U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-07-2010, 11:36 AM
 
Location: 3rd Rock fts
749 posts, read 1,004,996 times
Reputation: 304

Advertisements

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!
Rate this post positively Reply With Quote Quick reply to this message

 
Old 01-07-2010, 11:40 AM
 
Location: Sandpoint, Idaho
2,993 posts, read 5,626,448 times
Reputation: 3240
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.

We can. The key is the view of the future.

S.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-07-2010, 12:28 PM
 
Location: Planet Eaarth
8,955 posts, read 18,724,534 times
Reputation: 7193
Quote:
Originally Posted by DSOs View Post
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.

Inflation Calculator - Value of a Dollar over Time

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".
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-07-2010, 01:49 PM
 
4,010 posts, read 9,284,297 times
Reputation: 1595
Quote:
Originally Posted by DSOs View Post
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.

Economics 101: Without the Bull****
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-07-2010, 03:12 PM
 
Location: Atlanta, GA
1,194 posts, read 1,910,154 times
Reputation: 816
If oil goes from $80 to $120 that's sort of a devaluation...
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-07-2010, 03:20 PM
 
Location: 3rd Rock fts
749 posts, read 1,004,996 times
Reputation: 304
Thanks everyone.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-07-2010, 04:09 PM
 
Location: 3rd Rock fts
749 posts, read 1,004,996 times
Reputation: 304
Quote:
Originally Posted by Tightwad View Post
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 04:11 PM.. Reason: small L in lumbollo
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-07-2010, 04:09 PM
 
13,673 posts, read 23,840,971 times
Reputation: 13947
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.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-07-2010, 04:14 PM
 
13,673 posts, read 23,840,971 times
Reputation: 13947
Quote:
Originally Posted by DSOs View Post
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.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-07-2010, 07:11 PM
 
4,010 posts, read 9,284,297 times
Reputation: 1595
Indeed. When the Federal Reserve was created in 1914 the Federal Reserve Note was worth .... well $1. Today it is worth about 4 cents.
Rate this post positively Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top