Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have a hypothetical question: Can the financial System (the Fed, Gov’t, IMF, whoever) say that starting ‘tomorrow’ the USD is now, across the board, only worth 60% (example) as much as it was yesterday? I’m really starting to worry about cash; my life savings!
We do not run a fixed exchange rate system and therefore cannot devalue the USD. We can however, depreciate the dollar considerable. even from these levels.
I have a hypothetical question: Can the financial System (the Fed, Gov’t, IMF, whoever) say that starting ‘tomorrow’ the USD is now, across the board, only worth 60% (example) as much as it was yesterday? I’m really starting to worry about cash; my life savings!
What you are talking about it called "buying power" of the dollar and you have every right to worry since there is, and has been, a constant erosion of the buying power of the dollar for decades. This link will let you see ,from year to year, just how this erosion of buying power affects us all.
What puzzles me is that people simply don't notice the erosion of their money(wealth) due to the ever decreasing buying power. This erosion, in fact, is stealing all that we saved or otherwise invested. The wall street crash was, in fact, was nothing more that wiping off the books trillions of dollars of unfunded dollars. So we all should look for other means to capture the value of our labor and our wealth 'cause the dollar in your pocket is nothing more than "funny money".
I have a hypothetical question: Can the financial System (the Fed, Gov’t, IMF, whoever) say that starting ‘tomorrow’ the USD is now, across the board, only worth 60% (example) as much as it was yesterday? I’m really starting to worry about cash; my life savings!
It really helps to understand the role of currency in our present day society. It has only been like this for a few decades. For most of the nation's history currency, the USD, was in the form of "Lawful Money" which had controls which prevented the current schemes that essentially steal wealth from savers.
I highly recommend a read of this post on another forum. It helps to understand how the current USD i.e. The Federal Reserve Note, works.
What puzzles me is that people simply don't notice the erosion of their money(wealth) due to the ever decreasing buying power. This erosion, in fact, is stealing all that we saved or otherwise invested. The wall street crash was, in fact, was nothing more that wiping off the books trillions of dollars of unfunded dollars. So we all should look for other means to capture the value of our labor and our wealth 'cause the dollar in your pocket is nothing more than "funny money".
From one Tightwad to another Tightwad: I’ve been frugal all my life so inflation doesn’t really concern me (right or wrong?). Losing a decent chunk of interest income per month, because of unnaturally low interest rates, does bother me. I’ve mentioned before that I’m patient/satisfied waiting for cycles in interest rates but the last 2 or 3 times around the cycles’ have been manipulated.
lumbollo: I got the link (5 pages); I’ll read it offline because I have ‘limited’ dial up.
Last edited by DSOs; 01-07-2010 at 03:11 PM..
Reason: small L in lumbollo
2nd or 3rd quarter 2009 the Fed "bought" ie printed more money than other countries loaned. Which means they are continuously devaluing the dollar and have stepped up their measures to do so.
It's possible they want to "inflate" the price of housing so most folks aren't upside down on their loans. I don't know what their plan is.
Either way your savings will erode. I'm putting mine into commodities. Risky? A bit. But not if you see what's actually going on.
In 2-3 years I'll bet we'll see $4/gal gas but in reality the buying power will be relative to other things.
From one Tightwad to another Tightwad: I’ve been frugal all my life so inflation doesn’t really concern me (right or wrong?). Losing a decent chunk of interest income per month, because of unnaturally low interest rates, does bother me. I’ve mentioned before that I’m patient/satisfied waiting for cycles in interest rates but the last 2 or 3 times around the cycles’ have been manipulated.
lumbollo: I got the link (5 pages); I’ll read it offline because I have ‘limited’ dial up.
Inflation should concern you as a saver because it means your savings are worth less than they were when you saved them. In other words it is discouraging people from saving.
If inflation of 10% were to happen, if you have saved $100k, next year that $100k will only be able to buy $90k of "stuff". Next year only $81k. You can see how it quickly erodes your savings.
Indeed. When the Federal Reserve was created in 1914 the Federal Reserve Note was worth .... well $1. Today it is worth about 4 cents.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
