Hi Johnyb26 and all, You are trying to tell me and others that...

Hi Johnyb26 and all,

You are trying to tell me and others that paper money is a better bet than physical Gold.

I don’t wish to be seeing to be cherry picking but we do need to start at some point so how about 1913 the same year that the USA introduced income tax and the Federal Reserve Bank.

The Gold price in 1913 was I’m told US $18.92 and the new FED printed paper dollar was indeed worth one dollar. By the way in 1913 Ford was paying blue collar workers $5.00 per day or $25.00 per week. A smart move on Mr. Henry Ford’s part as his employees could also be his buyers.

So a Ford assembly line worker could if he wished buy an ounce of Gold with one weeks after tax wage of paper dollars.

Now as I understand it and please feel free to argue and provide evidence otherwise; that the purchasing power of the paper dollar since 1913 has dropped by some 96%. I provide a link giving some US prices for food items in 1913 / 23.

http://www.foodtimeline.org/MLR1923.pdf

Moving right along to 2015; what’s left of it and where are we; well apparently I see we still have Ford workers in the USA and please see the link provided for July 2015 rates. A guy on the shop floor earning in the higher range of say $35.00 P.H. for a 40 hour week can still afford to buy an ounce of Gold once he has paid his income tax and health benefits.

http://www.payscale.com/research/US/Employer=Ford_Motor_Company/Hourly_Rate

I put the labour part in just because it’s interesting. However; my main point is that Gold has moved from 1913 @ US $18.92 and today as I look it’s showing US $1,070.00. So since 1913 the price of Gold has risen by a smidgen over a factor of 56 whilst the 1913 paper dollar has lost around 96% of its purchasing power. Anyone buying Gold in 1913 for his grandson to sell say in 2011 (or even 2015) would have little need of a loan to obtain a decent education even at current USA fees.

I don’t have links for costs back in Roman times but it is often quoted that back 2,000 years ago one ounce of Gold could buy a decent toga and sandals or the suit of the day as it can today.

I’m sorry Johny even though you admit you struggle with your comprehension I just can’t make it any easier for people to understand how Gold protects ones purchasing power. I believe the years between 2011 and say 2016 will one day mean very little.

The amount of new debt and money created in the few years since 2008 so far has not shown up in inflation; however, maybe once they double or treble their efforts we might start to see the Zimbabwe effect. You can always look at the Japanese model for a guide as they are some 25 years into the process and their stock market only needs to go up 100% to reach the level it held in 1990!!!

Just to end following is a link to paper currencies that where once in daily use but are now defunct, you may want to make a sandwich and get a drink as you read through the list.

http://ask.metafilter.com/20059/What-are-some-examples-of-obsolete-currency

Cheers and very best regards: Andy