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The Death of the Dollar
THE AMERICAN THINKER ^ | August 06, 2010 | Vasko Kohlmayer

Posted on 08/05/2010 11:35:11 PM PDT by onyx

Nothing can save our financial system in the long run.  It is doomed to collapse. This is inevitable, because our government controls and manages its very foundation -- the dollar.

The federal government began its takeover of the dollar in 1913 when it established the Federal Reserve Banking System. Prior to that the dollar was a real store of value. In the period from 1783 to 1913 there was a long period of currency stability with virtually no inflation. If you saved one dollar in 1800, your great grandchild could buy roughly the same amount of goods with the same dollar one century later.

In 1913 five dollars could get you the following:

15 pounds of potatoes, 10 pounds of flour, 5 pounds of sugar, 5 pounds of chuck roast, 3 pounds of round steak, 3 pounds of rice, 2 pounds each of cheese and bacon, and a pound each of butter and coffee... two loaves of bread, 4 quarts of milk and a dozen eggs.

In 2010 five dollars barely gets you two pounds of cut chicken meat.

Since the establishment of the Federal Reserve in 1913 the dollar has shed more than 90 percent of its value. The loss of value has been especially pronounced since 1971 when Richard Nixon took the dollar off the last vestiges of the gold standard. On that date the dollar became a pure fiat currency grounded in nothing but the whims of politicians and technocrats. The consequences have been disastrous. One thousand of 1971 dollars would only buy $185 worth of goods today. This represents a loss of some 80 percent in purchasing power.

The dollar has already entered its terminal phase. The word "doom" is written across it for anyone with the eyes to see. Sad to say, there is no way to reverse its downward slide. With more than $13 trillion in public debt and some $100 trillion in unfunded mandates our federal government has assumed far more obligations that it can ever make good on. Worse still, these figures are growing larger every year.

To put it bluntly, our federal government is flat-out bankrupt. Currency disintegration is always the unavoidable result of government bankruptcy. The dollar -- which has been weakening for many decades -- will at some point go into a sudden death spin.

The only question is when. It may happen six months from now or six years from now. The timeframe is impossible to predict, but we can now for certain that happen it will. No one -- not even the federal government -- can escape the numbers. And the numbers are hideous. One hundred trillion plus is a killer.

Under normal circumstances the dollar would have collapsed already given how impossibly indebted our government is. Some people are puzzled by its continued survival. They say this is just another sign that we live in a crazy world. But there is nothing crazy about it. The dollar is still alive, because there is no ready alternative.

Doomed though it may be in the long term, big time holders of US dollars keep desperately hanging on, because they have nowhere else to go. Where else could China invest its nearly one trillion dollar reserves? There is no easy option. So China keeps propping America's federal debt by purchasing Treasury notes and thus keeping the dollar afloat. It is a bad deal for China and a fortuitous one for the US, at least for the time being. But things cannot go on like this forever. Eventually something will give in and the whole gargantuan house of debt will come crashing down. When that happens things will get ugly.

Some people may say this situation has been brought about by reckless fiscal and budgetary policies rather than by the government's management of the currency. But the ability of government to run deficits is directly tied to its power to manage money.

It is very difficult for politicians to run large deficits if the currency is anchored in something intrinsically real and valuable, let's say gold. This is because when they post large budget shortfalls under a gold standard, people naturally ask them: "Where in the world are you going to get all the gold to pay for all this spending." And since politicians do not know how to make gold, they are forced to admit: "We are going to get it from you, the people, of course. Where else could it come from?"

As you can imagine, such answers do not usually go well with the voting public. The restrictive quality that real money exerts on the profligacy of politicians is often referred as "the golden handcuffs."

As it is now, most people do not think that they will have to pay for the spending incurred by their representatives in Congress. They think that deficits are something that does not concern them directly. They somehow assume the if the government needs more money it can simply issue more bonds. But this way of living is unsustainable and sooner or later the inflow from abroad will stop. Then we will all pay for our government's extravagance by the disintegration of the currency.

Traumatic as it may be, we should not be surprised by this. It has to end this way. This result became ineluctable the moment the American people gave government control over their money. Let's hope that we will learn from our mistakes. Let's hope that when the present monetary regime finally unwinds, we will have the wisdom to lay a more solid foundation for our money than the whims of politicians.



