Economics Questions

Re: Is there truth to the dollar not losing 95% of it's value?

Clayton — Thu, 01 Mar 2012 06:56:37 GMT

The rise in the price of labor proves our point. A dollar buys fewer hours of labor than it used to.

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Clayton -

Re: Is there truth to the dollar not losing 95% of it's value?

Jargon — Thu, 01 Mar 2012 06:20:46 GMT

Dunno if this answers but:

Oz Gold 1913: $18.92

Oz Gold 2012: $1725

1725/18.92 = %91

Are the markets perfectly accurate, now or then? No. But I find this better than swamping through CPI and correcting it.

Re: Is there truth to the dollar not losing 95% of it's value?

Gero — Thu, 01 Mar 2012 05:59:04 GMT

I have repeatedly seen the 95% statistic, but have never seen how it was calculated. Still, the dollar’s value has crashed over time. Although the Consumer Price Index (CPI) is a poor measurement for inflation, even it shows massive dollar devaluation. $1 in 1913 has the same buying power as $22.90 in 2012, according to the Bureau of Labor Statistics’ CPI inflation calculator.

Using basic math, hypothetically, if $1 in 1913 has the same buying power as $2 dollars in 1914, that should mean the dollar devalued by 100%. So, if I am mathematically correct, according to the CPI, the dollar has devalued by about 2,200%.

Re: Is there truth to the dollar not losing 95% of it's value?

Mtn Dew — Thu, 01 Mar 2012 05:53:51 GMT

The first quote has it right in tha tthe dollar did lose value, but the quote pretends its not a big issue because income went up by a bigger margin. The second quote is flat out false - a dollar has indeed lost 95% of its value since 1913.

The dollar has lost value, but no one that says that means our society has lost 95% of its value. The point is that we've had a large degree of inflation, which is A) robbed people of their savings and made it much harder to save money and B) screwed up business calculation. Another point is that The Fed is a faliure in terms of keeping the dollar stable. Losing 95% of its value ain't stability.

Is there truth to the dollar not losing 95% of it's value?

SortOfAmish — Thu, 01 Mar 2012 05:38:51 GMT

I was browsing reddit and came across this: http://www.reddit.com/r/EnoughPaulSpam/comments/qby0h/no_ron_paul_the_dollar_did_not_really_lose_95_of/

http://realfactbias.blogspot.com/2012/02/no-dollar-did-not-really-lose-95-of-its.html

Let us take at the period from 1913-2006, where we have complete data. So what do they mean, when they say the dollar lost 95.1% of its value in those 93 years? Essentially, an average good/service that cost $1 in 2006, used to be priced at 4.9 cents in 1913. In other words, the average price level of goods/services increased by 1930% since 1913. True, but guess what, average earned income increased by 6560% during the same time period. Anyone who says the dollar lost value, is really trying to sell the false point of view, that somehow things were better off in 1913.

http://www.hyperinflation-us.com/Ron_Paul_crazy_end_the_fed_and_inflation.html

Who has lost 95 cents on the dollar? Virtually nobody. Ron Paul misleadingly suggests that if a family had stashed some cash back in 1913, by 2009 it would have in fact lost 95% of its value.