The purchasing power of the US Dollar is down 18.46% in the four years since COVID-19 made us lose our minds

 

More like a stick-up, Janet

 Treasury Secretary Janet Yellen: U.S. Economy Is "Firing On All Cylinders," "Consumers Are Holding Up"

The dollar buys 16.23% less in March 2024 than it did when Joe Biden was inaugurated.

 

 

The purchasing power of the USD is down 15.36% since Biden's selection and Republicans keep checking the horse's teeth

 

The purchasing power of the US Dollar fell again in August 2023, down 0.3%, now down 15.1% since December 2020

 

The dollar's purchasing power has collapsed 16.2% since the onset of the pandemic hysteria, down another 0.3% in July 2023

 

Don't be fooled: Dollar purchasing power fell again in June 2023 as the US orgy of pandemic spending has now devalued the dollar by 18.9% since April 2020

Aka inflation.

 

The purchasing power of the US dollar has fallen 12.6% since Joe Biden was installed two years ago

 Let's go, Brandon.

 

LOL, purchasing power of the US dollar FALLS a whopping 2.3% in January 2023 compared with last year's average

 From 34.2 average annual 2022 to 33.4 in Jan 2023.

That's on top of the 7.3% average fall between 2021 and 2022.

Inflation. It's what's for dinner.

Purchasing power of the US dollar is down 96.61% from 1913 in 2022 on an average basis

 The index average for 2022 is 34.2.

Here.

Today's inflation-adjusted price of gasoline from 1918 is $4.84, but we're averaging record prices well north of $5.00

 Calculator here:

We estimate it would take $4.84 on June 16, 2022 to have equal purchasing power with $0.25 on June 16, 1918.

For the 1918 price, see here.

You can see from this chart that the price of gasoline in 1918 was indeed about $0.25. Wholesale prices averaged about 20.6 cents in 1918.

As of three days ago the official government average actual price at 900 retail outlets was $5.107.

GasBuddy has the USA average at about $5.03 this morning.

LOL, the blog of the St. Louis Fed gaslights you on gasoline prices by jumping through hoops to make the current outrageous prices disappear

 While nominal gas prices have increased rapidly over the past few months, real gas prices were still lower than they were for most of the 2006-2014 period.

More in "Gaslighting gas prices", April 21, 2022.

They don't pay those economists the big bucks for nothing:

[W]e compute by dividing the nominal price by the consumer price index (CPI) and multiplying by 127.5, the value of the CPI in January 1990.

Talk about gaslighting.

Look, US Regular All Formulations (GASREGW), which is what the blog post used, peaked around the 4th of July in 2008 around $4.11/gallon. 

Here's what a popular inflation calculator says about that:

We estimate it would take $5.54 on June 12, 2022 to have equal purchasing power with $4.11 on July 4, 2008.     

Just using a simple CPI calculator here puts $4.11 in 2008 at $4.94  . . .  already IN 2020.

We are mostly certainly paying the highest prices ever for gasoline.

Be happy, right? At least we're not Hong Kong.

 

 

The purchasing power of the US dollar is down 9.4% since Joe Biden was elected in November 2020, just sixteen months ago

 

Percent change from a year ago is shown

 

From 38.4 to 34.8 on the index = 9.375%.

From the spring to the summer of 1933 when FDR confiscated gold and devalued the dollar from $20 to $34 (70%), the decline in this index was 5%, and then 14% by 1940.

 

Jason Lewis on the Rush Limbaugh Show this week was lighting his hair on fire about inflation

Jason Lewis' remedy for inflation, which came in at 5% year over year in May, actually 4.9%, is the standard remedy: The Fed should raise the interest rate, which is effectively zero at the moment and has been for some time.

Aggressive low-interest-rate policy has been the rule since 2002, with the brief escalation from 2005-2007 during the housing bubble being the exception. Over those 19 years through 2020, the average effective federal funds rate (DFF) has been 1.36%.

Contrast that with the 19 year period previous to that, from 1983-2001, when the DFF averaged 6.27%.

