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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: jackjc who wrote (69854)	9/16/2006 11:46:49 AM
From: Wyätt Gwyön	Read Replies (3) \| Respond to of 110194

US dollar purchasing power fall from adjusted 1.00 at birth to .06 today. a typical goldbug cliche--unfortunately it is a misguided oversimplification which leads to an incorrect conclusion. it is silly to look at nominal figures over time without context. you might conclude that people today are 94% poorer than when you were born. in fact US nominal income over the past century has risen much more than the dollar has fallen, so people are much richer today than they were a century ago thanks to increased real income. 1 dollar stuck in a mattress for 100 years is still 1 dollar. but most people do not keep their money in mattresses for 100 years. the same dollar invested at the cash rate for a century is 57 dollars. back out inflation and the return is still positive, about 0.4% per year compounding. it is amazing how haters of fiat currencies tend to overlook or be ignorant of this point. it really damages their credibility.

To: jackjc who wrote (69854)	9/16/2006 11:55:34 AM
From: John Vosilla	Respond to of 110194

'I have seen the US dollar purchasing power fall from adjusted 1.00 at birth to .06 today.' Yes and it will probably have a similar fall the next 40-50 years at the rate our reckless government fails to keep it's house in order. This even if real estate prices on a national basis remain flat the next decade.. Go to Canada or Europe and you've lost 40-50% purchasing power in five years just on the the exchange rate never mind how much the real cost of living on a local level also goes up.. Personally I have no axe to grind having very little debt and very liquid these day. I know of several in the same situation and all feel sitting in cash at 4-5% interest rates long term will be a losing proposition though in the short term it is the prudent thing to do and remain patient.