Over the course of the last year, readers of this blog are aware that the United States has strayed away from the firm monetary policy1 as outlined in the U. S. Constitution.2
The following video is part one of a three part series about the history – as well as the causes and effects – of hyperinflation. Although it is somewhat partisan, the video provokes a discussion about the competing forces over control of U. S. monetary policy.
Since 1913, the same year the Federal Reserve Act was enacted3, the dollar,
. . . has lost 96% of its purchasing power due to inflation. A common misconception today is that prices for goods and services have been going up. The truth of the matter is that prices have remained nearly the same in precious metals terms; it is the value of the dollar that has declined. It simply takes more and more dollars to buy the same products, since the dollar’s value has become less and less. Gold and silver were scrapped as a “control” mechanism for our economy, and ever since, we have been circulating a “robust paper” in place of real money. This “robust paper” is now the world’s reserve currency in central banks. From 2002 – 2005, the U.S. dollar lost over 40% of its value to the Euro, and had similar losses to other major currencies of the world.”4
As the government continues its inflationary policies based on Keynesian economics5, China and other nations continue to push for replacing the dollar as the international reserve currency.6
Click here to view the embedded video.
How should the U.S. solve its insolvency problem? (Pun intended.)
Sources:
- Money.
- Gold and Silver Coin as Tender in Payment.
- Federal Reserve Act”. Wikipedia. 1 Oct 2009.
- “U.S. Dollar”. First National Bullion. 1 Oct 2009.
- Keynesian Economics and Savings.
- Dollar as Reserve Currency. See also, Goldstein, Matthew. “Q=A – Replacing the Dollar as the Reserve Currency”. 8 Jul 2009. Reuters. 1 Oct 2009.
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