TOPICS: Business/Economy; Front Page News; Government; News/Current Events
KEYWORDS: dollar; gold; government; obama; palin; silver
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To: RegulatorCountry

Best of luck to you.

I’ve cut out my land line, installed power strips to my various TV setups, and will probably cut my cable package when the promo period is up (don’t watch it much, anyway).

No big vacation this year, eating at home more, and am using rain barrels. This fall, I’m putting up a clothesline and expanding the garden area.

I’m skinning along, but, as you say, one wonders about those not quite as set.

I see a lot more people on food stamps (there are a bunch of rental units a few blocks from here). The local food bank gets quite a crowd.

Granted, this is all anecdotal, but sometimes looking at the “big picture” masks a lot of offsetting trends that effect people differently.


51 posted on 08/06/2010 4:12:44 AM PDT by P.O.E. (Compact Theory)
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To: onyx
For me things become more clear if I start considering the price of things in terms of some commodity (e.g. ounces of gold), rather than paper currency. After all, it's not the number of dollars one has that one should be concerned with so much as what those dollars can buy.

Google "Dow in gold dollars".

52 posted on 08/06/2010 4:14:07 AM PDT by The Duke
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To: Southack
Nope. Not inflation (a devaluation of the Dollar). The opposite: deflation. Falling salaries. Falling employment (fewer jobs). Falling home prices. Deflation.

In that case, it is good to be a federal contractor. Rates don't change. :)

53 posted on 08/06/2010 4:25:05 AM PDT by Lazamataz ("We beat the Soviet Union. Then we became them." -- Lazamataz, 2005)
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To: onyx

Boy this is difficult. I have an offer to sell my property and am forced by the feds to buy another or have 2/3 of the value elimated by taxes. What to do?


54 posted on 08/06/2010 4:32:16 AM PDT by Chickensoup (I am absolutely done. I am a conservative libertarian.)
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To: Mind-numbed Robot

:) Pretty good advice. Thanks!


55 posted on 08/06/2010 5:11:55 AM PDT by onyx (Sarah/Michele 2012)
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To: RegulatorCountry
Call it “squeezeflation.” Take more money. Higher cost for necessities, decimate investments available to the lower and middle classes.

That's precisely what's going on. It's hitting the elderly on fixed incomes too, and they VOTE.

56 posted on 08/06/2010 5:16:45 AM PDT by onyx (Sarah/Michele 2012)
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To: The Duke

Right. That’s what I follow.


57 posted on 08/06/2010 5:19:03 AM PDT by onyx (Sarah/Michele 2012)
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To: Chickensoup

That’s just flat-out wrong and makes ya want to start thinking ‘around the edges.’


58 posted on 08/06/2010 5:23:54 AM PDT by onyx (Sarah/Michele 2012)
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To: rawhide
"Where does one put their dollars at now, especially the money tied up in a 401k, that is expected to finance you through retirement? "

I vote for guns, ammo, canned tuna (the good kind, Starkist Gormet Choice Solid Light Tuna Filet, $1.12 @ wallyworld for 4.5 oz.) and bars of bath soap. Lots of drinking water. That's all just a start.

59 posted on 08/06/2010 8:41:44 AM PDT by matthew fuller (2012: Bachman, Bolton, Brewer, Liz Cheney, Coburn, DeMint, Inhofe, Jindal, Palin and Pence.)
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To: Southack

Your major financial transactions in life are:
1. House
2. Salary
3. Stocks


Don’t forget medical and education expenses.


60 posted on 08/06/2010 8:52:22 AM PDT by Atlas Sneezed (Anything worth doing, is worth doing badly at first.)
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To: B-Chan
1. Is enough gold avaiable in the world to back the total amount of currency now

Hi BC ! I've read about this, and though I can't recall the source, I think the answer is no, there isn't. It's one of the less nefarious reasons they went off the gold standard. I don't claim to have anywhere near a good grasp of this, but that's what I've heard.

61 posted on 08/06/2010 9:05:38 AM PDT by Red Boots
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To: B-Chan
A few opinions for what they are worth.

