i can put the statistics back up there…i dont know if they are true.. or how accurate they are. crockwell seems to use them sometimes.
i saw wage info that said the average hourly wage was 13.50 per hour in 1999 and is now over 18.00
the cpi calulator i used said that an item purchased in 1999 for 13.50 would now cost 17.42
if the averge hourly wage was less than 17.42 i would think oh geez…bad news…but the hourly wage increase was greater then the cpi increase. that would seem beneficla to the little guy? the average hourly wage earner?
when was what has govt done to our money written? 196something?
when bad stuff was happening then i guess also
During the 23 years from 1947 to 1970, the median income of American families increased by an average of 2.8% per year. But from 1970 to 1998, the median income grew by only 0.4% per year.
The difference is considerable. If the previous growth rate had continued, the median income in 1995 would have been 90% greater than it was.
What changed in the 1970s?
That was when the government’s control of the economy accelerated
"when prices are adjusted for inflation, Americans today spend '40% less on clothes, 20% less on food, more than 50% less on appliances, about 25% less on owning and maintaining a car’than they did during the early 1970s.
“so if i can find info (way back i guess and likely not very accurate) where fully backed money was doing something empirically better than what we have currently then i would be glad to read it.”
now if 2.8 percent per year income increases were taking place with a federal reserve and then 0.4 percent income increases took place with a federal reserve (but perhaps different reserve ratios at banks) where is the info for fully backed specie?
it doesnt exaclty sound like ill or disease as inflation is described at lrc and mises articles.
unles. the above graph in way indicates that closer to fully backed reserves would yields better results. but i am not sure if money increases then were a greater percentage of the existing money supply.
On August 15th, 1971 President Nixon announced the end of the convertibility of the dollar into gold in this speech. It is probably no coincidence that the growth in real incomes dropped considerably when we went from a gold backed currency to a fiat currency – pieces of green paper with pictures of dead presidents.
Hasn’t anyone here read Thomas Sowell? The drop in family incomes is a result the massive increase in families during that period. The sample is not constant. For example, if your parents each make 100,000 and they are married, the average family income will be 200,000 but if they get divorced, average family income drops to 100,000. Its strange that people almost exclusively cite family income when doing these sorts of statistics.
As far as I know, individual income has remained “on trend.”
i have read some of thomas sowell. but why would family incomes drop if the families are productive?
wasnt immeditaly after the war the biggest population boom that occurred when harry brown says incomes rose at 2.8 percent per year. would a divorced family count as two families?
wasnt gold bullion ownership outlawed in some form until 1973?
was every dollar backed by gold? i thought it was gold a gold exhange standard which was quite different from 100 percent specie backed notes. so i was told.
There was economic growth, but it was not spectacular after 1973, when real wages grew stagnant for two decades. The stock market did not outperform general economic growth.
i dont know how much this supports the above chart.
but still…were real incomes, family and otherwise were growing at a faster rate than after the nixonish era?
and still, there was a federal reserve, bank reserve ratios and only partial gold backing (as i read) up until the 70s…then there was still the federal reserve and lower reserve ratios, so i read, and less income growth… i think.
but where is the data that shows empircal improvement for fully backed reserves and gold/silver money?
does a system closer to fully backed reserves give better results (as the chart says family incomes delcined the more fiaty things became)?
There was economic growth, but it was not spectacular after 1973, when real wages grew stagnant for two decades…
was 1947 to 197nixon a better for all wages than after 197nixon according to available stats, iow?
and if things improved in the 1990s with
"The Depository Institutions Deregulation and Monetary Control Act of 1980 had begun phasing out interest-rate ceilings on deposits and modified reserve requirements in complex ways. Combined with subsequent administrative deregulation under Greenspan through January 1994, these changes left all the financial liabilities that M2 adds to M1 — savings deposits, small time deposits, money market deposit accounts, and retail money market mutual fund shares — utterly free of reserve requirements and allowed banks to reclassify many M1 checking accounts as M2 savings deposits. M2 and the broader measures became quasi-deregulated aggregates with no legal link to the size of the monetary base."
