even the top of the line automobiles of today. The furniture was made from real wood not out of the partical board and plastic todays furniture is made from. A stereo or television came in a nice wood cabinet unlike the plastic and partical board todays intertainment systems come in. Ive seen houses biult 100 years ago with wood that is in better shape than houses biult just 20 years ago so the houses were better made also. The firearms were also way better biult than firearms of today. Gas was much more potent and had a higher octane rateing than even the supreme grade gasoline has today, food was fresher since it was not filled with preservatives and shipped from another country, Soft drink tasted better and came in a glass bottle and tasted much better. This list could go on and on. The fact is that goods are of far lower qaulity today than they used to be so we have not advanced in improveing products but rather figured out ways to make them cheaper and faster at the expense of the consumer.

My biggest problem is with the made in china brand. From a cabinet builder's advice your correct about a piece of furniture being made from particle board is cheaply made. Now I have a question: if items and fuel were still made like they use to be, would you be willing to pay the higher price for those items?? Also, you can still get well made furniture from me, but like I said it comes with a big price tag. Secondly, some items to me are better than they use to be are tools. Technology has really helped the military. Some items and gas are made cheaply. Like you said. I completely agree with you on houses. They are way over priced and not built with quality. Your correct about produce, my uncle grows fresh vegetables and fruits. But then again, have to make more time for fresh produce.

[NewTxn]

Inflation is not rising consumer prices. Rising prices are an effect of inflation.

Inflation is the increase in the money supply. When there is an increase in the number of dollars chasing a fixed quantity of goods and services, the prices of those goods and services will rise. When new money is created those that receive the money first(not you) get the benefit of using it on goods and services at the lower prices. By the time any of that new money gets to you as a pay raise, stimulus check, etc. prices have already risen and your net purchasing power will remain largely the same. (if you're lucky)

1776-1976, this book should answer all of the questions you have and then some. For the record I don't necessarily agree with everything in it but the explanations of the financial system and monetary policy are spot on. The best place to get it is by calling 800-686-2237. You'll get the book for 25 bucks but they also give you a free silver dollar from the 1920's with it which brings the cost of the book down to about $10.

[oldguy]

Now I have a question: if items and fuel were still made like they use to be, would you be willing to pay the higher price for those items??

Yes Sir, If I could purchase items made in the USA I would, junk appliances, toasters,coffee pots, can openers, pure junk, the American consumer has become so accustomed to garbage they don't know the difference. Most products the average Joe purchases comes out of China, and unless we begin to manufacture and sell products you can kiss the middle class goodbye. Within 20 years or less if we continue on this road of outsourcing,importing cheap under educated labor America is finished with the quality of life we have enjoyed past 50 years, a consumer society based on garbage from China cannot in the end work, at some point you will have college educated labor competing for jobs at WalMart and Home Depot. The reality is sometime you cannot educate yourself enough if you have leaders who are ignorant.

[MadMo44Mag]

Originally Posted by NewTxn

Inflation is not rising consumer prices. Rising prices are an effect of inflation.

Inflation is the increase in the money supply. When there is an increase in the number of dollars chasing a fixed quantity of goods and services, the prices of those goods and services will rise. When new money is created those that receive the money first(not you) get the benefit of using it on goods and services at the lower prices. By the time any of that new money gets to you as a pay raise, stimulus check, etc. prices have already risen and your net purchasing power will remain largely the same. (if you're lucky)

1776-1976, this book should answer all of the questions you have and then some. For the record I don't necessarily agree with everything in it but the explanations of the financial system and monetary policy are spot on. The best place to get it is by calling 800-686-2237. You'll get the book for 25 bucks but they also give you a free silver dollar from the 1920's with it which brings the cost of the book down to about $10.

*** IMO every American needs to read this book***
I don't agree with everything in it, but it sure does help you understand the banking system and how government uses it to their advantage and your disadvantage in most cases.
The government has no money, until they spent it!