1. Is enough gold avaiable in the world to back the total amount of currency now in circulation?/i>

Yes, because the currencies are fiat and not tied to any commodity directly except thru price. So, at anytime, we could re-peg the dollar to gold. Right now the price of gold is ~1300 dollars to one gold dollar. To re-peg, we would have to calculate all US government obligations before you could back the currency with gold. There is approximately 113 trillion in US Fed obligations. You would have to seriously devalue the dollar in order to meet those obligations thru gold. That means tax hikes or serious cutting of those obligations.

2. The question is not really answered through deflation or inflation but thru a severe decline in our standard of living. This is because the political decisions about our debt and how it would be affected when we brought our gold currency back would still have to be made. In other words, do we raise taxes, cut spending, or devalue the dollar even more relative to gold. Here is the real answer, revaluing our currency will wipe out our standard of living, because current dollars would be worth only fractions of a penny compared to gold dollars. Your purchasing power and wealth that are tied in fiat dollars will also get re-pegged.

3. We would have to repay in gold dollars, which means would take a severe hit in our standard of living. It would mean paying off the debt with real money and not through inflation. If you devalue the dollar even more, it does not change the amount of gold you would still need to pay back.

Does any of this make sense?

62 posted on 08/06/2010 9:06:07 AM PDT by fatez ("If you're going through Hell, keep going." Winston Churchill)
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To: onyx; null and void; stockpirate; george76; PhilDragoo; Candor7; rxsid; MeekOneGOP; ...
Image and video hosting by TinyPic

Nothing can save our financial system in the long run. It is doomed to collapse. This is inevitable, because our government controls and manages its very foundation -- the dollar.

The federal government began its takeover of the dollar in 1913 when it established the Federal Reserve Banking System. Prior to that the dollar was a real store of value.

Not long before he was murdered, didn't JFK suggest abolishing the Federal Reserve?

63 posted on 08/06/2010 9:37:51 AM PDT by LucyT
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To: LucyT; All
Not long before he was murdered, didn't JFK suggest abolishing the Federal Reserve?

Don't know about that, but today the biggest advocate for that is Ron Paul. He wrote an excellent short book on the subject called End the Fed.

64 posted on 08/06/2010 10:08:56 AM PDT by justiceseeker93
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To: agere_contra

“It’s worth reminding the thread that it takes ~ 10 minutes to earn that 5 dollars today, as opposed to ~ 10 working days in 1913.”
////////////////////////////////////////////////////////////

According to my figures that translates to thirty dollars an hour. If you earn that I congratulate you but there are millions of Americans who would be delighted to earn half that much. The average for hourly earners is below nineteen dollars per hour and falling.


65 posted on 08/06/2010 10:22:42 AM PDT by RipSawyer (Trying to reason with a leftist is like trying to catch sunshine in a fish net at midnight.)
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To: LucyT; justiceseeker93
He wrote an executive order 11110 to abolish it and when Johnson came in he recinded it.

Kennedy Executive Order on Federal Reserve

66 posted on 08/06/2010 10:35:52 AM PDT by Spunky (You are free to make choices, but not free from the consequences)
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To: LucyT

JFK did start printing Treasury notes(not federal reserve notes) hence non debt money shortly before his death.


67 posted on 08/06/2010 10:36:14 AM PDT by bigiron
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To: LucyT

Good morning, Lucy!

Sorry to be off topic, but are you aware of what’s been going on over on Polarik’s thread?

http://www.freerepublic.com/focus/f-backroom/2562565/replies?c=251

Thanks

Rose


68 posted on 08/06/2010 11:07:24 AM PDT by rosettasister
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To: Southack
Nope. Not inflation (a devaluation of the Dollar). The opposite: deflation.

Falling salaries. Falling employment (fewer jobs). Falling home prices.

Deflation.

I thought you were old enough to remember "stagflation".

69 posted on 08/06/2010 11:08:01 AM PDT by null and void (We are now in day 559 of our national holiday from reality. - 0bama really isn't one of US.)
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To: HiTech RedNeck
The saving grace may be that banks that get their hands on these newly printed, borrowed dollars are socking them away like they’re going out of style, and so they sit in vaults instead of running around the economy driving prices up madly a la Zimbabwe.

