What gives paper money its actual value - lol

[PRB]

Yes they do keep up with inflation. Inflation has only been like 2 or 3% per year so anyone who says 10% isn't thinking very clearly.

So national inflation association is full of shit? People who say hyperinflation is coming are alarmist and paranoid?

A young person should actually be keeping most of their savings invested in stocks but that's for another thread.

Why not GOLD!!!!!!

Really your goal should be to be getting returns that significantly beat inflation. I-Bonds and other bond products will match inflation over time at least.

I don't think anybody disagrees there, but I think many are hoping we can prevent and avoid inflation altogether. Yeah, we want to prepare to survive a hurricane or plane crash, but what if we can avoid it?

 

[Zippyjuan]

So national inflation association is full of shit? People who say hyperinflation is coming are alarmist and paranoid?



Why not GOLD!!!!!!



I don't think anybody disagrees there, but I think many are hoping we can prevent and avoid inflation altogether. Yeah, we want to prepare to survive a hurricane or plane crash, but what if we can avoid it?

No monetary system has been able to avoid economic crashes. It happens in all of them. Investments too move up and down- nothing is guaranteed forever on them either. There is no way to either prevent crashes/ price inflations nor is there any way to always beat price inflation.

 

[Ronin Truth]

At a consistent 2%/year inflation rate, prices will double every ~36 years. That gets pretty tough on the fixed income folks. Also none to great also for those with very limited skill sets, trying to keep up with price increases.

 

[brandon]

At a consistent 2%/year inflation rate, prices will double every ~36 years. That gets pretty tough on the fixed income folks. Also none to great also for those with very limited skill sets, trying to keep up with price increases.

Who is truly on fixed income that isn't pegged to inflation though? Even social security has a annual cost of living adjustment, which may slightly lag inflation but at least makes that 2% per year more like 0.5% per year.

 

[Dr.3D]

Who is truly on fixed income that isn't pegged to inflation though? Even social security has a annual cost of living adjustment, which may slightly lag inflation but at least makes that 2% per year more like 0.5% per year.

Me!

My pension hasn't been adjusting for inflation. With inflation, it's like getting less and less money each year.

 

[Ronin Truth]

That's really not a god way to look at it. The average wage back then was $20/week. A lot of those items are relatively cheaper now and it's because of human advancement through capitalism and globalism.

For example back then a weeks pay would only get you 2 women's coats. Now an average weeks pay, which is about $1000 before taxes, could get you 5 really nice coats or 10 cheaper ones.

$20/week was an ounce of gold. Today that would be $1,320/week or $68,640/ year. I could live pretty comfortably on that, with gold backed dollars that didn't lose purchasing power. Relatively cheaper now just further adds to the benefits.

Seems like a pretty good way to look at it to me.

 

[PRB]

At a consistent 2%/year inflation rate, prices will double every ~36 years. That gets pretty tough on the fixed income folks. Also none to great also for those with very limited skill sets, trying to keep up with price increases.

Sucks to be poor, and without valuable skills, what else is news?

 

[Ronin Truth]

Who is truly on fixed income that isn't pegged to inflation though? Even social security has a annual cost of living adjustment, which may slightly lag inflation but at least makes that 2% per year more like 0.5% per year.

All of those folks whose incomes are not pegged to inflation. Now when you add in the bogus understated government inflation figures, it really just becomes a very not funny joke.

 

[Dr.3D]

Sucks to be poor, and without valuable skills, what else is news?

Sucks to be old and unable to do the work like one once did when they were younger. I wish I was able to do the work I used to do, I enjoyed my job.

 

[PRB]

$20/week was an ounce of gold. Today that would be $1,320/week or $68,640/ year. I could live pretty comfortably on that, with gold backed dollars that didn't lose purchasing power. Relatively cheaper now just further adds to the benefits.

Seems like a pretty good way to look at it to me.

Gold was $300 in 2000. So are you saying you'd be OK with $300 a week or $15,600 in 2000?

Is it possible gold is overpriced now? NO, it must be gold was too cheap in 2000.

