3 ms·

The dollar is mighty. What could make it fall

2 points by hhs 4y ago

simonblack 4y ago
"Investors should assume “the currency is going to zero, ...” When you consider that the dollar has dropped down to about 2% of its value from around 1970, it only has that 2% to go before it hits the zero mark. Fun project for you to do: Look at films made over the decades. Compare the prices shown with today's prices. Very good for a laugh.
- AnimalMuppet 4y ago
  2% of the value it had in 1970? I want to see your source for that.
  - simonblack 4y ago
    Two examples of price inflation (price inflation= decline of currency) 1 ounce of gold in 1970 = $35 1 ounce of gold today is $1681 So the value of $1 today is 35/1681 x 100 = 2.08% of the value in 1970 A Rolex Oyster watch in 1970 was $210 A Rolex Oyster watch today is $8897. So the cost of that watch in 1970 was 210/8897 x 100 = 2.36% of today's cost. So if prices have increased by 40-50 times, that means the dollar today is worth about one fortieth to one fiftieth of it was back in 1970. Let's be generous and say that it's only one fortieth. One-fortieth is 2.5%, so today's dollar has lost 97.5% of its value in the last 50 years alone. If you go back further, then that loss is even greater. Another way of looking at the loss of the buying power of the dollar: Back around 1970 a blue-collar worker at Ford or similar could afford, on his single wage alone, to buy a house, a car, a holiday every year and allowed his wife to be able to stay at home and look after the 3-4 kids. Today, both the husband and wife need to go out to work, and sometimes more than one job each, and that applies even to semi-professional workers. They often can't afford to have a house so they have to rent. They buy a car on time-payment because they don't have the savings to buy one for cash. They probably only have one kid, because they can't afford the 3-4 kids that were common back in the 60s and 70s.

3 ms·

The dollar is mighty. What could make it fall

2 points by hhs 4y ago

simonblack 4y ago
"Investors should assume “the currency is going to zero, ...” When you consider that the dollar has dropped down to about 2% of its value from around 1970, it only has that 2% to go before it hits the zero mark. Fun project for you to do: Look at films made over the decades. Compare the prices shown with today's prices. Very good for a laugh.
- AnimalMuppet 4y ago
  2% of the value it had in 1970? I want to see your source for that.
  - simonblack 4y ago
    Two examples of price inflation (price inflation= decline of currency) 1 ounce of gold in 1970 = $35 1 ounce of gold today is $1681 So the value of $1 today is 35/1681 x 100 = 2.08% of the value in 1970 A Rolex Oyster watch in 1970 was $210 A Rolex Oyster watch today is $8897. So the cost of that watch in 1970 was 210/8897 x 100 = 2.36% of today's cost. So if prices have increased by 40-50 times, that means the dollar today is worth about one fortieth to one fiftieth of it was back in 1970. Let's be generous and say that it's only one fortieth. One-fortieth is 2.5%, so today's dollar has lost 97.5% of its value in the last 50 years alone. If you go back further, then that loss is even greater. Another way of looking at the loss of the buying power of the dollar: Back around 1970 a blue-collar worker at Ford or similar could afford, on his single wage alone, to buy a house, a car, a holiday every year and allowed his wife to be able to stay at home and look after the 3-4 kids. Today, both the husband and wife need to go out to work, and sometimes more than one job each, and that applies even to semi-professional workers. They often can't afford to have a house so they have to rent. They buy a car on time-payment because they don't have the savings to buy one for cash. They probably only have one kid, because they can't afford the 3-4 kids that were common back in the 60s and 70s.