Howard Blitz

More About: Economy - Economics USA

Days of low prices not really gone, just disguised

Most individuals see that the price of gasoline, movie theater tickets, ice cream cones, and practically all other goods and services has increased quite substantially over the past fifty years. Just recently there were comments in this newspaper about how the price of gasoline used to be 11 cents a gallon, hamburgers were 35 cents, a coke was 10 cents, and a movie theater ticket was 25 cents. As one individual mentioned, “Those days are gone.”

However, maybe those days are not really gone, just hidden. If one peels back the cover that shrouds the U.S. monetary system, one will see that the price of most goods and services today, including gasoline, movie theatre tickets, and ice cream cones, is actually pretty close to what it use to be fifty years ago. By comparing apples to apples and oranges to oranges the same quarter that existed in 1956 still approximately buys an individual a gallon of gasoline and an ice cream cone and the same two quarters a movie theatre ticket. Even the same $20 that existed in 1956 still buys a lady that same nice suit she could buy back then.

Of course, money, that very special commodity that allows for the specialization of labor and a higher standard of living for everyone, was silver and gold fifty years ago. A commodity, in order to be money, must be durable, acceptable to all, and most important maintain its value over time. At today’s silver price the same silver quarter of 1956 is worth about 2.5 paper dollars. Likewise, the same $20 dollar gold piece used for purchases in 1956 is worth about 650 paper dollars today. In other words, today’s paper dollar is only worth about 3 cents of the value of a dollar in 1956. This is why it takes a lot more paper dollars, but approximately the same amount of gold or silver (real money) to purchase the same item today as it did fifty years ago.

Prices have not really increased, rather the value of the individual’s money has declined substantially and continues to depreciate at an alarming rate because of the only entities that control the paper money in use today, the federal government of the United States and the Federal Reserve System. Because government spends way more than it takes in tax revenue, the Federal Reserve System must increase the supply of money in order for government to afford its excessive and unconstitutional expenditures resulting in robbing the individual of his ability to afford his life by requiring him to pony up more paper dollars to be able to live.

The founders of the United States did not want anything but gold and silver to be used as money because of the quality they have over paper. Gold and silver are money, not because the founders said they should be, rather gold and silver are money because of the very long history of trial and error and the use of them by individuals throughout history. Gold and silver are elements of the earth and are difficult to reproduce making their value very difficult to depreciate. Paper, on the other hand, is extremely easy to reproduce making it extremely easy to depreciate its value. Gold and silver are practically indestructible, paper is not.

When writing the Constitution the founders did not allow for a central bank to be in control of the nation’s money supply, either, because they experienced the ravages of inflation when the value of their own continental dollar was destroyed by printing too many of them during the War for Independence from England. By controlling a nation’s money supply, the central authority has the total capacity to destroy the value of the currency and history has shown that it usually does.

Government control of the money supply is not the answer to the many situations individuals face today. Without a stable currency individuals are extremely hard pressed to maintain a living and provide for their families. Prices rise because the paper money in use today is getting cheaper all the time. However, money denominated in gold and silver reflects the real price of all goods and services and makes a huge statement as to why prices have hardly increased at all.

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