Something tells me if you were forced to take a 10% pay cut, and everything was cheaper by 50%, gas, rent, interest, gold, you wouldn't be cheering how much you can buy and how much you can save, you'd just complain about your 10% pay cut.

 

[PRB]

Sucks to be old and unable to do the work like one once did when they were younger. I wish I was able to do the work I used to do, I enjoyed my job.

what kind of work was it, and why can't you continue it? Is it too dangerous or labor intensive?

 

[Zippyjuan]

Of course the government COULD mandate cost of living adjustments for everyone- but that would definately be a ticket for the Hyperinflation Express.

 

[Ronin Truth]

Sucks to be poor, and without valuable skills, what else is news?

Sucks to be stuck in a worthless fiat government currency and ALWAYS has been. I've got 2 $100 trillion Zimbabwe currency notes mounted on my wall as a constant reminder about criminal central banks and governments.

 

[Zippyjuan]

Gold was $300 in 2000. So are you saying you'd be OK with $300 a week or $15,600 in 2000?

Is it possible gold is overpriced now? NO, it must be gold was too cheap in 2000.

Something tells me if you were forced to take a 10% pay cut, and everything was cheaper by 50%, gas, rent, interest, gold, you wouldn't be cheering how much you can buy and how much you can save, you'd just complain about your 10% pay cut.

Gold is down by 30% from its recent highs. Must be due to price deflation and a stronger dollar.

 

[Ronin Truth]

Gold was $300 in 2000. So are you saying you'd be OK with $300 a week or $15,600 in 2000?

Is it possible gold is overpriced now? NO, it must be gold was too cheap in 2000.

Something tells me if you were forced to take a 10% pay cut, and everything was cheaper by 50%, gas, rent, interest, gold, you wouldn't be cheering how much you can buy and how much you can save, you'd just complain about your 10% pay cut.

Still better than 2 cent (and getting cheaper) FRNs.

 

[Dr.3D]

what kind of work was it, and why can't you continue it? Is it too dangerous or labor intensive?

Industrial control engineering in the automobile industry. They closed down the plants in my area and rather than relocate, I retired (I was old enough to do so.) That was around fifteen years ago so and I'm of course older now. There isn't anything in the area requiring my abilities. I don't know if I could climb all those stairs anymore either. I feel like I have one foot in the grave and the other on a banana peel.

 

[PRB]

Industrial control engineering in the automobile industry. They closed down the plants in my area and rather than relocate, I retired (I was old enough to do so.) That was around fifteen years ago so and I'm of course older now. There isn't anything in the area requiring my abilities. I don't know if I could climb all those stairs anymore either. I feel like I have one foot in the grave and the other on a banana peel.

so perhaps, if you had relocated, you might've worked another 5-10 years before you retired, giving you some $150-250K, enough for an extra nice house. Thanks for the warning.

 

[Ronin Truth]

Gold is down by 30% from its recent highs. Must be due to price deflation and a stronger dollar.

A stronger dollar is a lot tougher to get to when the Fed keeps cranking out TRILLIONS magically, in new FRNs, from thin air.

No wonder Russia and China got sick of it. I doubt that they are the last.

 

[Dr.3D]

so perhaps, if you had relocated, you might've worked another 5-10 years before you retired, giving you some $150-250K, enough for an extra nice house. Thanks for the warning.

My health was suffering anyway. I doubt I could have worked another 5-10 years so I decided to stay in the area where I have family.

Take my advise. Get a small easy to heat and maintain house, you won't regret it.

 

[buenijo]

Would you say the question of price inflation is meaningless since there is no good way to measure it? What would you suggest as an alternative way to measure price inflation or GDP? Welcoming alternative figures and ways of calculating it. Thanks!

Yes. If something is defined in a cryptic and fluid manner, then any metric derived from the process is pure bullshit. “The first principle is that you must not fool yourself and you are the easiest person to fool.” Richard Feynman

I suggest you check the premise of measuring it at all. Of course, this would never occur to a person trained in "modern" economics. After all, macroeconomics was created to guide policy makers (i.e. politicians). Economists have long been the tools of politicians.