That should have kept inflation under control, right?

Well, no.

Under the low interest rate regime we've had an average annual change in CPI of just 2.01%. For the previous period with the higher DFF we had higher inflation, 3.24% per annum on average.

All inflation is bad. At 2% per annum the value of your pile of assets is cut in half in 35 years. At 3% it's closer to 20 years.

What kind of conservatism is it to advocate for either one?

Real conservatives believe in sound money. Less unsound money won't do.

The evidence is the two things, the fed funds rate and CPI, aren't correlated.

And CPI is rightly mocked because its components do not capture the inflation which has infected the cost of education, health care, housing, stocks, gold, intellectual property, et cetera in our life times.

It's the purchasing power of the dollar which has continued its inexorable decline which is the problem. We haven't had a sound dollar policy since the advent of the Great War in 1914. The desire for an independent monetary policy conducted by a Federal Reserve from 1913 came at the price of the ongoing robbery of the wealth of the people. World War couldn't have been financed without it, nor the Welfare State after it.

It's hardly a coincidence that political conservatism has been in retreat from the same time. You make a lie of the money in your pocket, you make a lie of everything else, too. Slowly at first, and then suddenly.

This American swindle will not continue forever.

 

In the just 5 months since Joe Biden won the mail-in vote, the purchasing power of the dollar has already declined by 1.56%

 

The Great War, depression, gold confiscation, dollar devaluation, fiat money, More War, and inflationary monetary policy all have done a real number on the dollar long before this, so it's understandable if no one really notices anymore. 

We're witnessing a seemingly infinite division in a race to the bottom. 

By Not Tapering, Fed Devalues Your $ In One Day By Almost What It Takes A Year To Do

The dollar fell 1.2% today because the Fed decided not to taper bond purchases, while year over year the dollar is down 1.5% to 1.8% because of inflation, as reported yesterday by the Bureau of Lies and Statistics, here:

The all items [Consumer Price] index increased 1.5 percent over the last 12 months. The [core] index [Personal Consumption Expenditures] for all items less food and energy has risen 1.8 percent over the last year; the 12-month change has remained in the range of 1.6 percent to 2.3 percent since June of 2011.

-----------------------------------------

By all means the Fed should have tapered, and increased interest rates to boot.

The war on the citizenry continues.

End the Fed.

(As far as broken clocks go, Ron Paul is correct twice every 24 hours).

How A Good Central Banker Is Supposed To Behave

not like this under Greenspan and Bernanke

David Merkel, here:

A good central bank fights the politics of the nation of which it is a part and tries to preserve purchasing power, ignoring labor unemployment. It tries to be a paper "gold standard." That has not been the Fed for 25+ years.

Forbes: The Fed Is The Most Hypocritical, Thieving, Incompetent Bank In The Country

Richard Salsman for Forbes here savages the thieving, incompetent US Federal Reserve for its utter hypocrisy in keeping comparatively well-capitalized big banks from paying out dividends when its own balance sheet is the most under-capitalized of all and pays out 100% of what it makes.

Not news, but it bears repeating as often as possible, especially when it's stated so well:

'[I]n the century prior to the Fed’s founding in 1913, U.S. commercial banks were far more liquid and far better capitalized; in the century since 1913, however, and especially since the FDIC was established in 1934, the banks’ liquidity and capital adequacy measures have steadily deteriorated. This artificial, policy-induced financial precariousness has been used routinely as a pretext to justify onerous regulations – which, it’s easy to notice, have never quite adequately curbed all the excessive risk-taking and hence periodic banking crises. Bank executives often oppose the onerous regulations, but not the government subsidies which invite them. ...