Think of it more as impounding more and more and more water behind a weakened dam with busted floodgates.

Lake Missoula can be filled to the brim, and what will be the scablands can still be as dry as a popcorn fart...

...until the day the dam breaks and sweeps everything out of its path.

70 posted on 08/06/2010 11:13:01 AM PDT by null and void (We are now in day 559 of our national holiday from reality. - 0bama really isn't one of US.)
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To: Chickensoup; shaggy eel; DieHard the Hunter
I have an offer to sell my property and am forced by the feds to buy another or have 2/3 of the value elimated by taxes. What to do?

Buy another property in New Zealand...

71 posted on 08/06/2010 11:22:19 AM PDT by null and void (We are now in day 559 of our national holiday from reality. - 0bama really isn't one of US.)
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To: bigiron
JFK did start printing Treasury notes(not federal reserve notes) hence non debt money shortly before his death.

United States Notes. Red seal and serial numbers. I remember them.

72 posted on 08/06/2010 11:25:42 AM PDT by null and void (We are now in day 559 of our national holiday from reality. - 0bama really isn't one of US.)
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To: onyx

Debt is being destroyed. This is falling faster than the money supply is being created.

For now, I suspect deflation on big items, and cost increases on staples.


73 posted on 08/06/2010 12:49:28 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: LucyT

JFK speech on Secret Society


74 posted on 08/06/2010 1:13:02 PM PDT by Brown Deer (Pray for Obama. Psalm 109:8)
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To: onyx

I’m as baffled as you are. Good discussion going on.

Whether we ultimately fall into a deflationary depression or approach hyperinflation is the biggest question we face and the answer is unknowable. If I knew that answer, I would be poised to become very very rich in a very short amount of time.

IMHO, Southack is making the best points on the thread. We are not currently deflating. We are experiencing disinflation - a nearly zero rate of inflation, but not a negative inflation rate.

Everything I see on the horizon looks like a coming deflation to me and a repeat of the Great Depression. That is where it looks to me like we are heading. Southack seems right to me in that deflation will rule the day.

The problem is, you have to look past “today” and look toward the future more than a few years out. In 2004, if you looked at “today”, it was obvious to one and all that house prices were going up forever and would never return to the mean values related to history, incomes and rent prices. Those of us who study our history, had seen a houseing boom or two, and knew that home prices can never disregard historic long-term inflation rates, and current incomes and current house rental rates.

We knew that the “today” trend of ever rising house prices had to end, and house prices would collapse.

Southack is looking at “today” with the destruction of debt, bank failures, businiss bankruptcies, cost cutting, layoffs, tight credit, home foreclosures and he is projecting all this — along with knowing his history of the Great Depression and Japan’s lost decade of deflation (now 2 decades old) — he is calling a deflationary depression.

Again, in my opinion, I find his argument impossible to defend against.

But I do remind myself to think out of the box. Just because everything points to deflation today, does that really mean taht deflation must occur with a repeat of the Great Depression? I’m not able to embrace that conclusion.

There are so many differences today between the US’s current economic situation, USA during the Great Depression, and Japan’s lost decade, that I am not convinced the US today must deflate into a depression.

Fore example...

During the Great Depression we were on the gold standard and destroying the value of the currency was not so easy. The US Government has as it’s gold the short term severe devaluation of the dollar in order to “inflate” our way out of our debts and prevent catastropic deflation.

Japan’s yen is not a world reserve currency and their ability to debase the yen through massive debt spending may not have the outcome or impact that massive US debt spending of the dollar may have. They may yet make it possible for a 2020 dollar to be worth 1/5th of a 2010 dollar. If successful, cut all dollar-denominated debts by 80%, because that is the net efrect. During the Great Depression there was no fiat world currency - major currencies were all tied to gold or silver, so who knows what effect the massive monetezation of the world’s reserve currency will have on inflation vs. deflation?

