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The Value of a Dollar

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@drutter
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That what 1 USD looked like about 100 years ago. That very coin was used to make purchases of any manner of goods and services.

It's thick and heavy. If you haven't held a dollar like this before, imagine the weight of 4 quarters (or 10 dimes), in a single coin. That's precisely how much it weighed. (This particular dollar is American, but we had very similar money here in Canada at that time.)

One dollar. Ten dollars would be a stack of ten heavy coins, just like this one. One hundred dollars would be ten stacks of ten big coins. Literally pounds of precious metal.

I've written dozens of articles and done dozens of videos on the topics of value, currency, money, purchasing power, inflation, and so on. To illustrate my point this time, I'd like to show you a legal document belonging to a relative of mine. It's okay, he's dead. He definitely bought the farm!

I've been getting into genealogy lately, and uncovered a lot of interesting stuff.

Rev Richard Kinley (born in Prince Edward Island, Canada and died in Saskatchewan, Canada) was my great great great grandfather. He was an accomplished farmer, ship captain, minister, and family man. As an old widower, he briefly married a younger widow, shortly before he died. This document is part of the legal proceedings that took place afterward, in which she took control of his estate, sold all his property and belongings, and gave some of the remaining cash to my family members.

A hardworking and resourceful man, Richard owned large tracts of land all across the prairies of Canada by the time he died. Some bigger (and in better locations) than others, but even so, look at those amazing prices!

For 7 or 8 hundred dollars, you could have a huge piece of land (and buildings on it)!

'E pluribus unum' means 'one from many'. In other words, we humans can be more than the sum of our parts. Together, if we do it right, we can accomplish more than we ever could otherwise. The USA did away with that motto in favour of "in God we trust" in the 1950s.)

Oh, what I wouldn't give for some farmland of my own. Imagine that, never paying a mortgage? Never paying rent? And the land you're living on is not just yours, but it's constantly producing food and income?!

It appears that the "value of a dollar" has been going down steadily for generations now.

What changed?

One thing which changed was the material the dollars are made of. They used to be silver bullion, with a bit of copper alloyed in for strength. They could be melted down and used industrially, or to make more money. Their intrinsic value never goes away or changes. They always contain that silver, which is the money itself.

Nowadays, a dollar is digits in a computer, or maybe a slip of paper, plastic, cotton, or a small steel coin. They're still one dollar each, even the digital one, but their intrinsic value has changed. No longer a heavy coin of precious metals, stamped to indicate their denomination, weight, purity, and other specifications.

They're dollars because somebody said they are. They have purcashing power because somebody said so. Their intrinsic value is zero, or near zero. Just fiat dollars.

My young child once said to me "stuff goes up in price over time". I asked why, and he said "that's always how it goes, back in cowboy days you can get a bag of candy for one cent, now it's five dollars". Good insight, for a little kid. And it touches on the truth underlying all this - dollars have become worth less, over time, because the physical matter in the items representing those dollars has become worth less.

800 dollars used to buy a farm because each dollar was a heavy medallion made of precious metal. If that's what dollars were, again today in 2020, than we would see price deflation to the point that farms once again cost about $800.

But that's not happening. They're now creating TRILLIONS of dollars, all digital and made of absolutely nothing, in the name of saving the economy. Meanwhile, banks and governments are demanding citizens turn in all coins to fight the supposed "coin shortage".

That's why you're lucky if you can find a farm under $800,000 nowadays.

And it's why mints are demanding people sell them coins (for paper or digital dollars), and claiming it's time to get rid of coins altogether because "it's too expensive to make them".

Think about that. It's too expensive to make coins? When money itself is supposedly "too expensive", there's a problem with the money, and the entire monetary system.

What's really sad? Almost nobody knows and understands the basic truths and history mentioned in this article.

Most people don't know the value of a dollar.

DRutter

Posted Using LeoFinance