The Dollar Not Worth Its Weight In Paper, Depression Lie Ahead...

With all the talk amongst political analysts about jobs, we may be ignoring an even more important topic that could be devastating whether you have a job or not.

How bad is the devaluation of the US Dollar?

The value of the dollar has been in decline for a long time. So long that we don’t even notice it. To understand how the dollar decline has happened, we need to look at the historical purchasing power of the US dollar. To illustrate this decline, I have constructed a story that is amazing, BUT TRUE…

In 1964, I was 17 years old and my dream was to own a brand new Chevy Corvette. Alas, I did not achieve my dream.

In 1964 the new Chevy Corvette sticker price was $ 4,037.00 or 8,074 of the new Kennedy half dollars (90% silver content)

Today (2011), a new Chevy Corvette’s sticker price is $ 45,045 in current cash (paper dollars).

Those 8,074 half dollars needed to buy that new Corvette in 1964 are worth their silver melt value today. Now that silver melt value today (8-19-11) is thirty times face value, or $ 121,118.00.

If I had stashed those 8,074 silver halves back in 1964 and today pulled them out and sold them, I could purchase a new 2011 Corvette and still have enough left over to purchase a new 2011 Lexus ES350 and a new 2011 Cadillac CTS. (Values per Edmonds.com)

The 1964 US silver halves have not gotten rare. The difference is due almost entirely as the result of US dollar devaluation.

A recent interview with Trends expert Gerald Celente says it all:



What observations do you have with regard to the ever decreasing value of our dollar and how do we deal with it?

I think the Euro is going to crash long before the dollar will. The Europeans are finding out more everyday that Germany is the only country that is any kind of good financial shape and if Germany smartly pulls out of the euro market then all of the participating countrys will crash.

reply to post by romanmel



It's all GONNA crash!

The new system is being readied.

Get ready for GLOBAL DEBT FORGIVENESS everyone.

reply to post by pyrodude


Good point.

All the currencies are paper based, and as such worthless.

Germany stands to become a powerhouse in Europe.

reply to post by romanmel


Back in the seventies when I but a wee lad, I used to go into my Dad's money jars to buy candy. They were silver Kennedys and much more. I had no idea until later that I had probably spent thousands (due to their worth) rather than pennies on M&M's and Now and Laters.

Boy did he whip my butt!

I probably spent my inheritance on candy.

Ahhh, the ignorance of youth.

Originally posted by TDawgRex
reply to post by romanmel

 

Back in the seventies when I but a wee lad, I used to go into my Dad's money jars to buy candy. They were silver Kennedys and much more. I had no idea until later that I had probably spent thousands (due to their worth) rather than pennies on M&M's and Now and Laters.

Boy did he whip my butt!

I probably spent my inheritance on candy.

Ahhh, the ignorance of youth.

edit on 19-8-2011 by TDawgRex because: Need...more...coffee!

True.

I read a story by an old time collector a few years back.

His father brought home a roll of the new 1916 Standing Liberty (a rare coin today) quarter and gave it to him. He kept them for a while but eventually spent them all. Today the 1916 Standing Liberty quarter in uncirculated condition is worth about $17,000.00 each. That roll of quaters today would be worth $680,000.00.

ALL paper currencies must be backed up by something tageble.
Since the gold is squirreled away why can't each american dollar be backed up by a specific parcel ( lot marked on each circulated dollar a desert lot would be larger than a fertile lot of course but each lot worth what the dollar was worth in 1913) of Unspoiled Government* (ergo publicly owned) land? If a person can accumulate lots next to each other they can if they wish trade the dollars for the lot.

This would eliminate inflation since they cannot make more government land.

This is very rudimentary idea of course there are bound to be flaws.

Fiat currency is a ponzi scheme. History has taught us that fiat currency always fails. The problem with fractional reserve banking and fiat currency is that you continually put more and more non-existant dollars into circulation at the push of a button. The pie doesn't get bigger, each indivual piece just gets smaller. So the same can be said of fiat currency. Value is determined by output of a country or GDP. You can increase it, but only nominally. So the more fiat currency you circulate relative to it simply makes each unit ov currency less valuable against it. Make sense?

The dollar has never been worth anything. It is a note on a debt.

The dollar is not going anywhere, even with all the volatility in the markets, countries all around the world are still buying US bonds, because they are the most reliable way of investments

So the dollar may be devaluated, US lost its triple rating but the dollar is still in demand.

Many wonder why, I guess US reputation is still good regardless of what is going on economically.

reply to post by marg6043


For now... Expect that to change in the very near future. Hence the move toward physical gold by numerous countries. I just feel bad for the folks holding gold stock certs who believe they have gold. I challenge them to request the fair market weight in gold.

reply to post by kozmo


Yes for now, like you said, I agree, but, since the last market crash is been talks of leaving the dollar and replace with something else, the Euro is doing worst, so what else, Chinese? the truth is that even since the market crash in 2008 the demand on the dollar has not gone away, even with the markets volatility in the last few weeks the dollar still stands out.

Perhaps like you say for now, but as long as the US is delivery its promises the dollar will stay where it is right now.

reply to post by marg6043


Agreed! In the very, VERY near future, the US will no longer be able to deliver on its promise - and that will become painfully evident to all of the players in the game. I'm not concerned with where we are today, at this moment. People aren't fully aware of the true nature of the financial scheme. As awareness grows, so too will the drive to gold. Again, it is already happening at a national level with China, Venezuela and countless others stockpiling physical gold. In the iinterim, the banking cartel is doing its level bast to keep the game going.

You are right about the dollar. It goes no where but down. Interest is the reason. The way the Fed controls it justs adds fuel to the fire.

Silver is another matter. My Grandad died about 20 years ago. His savings consisted of mostly silver coins. He had several 5 gallon milk jugs full. his estate was split many ways so everything was liquidated. My parents and aunts and uncles probably now wish they had held on, but for my Grandfather he never made one red cent by investing in silver and struggled all his life. Had he instead taken that silver and used it to invest in the stock market, his life and his legacy would have been much grander. Let's be honest. Until last year Silver and other precious metals have lagged inflation for a very long period of time. I still see estimates of $2500 gold because that is the point where it's return will meet the long term inflation rate. Not sure of that number for silver.

For the time period mentioned I calculate about a 15 times return on the money during that time period which equals about $60,000. This does not however include dividends of 2-3% which would have been reinvested for the last 46 years, easily giving stocks a pretty large margin over silver for the timeframe of 1964 - now.