Wednesday, August 25, 2010

Inflation, simplified

This is the clearest explanation I have heard of what taking the dollar off the gold standard (thanks to the Federal Reserve Bank) has done to the value of our money:

In 1933, Americans were paid $20.67 for each ounce of gold they surrendered. If they had simply lost one of those ounces behind the sofa, today they could exchange it for over $1,200. But if they had taken that $20.67 and misplaced it until today, that amount of money would only buy what a mere $1.32 would have bought them the day they turned in their gold.

Virtual buckeyes to Tammy Bertram and Teri Cain Owens, via Facebook.

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