That’s a lot of dollars, huh? That translates into $37,321 per person over 19. Sound reasonable? In 1920, there was $55 in circulation for every citizen, regardless of age. Since the dictionary defines inflation, as, “An increase in the money supply,” maybe the Fed chairman doesn’t believe in definitions. Is a dictionary suitable for finding the meaning of words? Would a dictionary define other words in the English lexicon, accurately? I’ve looked up several words in my Webster’s New World College Dictionary, and they seem to be accurate.
When JFK was alive, he wanted to get rid of the Federal Reserve, and have the U.S. Treasury print the paper money. Guess it never happened, but it wouldn’t make much difference anyway, because the U.S. dollars are backed by the “Full Faith and Credit of the United States Government,” which is comforting to many.
The Fed has raised the interest rate eight times since Biden took office, and more increases are in the wings. The false reasoning behind this, is that by raising interest rates, fewer people will buy things, and this will decrease the money supply. This is absurd reasoning. Admittedly, a small percentage of inflation may be caused by people buying things, but since Biden has been in office, he has spent well over $5 trillion dollars, and spending $5 trillion un-backed dollars, has placed $5 trillion dollars into circulation, which has caused inflation. The Fed thinks that the more commerce and business they destroy, the better it is! Firemen don’t put out fires with gasoline. They use water. Get it?
The Fed’s absurd efforts to stop inflation, have destroyed the real estate industry, auto sales, home building, and anything purchased at any level, by a store or industry, which sells anything for dollars, and especially on credit. Many tens of thousands of employees are being laid off. Will they find another job? Gold and silver go up and down, due to supply and demand, but over the years, a jagged line, is always up. I was selling an ounce of gold at $250, when I began my adventure into this industry. I always knew what the end would be, almost like a western movie always have the good guys winning. Precious metals will always win. Watched Goldfinger last night, and when I was in the theatre business, I played that film, and did extremely well! I had to raise m admission from 75 Cents, to a dollar. Goldfinger, is the best of the 007 films, and wasn’t the late Sean Connery a handsome brute? He’s dead now. I played Goldfinger in one of my theatres, 59 years ago! I was 30. I can’t believe I did so much at a young age.
If you have ever borrowed money from a bank or lending institution, they will check your credit rating, and if it is good, they will require the loan to be secured by a home, car, or something physical. This backing, be it a car title or home deed, is just in case you fail to repay your loan, they can sell the security, and not lose the money they loaned. The outfit loaning you money, has a lien on your car or home, till the loan is retired. While most loans from banks and lending institutions, are literally created out of thin air, at least they are secured by a physical, tangible, or legal device or object.
When Biden and the Congress increase the currency supply, the only ‘security,’ is the good name and ‘faith’ you may have, of the federal government’s ‘money.’ Donald Trump cut hundreds of pointless spendings, and we had little inflation. He did spend a lot re-building our armed forces, which Obama had decimated, but even those billions didn’t give us inflation like the Biden outfit has.
Since the M3 or money supply, has gone from $55 per person, to $37,321 per person, Could a first grader figure out what this could mean? Stott’s Law says, that “The more of anything there is, the less they will be worth,” and this has to include dollars per person in circulation, doesn’t it?
OLD MOVIES
Turner Classic Movies, is one of my favorite channels. No interruptions by commercials, and really good films, many times from the pre-1950’s. I always notice that everyone smoked in the old movies, and it may shock us now, knowing many probably died of lung cancer, but smoking was universal back then. When, in 1965, it was shown that smoking causes lung cancer, suddenly smoking declined, and today, I think it is less than 15% of Americans killing themselves with tobacco. My Dad died of lung cancer two years before the revelation and adverse publicity of smoking, so I guess I’ll have to excuse him. Compare smokers before the lung cancer publicity, and compare it to silver and gold popularity. Before 1965, no one cared. After 1965, everyone cared, and eventually most stopped. Today, or even when I started doing metals in 1977, few ever thought about the ultimate end of paper money backed by nothing, but now, and as each year passes, more and more will come to realize the futility of saving in dollars, because its like storing water in a leaky bucket. More and more, as each year passes, like not smoking, will realize futility of saving in dollars.
The Fed’s ‘goal,’ is to keep inflation at 2%. In other words, trying to keep your hundred dollar bill buying $98 worth of merchandise next year, rather than currently buying $93 worth, next year. As each year passes, more and more people will stop saying that ‘prices are going up again,’ and will begin saying, ’the dollar is going down again,’ and both mean the same. The eggs at 99 cents a dozen are the same eggs at $3.50 a dozen. 20 cents a gallon gasoline when I was a kid, is the same gasoline at $4.09 today. If I had saved a dollar when I was a kid, it would have bought 20 Hershey bars, and now? You know the answer.
-Don Stott –don@coloradogold.com