I have been following this thread and I have to say that I feel that the point of those who say that inflation doesn’t matter if nominal wages rise at the same rate. This does not mean that their point is correct; it is not. But I have not seen the answer I have in this thread, save for one post that was very short, and, I think, ignored. The answer is not merely one factor; it is a mixture of various different effects of inflation that will be manifested even if wages and prices rise at the same rate, or even if wages exceed the rise in prices, such that we are better off.
The first point has been raised over and over again: savers would be wiped out unless they had very good interest rates. Considering that central banks drive the rates downward, the saver will be a total loss. The only way to stay at the same level of wealth is to seek out riskier investments that have a higher rate of return. Instead of money in a bank, you will see people with money in real estate, in stocks, in bonds, etc. Not all people will do this; there are those who are unaware of what inflation is, and they will be wiped out. Their life savings will deplete in value during retirement, making them worse off. They will find that business they wanted to open needs more capital than they have, simply because it has been sitting there for some time. There is a drive to spend and consume over and above what there would be in more normal conditions.
There is also the redistributive effects of inflation. If all of our money everywhere lost the same amount of value, and we got a check to replace it, it would be pointless. What it does is take from all to give to those who receive the newly printed money first. The market has not adjusted to the new money, and so the new money will distribute the wealth around.
There is also the fact that inflation defeats the increases in productivity that would have had a greater effect, but I am out of time and will have to elaborate on that point at some other time (darn doctor getting in the way!)
if you were alive to see your dollar lose 95% percent of its purchasing power and not receive 95 percent more dollars it would really matter…and may still matter to some even though they do have 95 % more dollars.
when i first stared reading mises and lrc sites the inflation term was usually preceded by a negative adjective saying how it robs people of their wealth, so i begin to look to see where?..but if inflation also adds more dollars to the extent that it takes away value from individual dollars, i can only assume that the people writing were truly lying about what they knew.
and for that i feel they should pay.
historically, inflating paper, so i have read, on top of metal specie may have really caused problems for many.
creating numerous instances where a difficult life was made more so by govt money manipulations.
my belief at this point is that gold and silver, with modern technology and fully backed could get gold and silver invested to those who desire money for productive use.
you are not fully compensated for the governments inflation in more paper money. why do you think the government would have motive to do it if it didn’t leech from you to them. ? or maybe you think of boom and bust as compensation…
i have posted on several occasions where prices have declined for many goods (adjusted for inflation).
goods are being purchased, produced and economic forecasting takes place for new goods - all with an inflated fiat currency - so i have been told.
if the prices for many vital goods have declined adjusted for inflation that would indicate to me that even if the new dollars are of less value there are more of them (dollars) for people to have.
as a consumer, when prices decline i find that a good thing. especially when additional profits are made and prices decline.
if the interaction between govt inflated currncey as it now is and the consumer stil benfites govt and bankers far more than the wage earner…well, i would advocate for a return to a sounder money that wouldnt allow for such…or at least a market money not propped up by safe govt officials.
if you scan back up the thread i posed several info links where prices were on steady downward paths over the decades - adjusted and perhaps in spite of govt currency inflation.
I think it definitely hurts some people. In fact, I think it hurts most people. A lot of the reasons have already been explicated in this thread. Inflation adds an element of risk and uncertainty in everyone’s lives. A bedrock solid money anchors an economy and allows people to more accurately estimate the future costs and benefits of decisions they make today. Who wants to build the foundation of their business or their lives on the shifting sands of money that will lose value, but who knows how much value will be lost, or when? It’s all dependent upon what the magicians behind the money making screen (aka the Fed) decide to do.
Taxpayers, the workers who build and sustain a society also lose. If the value of the money they make goes down, they lose even if they get enough extra back to make up the difference. They are then pushed into a higher tax bracket, which is based on the nominal value of the money they earned, NOT on the real value which theoretically would have stayed constant.
But people almost never receive an increase in salary commensurate with an increase in the cost of living on a real time basis. There is always a lag time and they often have to fight for it. They need to haggle with their boss &/or hunt for a new job with a higher salary to force the issue. Or unions have to go on strike which also disrupts the economy.
