Thursday, 19 October 2017


Gold Content of the U.S. Dollar from 1792-2008

Posted by
August 16, 2012
in Blog

Do you remember the old Wendy’s commercials where the little ol’ lady would find her burger to be “lacking”? In an effort to keep prices from rising amidst perennial inflation, businesses reduce the size of their products; customers are much more sensitive to price rises than to quality degradation. That is why the price system works so well: it conveys very unambiguous and easy-to-understand information about a product or service. So producers will sometimes try to change the size of the product slightly, rather than change the price slightly, in the hopes that the consumer will not notice. Check out the price of a 64 oz. carton of orange juice at your local store if you don’t believe us. Fact is, you probably can’t, because they’ve reduced the sizes to 61.9 oz. or less. This is also why the CPI won’t change and the Fed can brag about keeping inflation low (note to Paul Krugman: Yes, there is inflation occurring).

The same has happened to the money in our “money.” The U.S. dollar used to be as “good as gold,” but where’s the beef?  Here’s a little info-graphic to give you an idea of what went wrong: