It is amazing to think that the dollar has gone so low. There was a time when the dollar was an honored instrument of financial transaction. Today, the world is divesting itself of dollars as fast as it can, and in some places like China, the dollar has been reduced to the status of the next door neighbors garbage.

This chart shows the drop in purchasing power of the US Dollar since the day we created the Federal Reserve in 1913.

Your dollar now has the purchasing power of a whopping (hold on to your seat) .04 CENTS.

The only solution to this is to stop printing money and reduce the amount of inflation we have, take our licks, and move back to sound money. Of course the Fed cant do that right now, as the only method of combating the slumping economy is ‘injecting liquidity’.

The world is moving back to the discipline of hard money (gold and silver), hopefully the US is not the last to catch on.

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This entry was posted on Tuesday, August 28th, 2007 at 9:52 pm and is filed under 3 - Understanding The Economy, 4 - Inflation, Charts, Collapse of the Dollar. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.