Economies adjust in a free market, but there is a real and a considerable cost involved. Things would go much easier and more smoothly if there is a stable money that can be counted on as a store of value for the work and the savings of the citizens.
People who are savers are the ones who have the most stolen from them, however. Older folks especially tend to be people who have saved up their whole lives for their retirement and may have much of their money in savings accounts, CDs and municipal bonds etc. Many rely in the income they receive from those investments to supplement their social security. When inflation hits double digits as it has done several times already in our country, or even higher single digits, their savings are being eroded in a big way. Actually, saying that the value of their hard won savings “is being eroded” is too kind. Not long ago a politician proudly proclaimed that “Now, we’re all Keynesians”. Here’s one of Keyne’s quotes:
“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
Now here it sounds like you are taking the exact opposite position that you took in the first paragraph, and the ideas you expound upon below. I’m rather surprised that you accuse these people of lying and “feel they should pay” on such flimsy evidence. To my mind, “lying” requires the following 3 factors:
They have to say/write something that is false.
They have to know that it is false.
They have to be trying to deceive someone when they say it.
If any of the above factors is not in place, then I don’t think it is a lie. In order to accuse someone of lying, to do it publicly and to say that they should be punished for it I would hope that someone was very sure indeed that all 3 of those factors were in fact true.
I doubt you were thinking of me when you wrote that since I’m new on the board and you probably hadn’t seen much if anything I had written, but I personally think the very first factor listed above does not apply in this case, and if that one is not true none of the others is likely to be either. I think inflation is a bad thing and I’ll bet that most other people do as well, including most economists and politicians - even the ones taking the actions that help foster the inflation they rail against.
The IF in your above paragraph above is a mighty big one and your whole argument rests upon it being true, and I don’t think it is.
I believe that is true.
Thanks for the links, but they aren’t working for me.
Isn’t it true that the people who are really hurt by inflation are the people who have a lot of money saved?
I mean, the average worker, whose wages presumably move up with inflation, isn’t going to care as much as the person with a little wealth stashed away.
Doesn’t inflation have a greater negative effect on savers than anyone else?
I’m not trying to disprove anything you’ve said here, I’m just asking for your thoughts on this."
you tell me dumbass. oh wait, i meant pathetic liar masquarading behind a flimsy game claim.
anyway… i am not exactly sure. if they are getting more dollars, albeit weaker one to go into savings i wouldnt be able to say.
depends on what the little wealth stashed way is. uranium mine share…may shoot through the roof?pathetic.
does inflation have a negative effect on the saver more than anyone else? i dont save all that much to know. unless you are doing something deliberately to harm the saver, as you call them.
It seems you’re being distracted by statistics and numbers that can’t be used to prove the point you’re defending. (It’s just not that simple.) I think it’s fairly obvious that you aren’t familiar with the Austrian theories or methods, so it’s no surprise that you don’t agree with the end conclusions.
(By the way, are we spending less on health care or has extreme government meddling raised those prices? Not to mention taxes… Cherry picking industries to show progress is no better than dishonest statistics.)
Try thinking about it this way - which seems more likely to cause “real” prices to drop?
Currency manipulation and inflation (the negative distortionary effects of which have been explained earlier in this thread and are in many, many books)-- “printing” new dollars and distributing these dollars exclusively to special interest groups.
or
Advancing technology, new capital, scientific advancements, a smarter and more skilled workforce, increased global trade, and the improved productivity that comes along with these things.
Which makes more sense?
(There is also the possibly massive factor of the Asian/US dollar dynamic which allows us to over-consume at the expensive of poorer people paid in funny-money which they’ll probably never see, or being screwed over by their government’s policies – but this is only possible of course because of the dishonest currency practices in the first place.)
This is pretty basic “classical” economics stuff here.
Playing games with currency (as demonstrated in the link above) is generally going to impede progress. In extreme cases (hyperinflation) it prevents progress entirely, that’s not just a coincidence.
You’re going to need to read some books about the subject from this website with an open mind (how many have you read so far?); it doesn’t seem that a discussion on this forum is going to satisfy you no matter how good an answer you get.