I find Southack’s argument unassailable but even then, I am not convinced the US and world ecnomies will grind down into aninevitable reapeat of the Great Depression’s deflationary depression. I’m just not sure that has to happen. It seems the likely outcome. Yet I am not convinced that inflation is not possible by a successful effort of the US government to severely debase the dollar. History suggests it can’t happen as no nation has ever successfully inflated its way out of a coming deflationary depression (unless you count Weimar Germany, which I am not sure qualifies). So history is not on the side of the current economic crisis ending in inflation. History suggests a deflationary depression.

Finally, I agree with RegulatorCountry, disagree with Southack - credit destruction is deflationary, not the mere existence of debt. The housing bubble was massively inflationary and was funded with massive debt/credit. If the mere existence of debt is deflationary, then the huge banking debt incurred during the housing bubble would have deflated house prices rather than inflating them. I don’t want to twist Southacks words and I understand him to mean that when you have a huge unserviceable debt overhang, debt must be destroyed and that process is very deflationary. But he keeps stating the simmple maxim “debt is deflationar”, and I would beg to differ the opposite.

Unserviceable debt is deflationary.

Serviceable debt is inflatianry. But then maybe Southack is hotshot economist from NYU or something and being an idiot engineer layman with no formal econonic training or experience, my common sense may be misleading me. Of cousre, those brilliant formal economists are the ones who have created this depression in the first place by allowing debt to spiral out of control and in fact pushing for this to happen.

We are in a mild depression and experiencing disinflation. Deflation looks like it is going to be the outcome of Obama’s massive addition to our already catastrophic level of national public and private debt. But I am not convinced deflation is inevitable.

I am not ruling out the possibility that a motiviated government with an unlimited ability to print the world’s reserve currency for a protracted period of time can’t create a massive amount of inflation by devaluing the dollar to between 20% and 5% of its current value in short order.


75 posted on 08/06/2010 1:14:09 PM PDT by Freedom_Is_Not_Free (California Bankruptcy in 4... 3... 2...)
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To: B-Chan
Gold is not the solution in the end. It is still a commodity, and they will fluctuate in price. The Spanish Empire had massive inflation using gold currency, and up till the Spanish Civil War they still had very large gold reserved even though they had a low standard of living.

The advantage of gold is that it is a finite thing. There is only so much to go around, and I can't just make some with a printing press. Now, that would destroy our system of finance as it now sits (credit would dry up and credit fueled expansions would die off).

76 posted on 08/06/2010 1:15:50 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: Freedom_Is_Not_Free

Thank you very much, dear FRiend. You’ve given me and everyone else a lot to think about and digest.


77 posted on 08/06/2010 3:14:31 PM PDT by onyx (Sarah/Michele 2012)
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To: RegulatorCountry
"Debt default is deflationary. Debt itself is neutral to inflationary."

Nope. Debt default is inflationary. Debt itself is deflationary.

If Greece defaults on its debt and switches to its own currency away from Euros, then Greece will get hyper-inflation.

On the other hand, if Greece maintains or increases its debt, it will get a continued falling of prices (e.g. on its islands for sale): that's known as DEflation...the opposite of INflation.

78 posted on 08/06/2010 3:17:50 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Freedom_Is_Not_Free
"Finally, I agree with RegulatorCountry, disagree with Southack - credit destruction is deflationary, not the mere existence of debt. The housing bubble was massively inflationary and was funded with massive debt/credit. If the mere existence of debt is deflationary, then the huge banking debt incurred during the housing bubble would have deflated house prices rather than inflating them. I don’t want to twist Southacks words and I understand him to mean that when you have a huge unserviceable debt overhang, debt must be destroyed and that process is very deflationary. But he keeps stating the simmple maxim “debt is deflationar”, and I would beg to differ the opposite."

You are confusing debt with credit. They are different.

Credit is what someone is willing to loan you in the future.

In contrast, debt is what you already owe.

The destruction of *credit* is deflationary...when lenders won't loan you new money, you can't have new spending...so money becomes more dear...more valuable.

But the destruction of *debt* is inflationary...when leaders default on government bonds, you get hyper-inflation. See: Zimbabwe.

79 posted on 08/06/2010 3:27:18 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: onyx

You are welcome.


80 posted on 08/06/2010 4:09:24 PM PDT by Freedom_Is_Not_Free (California Bankruptcy in 4... 3... 2...)
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To: Southack
Your major financial transactions in life are: 1. House 2. Salary 3. Stocks

You forgot taxes.

