Not worth a dime

The decline of the dollar
The decline of the dollar

Remember that old saying: “That thing-a-ma-gig is not worth a dime?” Guess what is not worth a dime today…the dollar! It is worth somewhere between .04 and .06 cents in 1920 money rates. That means that what cost you $1 today cost less than a dime 90 years ago. Everybody is jumping up and down about the price of gold and oil. Their price is not going up; the purchasing price of the dollar is going down. This is not a Republican or Democrat mess up. It is the fact that Federal Reserve can print money most any time it wants.
When I began teaching in West Virginia in 1975, my salary was less than $8,000 per year. When I retired in 2005 I was making about $35,000 per year. If you figure out how much $8,000 dollars in 1975 converts to in 2005 dollars, it comes out to about $30,000. That means my salary went up $5,000 in 30 years of teaching. Now, that is really climbing the socio-economic ladder!
Let me explain it another way. If a company is worth 1 million dollars and sells one million shares of stock, each stock share is worth $1. If the company decides to double the number of stocks, the value of the stocks is reduced by one half to $.50, and so on and so on.
Now don’t get your panties in a twist! This financial philosophy has allowed us to live “high on the hog” for a long time. Even though we have not gotten any richer, we keep getting more dollars to spend. This makes us feel better, but in reality we are losing our spending power. We are becoming a third-world country which will allow our labor to compete in the world market. You have got to give the guys in charge, whoever they are, credit for such a masterful way of making us feel good about ourselves. The problem is this: the proverbial story of the lemmings heading for the cliff and jumping off as if they could fly.
The government had to print a lot of money to loan the crooked banks so that they would not take our homes, but the question now is, can the government take some of that money off the table. If they do, the dollar would stop losing its value and inflation would not become rampant.
Here is a link where you can calculate money worth based on inflation.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s