'What about the Fed? It’s now got the biggest balance sheet of all the major banks in the U.S. – $3.1 trillion in total assets (versus $2.2 trillion at Bank of America, the largest private-sector bank in the U.S.) – and yet the Fed also has only $55.1 billion in capital (versus $160.3 billion at Bank of America). That means the Fed’s capital/assets ratio is a mere 1.8%, less than a quarter of the average capital ratio for the top eighteen banks subject to CCAR (8.0%) and of the three banks recently deemed inadequate (8.2%). The Fed’s capital ratio is only 15% of the ratio of BB&T (11.5%), the most-capitalized of the top private banks. Moreover, the Fed’s dividend payout ratio is hardly conservative or capital-preserving (like 10-33%); it is a 100% payout, since the Fed pays all its income (mainly from Treasury bonds, notes and bills), none of which is taxed, straight to the Treasury. Whereas the Fed is leveraged 56:1 (liabilities/capital), the top eighteen banks are leveraged by just 12:1 (average), while the three censured banks are leveraged by only 10:1 (average). ...

'This is the same Fed which, over the past century, has debased the dollar to such a degree that it’s now worth only 5% of its initial real purchasing power in 1913 (whereas the dollar in 1913 was approximately as valuable as it was in 1813, because it was anchored by the gold standard, not by a flimsy Fed standard). This is the same Fed that Alan Greenspan touted in a 1996 speech as “the ultimate guardian of the purchasing power of our money.” Is it truly a “guardian” – or instead an incompetent, or perhaps a thief – who presides over a loss of 95%? This is the same Fed which now censures private banks for having capital levels many times greater than the Fed’s own capital level. Isn’t it high time we ended the hypocrisy whereby the politically-financially reckless among us rule the day?'

The big banks' off-balance-sheet assets make their capital ratios much worse than stated above, but that just makes them more like the Fed in that respect. Salsman points out that before 1913 when we still had true, private banking, capital ratios averaged 20%+, whereas today 8% is about as good as it gets. 

The 1932 Dollar Adjusted For CPI Through 2011

The 1932 dollar (when gold was last fixed at $20.67 the ounce) adjusted for CPI through 2011 comes to $16.50 ($1 x 1650%). If you had $20.67 to start in 1932, you'd need $341.06 today to have the identical amount in terms of CPI.

An ounce of gold held since 1932 is worth $1660 right now in 2013, an increase of 8031% since 1932 ($20.67 x 8031%).

Tough choice, right?

At 2% Inflation/Year, It Takes Just 35 Years To Devalue The Dollar 50%

The rule of 72.

Price Of Gold Adjusted To The Purchasing Power Of The Dollar

What is today's fair value price of an ounce of gold? Is it really $1,579 the ounce?

In 1913 the price of gold was still fixed at $20.67 the ounce and remained there until FDR devalued the dollar and fixed the price at $35 the ounce. It wasn't until 1971 that gold convertibility was finally ended and the dollar allowed to float completely freely. Today's gold price represents a price increase of over 7500 percent from $20.67 the ounce, which was gold's prevailing price after the War Between The States until the establishment of the Federal Reserve in 1913 and right up to the Great Depression election of FDR in 1932.

Does that sound right to you? 7500 percent?! 

One way to decide is to see what's happened to the dollar in terms of its purchasing power since 1913, which marked the end of a long 35 year period of dollar purchasing power stability.

From 1913 through 2011, the dollar's purchasing power has declined so much that it took $23.40 to buy in 2011 what $1 could buy in 1913. Another way to say that is the dollar has suffered a devaluation of 2340 percent over the period.

So if you applied that percentage to the price of gold in 1913, you'd arrive at a gold price in 2011 of $484 the ounce, suggesting that today's gold price is inflated by about 226 percent and needs to fall about $1,095 the ounce.

Opinions vary on the fair price of gold, from $218 (Woodhill's calculation of purchasing power) to $800 (Tamny's ten year average) and even today's market value around $1,500 (Lewis).

I think it is interesting that gold ended both 2003 and 2004 below $440 the ounce. It was in November of 2004 that GLD, the SPDR Gold Shares, first made its appearance on the NYSE, making daily speculation in gold like daily trading in a stock.

It has hardly looked back since, but it probably should, and probably will.