81 posted on 08/06/2010 5:17:56 PM PDT by TruthFactor (The Death of Nations: Pornography, Homosexuality, Abortion)
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To: TruthFactor

51% of people pay no income taxes.


82 posted on 08/06/2010 5:34:51 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack

Yep, the deflation/inflation argument is about over.

We are in for very hard times.

Remember....God, guns, grub, and gold.


83 posted on 08/06/2010 5:37:38 PM PDT by A.Hun (Common sense is no longer common.)
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To: TruthFactor
As an aside, what's up with your tag line of “The Death of Nations: Pornography, Homosexuality, Abortion”?

Somehow, I can't see Imperial Spain having died from “Pornography, Homosexuality, Abortion.”

Carthage?

Troy?

Soviet Union?

Somalia?

Confederacy?

Rhodesia?

Words mean things.

84 posted on 08/06/2010 5:38:42 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack
Income taxes?

What about all the other taxes? Social Security, Medicare, Unemployment insurance, Sales taxes, Utility taxes, Property taxes, Licensing fees...

Thay all add up to a huge amount of money.

85 posted on 08/06/2010 5:47:31 PM PDT by TruthFactor (The Death of Nations: Pornography, Homosexuality, Abortion)
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To: Southack
Somehow, I can't see Imperial Spain having died from “Pornography, Homosexuality, Abortion.”

I See your point. But, they sure are doing a job on western civilization.

86 posted on 08/06/2010 5:53:48 PM PDT by TruthFactor (The Death of Nations: Pornography, Homosexuality, Abortion)
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To: TruthFactor

The better point would be that homosexuality, pornography, and abortion are great at harming religion.


87 posted on 08/06/2010 5:57:17 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: null and void

Buy another property in New Zealand...

I think I have to pay the 2/3 before I can buy the property in New Zealand.


88 posted on 08/06/2010 9:16:08 PM PDT by Chickensoup (I am absolutely done. I am a conservative libertarian.)
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To: HiTech RedNeck

If bread is a metaphor for food, I agree. Being gluten
intolerant, I don’t eat bread. It doesn’t figure into
my food bill at all.


89 posted on 08/06/2010 9:52:48 PM PDT by Myrddin
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To: Myrddin

well shoot. looking back at the whole wrangle with southack, which he eventually seemed to give up. i said inflation, he said deflation.

It does seem that prices are more calm, if not lower, than during their jumpiness during the oil run-ups of the Bush years (and Bush was not to blame for them). Back then all were saying that energy was the lion’s share of these higher prices.

Now we have a huge borrow, a huge unleashing of heaven knows how many of the borrowed dollars, some busted bubbles. And a stock market that went frantic to go back up not long after Obama took the oath.

God knows. It’s like a ball of yarn that two cats are pulling at the opposite ends of. Prices may be equivocating just because nobody can guess what the Bummer will do next week.


90 posted on 08/06/2010 10:04:53 PM PDT by HiTech RedNeck (I am in America but not of America (per bible: am in the world but not of it))
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To: onyx
In 1913 five dollars could get you the following:

15 pounds of potatoes, 10 pounds of flour, 5 pounds of sugar, 5 pounds of chuck roast, 3 pounds of round steak, 3 pounds of rice, 2 pounds each of cheese and bacon, and a pound each of butter and coffee... two loaves of bread, 4 quarts of milk and a dozen eggs.

Then 5 dollars was nearly a quarter ounce of gold. Today, a quarter ounce of gold is near $300.00. Could you buy this for $300?

91 posted on 08/06/2010 10:17:11 PM PDT by DeaconBenjamin (A trillion here, a trillion there, soon you're NOT talking real money)
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To: HiTech RedNeck

My Jack Russell/Rat Terrier puppy has a different
way to deal with a skein of yarn. I call it “whole
house knitting’. He runs around the furniture in
the livingroom and dining room with the skein in
his mouth. To undo it, you have to trace the
original path while winding it back up. My wife
has to keep her yarn in a locked box to prevent
his creative behavior.