[drj3828]

The real problem is that everybody is trying to out do every body else. One person gets a new car down the street the next person has to have a better one and so on. I live in the country and pull a trailer with a 4200lbs tractor and use a half ton pick up, you go to bigger towns and see 1 ton trucks all fixed up and they never pull a trailer except a jet ski one, plus most of the time they can't even back it up. Also another problem with the American people is they are Spoiled rotton they have to have every thing and most of the time they don't realy need it. If they don't have the cash to buy it they use a CC to get it.
My neighbor up the road grips about the price of diesel all the time, he has a 1 ton single wheel four wheel drive pick up and never has even put it in four wheel drive much less pulled a trailer, and drives 60 miles to work one way. Do you think he realy needs that kind of truck? And he also grips about the reg cost every year and the price of tires for it, but get this he has those 22" mud grips on it.
If people would just live with in there means they would be better off.
That is my two cents on the matter so flame me away!

DRJ

[zembonez]

Originally Posted by DCortez

I'm very concerned about taxes, inflation, and higher interest rates with Obama in office.

+1 bazillion.

Anybody NOT concerned is asleep at the switch.

[zembonez]

Originally Posted by drj3828

That is my two cents on the matter so flame me away!

DRJ

I won't flame you but I will disagree a little. Sure, being one of the wealthiest nations on earth affords us some luxuries that are not available elsewhere. Some people DO push it to the limit and some go way way overboard, but that in itself has little to do with the financial issues we as a country are having now.

Spend more than you make in ANY situation (regardless of who you are or what it is you are buying) and it is a slow but sure financial death. That is exactly what our government has been and is doing to us right now. They call this thing that they pass yearly a "budget" but it is anything but. "Budget" implies that you are living within the amount of income that you actually have coming in. What Washington does is arrive at a number that satisfies all of the welfare and pork they want to spend money on (regardless of how much is not coming in) and then "budget" that much money for it. It's killing us.

But nobody is willing to do anything about it.

[NewTxn]

Originally Posted by MadMo44Mag

I work and pay tax's so those that do not wish to work, can stay home and reap the benefits I have worked for and will never see.
I bought the house I grew up in my folks paid 10k for in 1962 - it cost me in 2005 51k - same house very few improvements over the years.
To me this shows the value of the dollar has greatly declined.
Same house - different value attached to the dollar!

One of the best illustrations of inflation I know of is gas prices.

In the early 1960's a gallon of gas cost about 25 cents. Right now a gallon of gas is about $2.40-$2.60 the last time I looked. Most would see that as the price of gas going up by a factor of 10 but that isn't entirely correct.

The quarter used to buy that gallon of gas in the 60's contained about .18 oz of silver. That quarter today is worth about $2.42 which will still buy you a gallon of gas. The price of gas in terms of real (Constitutional) money isn't going up. Your purchasing power is being stolen from your money as it sits in your wallet or savings account.

[Texas1911]

Originally Posted by NewTxn

In the early 1960's a gallon of gas cost about 25 cents. Right now a gallon of gas is about $2.40-$2.60 the last time I looked. Most would see that as the price of gas going up by a factor of 10 but that isn't entirely correct.

The price of gas has nothing to do with inflation since the price of crude is fixated on the dollar. If it were sold in another currency then the valuation of the dollar would apply.

The price of gas has everything to do with market conditions. In the 1960s you didn't have an emerging Chinese super-economy that is putting 1 billion Chinese on the road. You also didn't have a ton of people investing in crude, because it was not profitable.

Just because something goes up in price does not mean it is inflation.

[NewTxn]

Originally Posted by Texas1911

Just because something goes up in price does not mean it is inflation.

I couldn't agree with you more.

The examples you gave about China and oil speculators are supply and demand issues. Supply and demand is always the driving force behind changes in prices. All prices are is a measure of the desirability of one item/commodity in relation to another. This is very much affected by the relative scarcity of any one commodity.

Prices are affected by inflation of the money supply through the same supply and demand principles. When the Fed prints more fiat currency gasoline becomes more scarce in relation to dollars, therefore driving the dollar price of gasoline up.

My silver quarter illustration was simply an attempt to show that rising prices are an effect of inflation, not inflation itself. The silver price of gasoline has remained relatively stable since the 60's. The dollar price of gasoline has not. The problem is not vendors jacking up prices. The problem is our MONEY.