UltragigagiganticSomebody do something. Somebody?
BeatTakeshi
WTF Happened In 1971?
https://inflationdata.com/articles/2022/08/10/u-s-cumulative-inflation-since-1913/ "I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop." - F.A. Hayek…
Clay_pidginWhat’s the answer?
yboutrosEnd of the gold standard.
Before, if you didn’t get a raise, the minimum wage would at least keep up with inflation since it was tied to gold
Before, if you didn’t get a raise, the minimum wage would at least keep up with inflation since it was tied to gold
That’s…just not true at all. Commodity based currency is just as prone to inflation as fiat, the only thing it does is introduce volatility to your currency if the commodity market faults.
Gold does not have a definitional inherent worth, meaning if the government wants to “print” more money while on the gold standard, they just change the monetary value of gold, as Roosevelt did in 33’
In the United States, prior to 1933 for example, $1 meant 1/20th of an ounce of gold. In 1933, in the depths of the Depression, President Roosevelt redefined $1 to mean 1/35th of an ounce of gold. That is, a $1 bill was now worth less gold, about 60% less. In other words, the government was able to expand its supply of paper bills by 60% without changing its reserve of gold. This single act resulted in a significant decline in the purchasing power of paper money and shows how it is possible to generate inflation even under a gold standard.