4 ms·
Since the US dollar was fixed to gold there was little to no inflation, because the ratio of gold price to goods price is much more stable. This is true only i
by dimitar 11y ago
Since the US dollar was fixed to gold there was little to no inflation, because the ratio of gold price to goods price is much more stable.
This is true only in some sense on average. There was in fact both very significant inflation and deflation, but they evened out over the long term. People thus could use gold-backed money for savings. It still was a worse asset than bonds to save in, even if you account for sovereign defaults in that era.
- deleted 11y ago[deleted]
- branchless 11y agoYep, money is not a store of value. They have us right where they want us.
- gnaritas 11y ago"They" don't have us anywhere, money is not supposed to be a store of value, it's a medium of exchange. Assets are stores of value.
- liopleurodon 11y agothen what's the point of a savings account? to get screwed over?
- dragonwriter 11y ago> then what's the point of a savings account? A savings account isn't cash, its an immediately-callable loan from the account holder to a financial institution; for the account holder, it provides an asset with very good liquidity (but perhaps marginally worse than that provided by a checking account), essentially zero risk, but poor returns (but perhaps marginally better than that provided by a checking account). Its a way of meeting short-term spending needs (but perhaps slightly longer term than that met by a checking account). Demand deposit accounts (both checking and savings) in general are, like cash, basically for short-term spending, but where the bank provides some benefits (actual storage, along with access mechanisms more convenient for many uses than pulling physical bills out of a storage locker).
- pionar 11y agoA savings account is nothing more than a loan from you to the bank.
- gnaritas 11y agoSavings accounts are for short term liquidity, not long term stores of value. Long term, look to bonds, stocks, and other asset classes. Money is for spending, not storing.
- tosseraccount 11y agohttp://www.moneychimp.com/articles/econ/inflation_calculator.htm http://www.moneychimp.com/articles/econ/inflation_calculator... Inflation 1900-1972 : 2.3% Inflation 2000-2014 : 2.24% Gold had nothing to do with it. The value of the US currency has always been a based on trust. In practice the US government did not exchange gold for dollar bills anyway. The Zerohedge theories of gold just doesn't work.
- innguest 11y ago- clueless keynesian trusts government numbers. - clueless keynesian does not know government changed the way to calculate inflation several times throughout the years (and barely knows what 'inflation' means anyway). - clueless keynesian can't cope with the cognitive dissonance of asking themselves why the government needs to change the way they measure something if it's so "constant" like 2.24-2.3%. - clueless keynesian therefore thinks he knows more than all the traders and insiders posting at ZeroHedge. - clueless keynesian therefore thinks the bankster priesthood since 1913 know more about money than the sum of all people that lived in the past 5000 years using gold as money.
- tosseraccount 11y agoKeynesian? You're projecting. US currency is and always has been backed by the US economy and military. Not gold.
- innguest 11y agoAn Austrian "projecting"? Hah. So you think after May 1971, Switzerland and France redeemed USD$50M and USD$191M, respectively, in US products and soldiers? Because my sources tell me they redeemed it in gold. Has Germany been trying to redeem their US deposits in US products and soldiers? OR did they ask for gold? So much for your "is and always has been". Seems like depositors don't really care about US products and soldiers, more like, just its gold.
- tosseraccount 11y ago