92 posted on 08/07/2010 8:44:04 AM PDT by Myrddin
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To: onyx
It is very difficult for politicians to run large deficits if the currency is anchored in something intrinsically real and valuable -- let's say gold. This is because when they post large budget shortfalls under a gold standard, people naturally ask them, "Where in the world are you going to get all the gold to pay for all this spending?" And since politicians do not know how to make gold, they are forced to admit: "We are going to get it from you, the people, of course. Where else could it come from?"

As you can imagine, such answers do not usually go well with the voting public.

Great post ...

93 posted on 08/07/2010 8:53:27 AM PDT by GOPJ (Asked for ZIP? Give 82224 - Lost Springs,Wy - most sparsely populated in country. Freeper:SamAdams)
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To: DeaconBenjamin
15 pounds of potatoes, 10 pounds of flour, 5 pounds of sugar, 5 pounds of chuck roast, 3 pounds of round steak, 3 pounds of rice, 2 pounds each of cheese and bacon, and a pound each of butter and coffee... two loaves of bread, 4 quarts of milk and a dozen eggs.

Then 5 dollars was nearly a quarter ounce of gold. Today, a quarter ounce of gold is near $300.00. Could you buy this for $300?

Well, using the handy price checker feature at Albertsons.com (here), here's what I come up with:

Item Price per item Cost
15 lbs potatoes $3.99 / 5 lbs $11.97
10 lbs flour $2.49 / 5 lbs $4.98
5 lbs sugar $3.59 / 5 lbs $3.59
5 lbs chuck roast $5.49 / 1 lb boneless chuck $27.45
3 lbs round steak $5.99 / 1 lb chuck steak (no round listed) $17.97
3 lbs rice $1.89 / 1 lb long grain rice $5.67
2 lbs cheese $5.49 / 1 lb cheddar cheese $10.98
2 lbs bacon $4.49 / 1 lb bacon $8.98
1 lb butter $3.49 / 1 lb butter $3.49
1 lb coffee $8.59 / 1 lb coffee $8.59
2 loaves bread $2.89 / 1 loaf $5.78
4 quarts milk $3.99 / gallon $3.99
1 dozen eggs $2.69 / dozen $2.69
TOTAL $116.13

94 posted on 08/07/2010 9:31:15 AM PDT by snowsislander (In this election year, please ask your candidates if they support repeal of the 1968 GCA.)
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To: rosettasister
Sorry to be off topic, but are you aware of what’s been going on over on Polarik’s thread?

Thanks for the heads up. I've read a few of the comments...

95 posted on 08/07/2010 1:11:38 PM PDT by LucyT
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To: snowsislander
Thank you. So, if you had a 1913 $5 gold piece, and sold it for scrap gold value today, you could buy nearly three times as much in groceries as you could in 1913. Very interesting.

Indian Half Eagle 1908-1929 $290.96

Gold Coin Value Guide

96 posted on 08/07/2010 1:34:09 PM PDT by DeaconBenjamin (A trillion here, a trillion there, soon you're NOT talking real money)
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To: DeaconBenjamin
Thank you. So, if you had a 1913 $5 gold piece, and sold it for scrap gold value today, you could buy nearly three times as much in groceries as you could in 1913. Very interesting.

You are welcome.

As to the factor of three increase in buying power from 1913, the answer is yes, it does seem to exist. I would attribute much of that increase to our far greater efficiency in production for commodity items.

For what it is worth, I used typical prices from a standard grocer. I have no doubt that virtually of those items could be bought for less by shopping discounters and member clubs such as Costco, further increasing that factor.

97 posted on 08/07/2010 1:56:03 PM PDT by snowsislander (In this election year, please ask your candidates if they support repeal of the 1968 GCA.)
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To: null and void
I have an offer to sell my property and am forced by the feds to buy another or have 2/3 of the value elimated by taxes. What to do?

Buy another property in New Zealand...

,,, how about registering a charity, based in the Marshall Islands, which you just happen to control? Gift the property to the charity. That sort of Ford Foundation thinking is probably why Ford is the only US car manufacturer not needing a bailout. The system uses you; you have to know how to use it.

98 posted on 09/09/2010 4:16:14 PM PDT by shaggy eel
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