109 years ago, the US Federal Reserve was created. , the purchasing power of the US dollar has declined significantly since that day. Over 96% of his dollar purchasing power has been lost to inflation since the Fed took office.
After the Federal Reserve was created on December 24, 1913, the purchasing power of the US dollar declined in large part due to rising inflation in America. American economist and social theorist Thomas Sowell called the Fed a “cancer,” and former politicians like Ron Paul called on the public to get rid of it. Before the creation of the Fed on December 23, 1913, America had two central banks before the current United States Central Bank.
The first United States Central Bank was founded in 1791 by him. This was the First Bank of the United States, a financial institution chartered by Congress at the time. His second attempt to establish a central bank in America came in 1816 when the Second Bank of the United States was established. The third central bank, the current financial institution known as the Federal Reserve System as we know it today, was formally established just before Christmas Eve 109 years ago.
Because of the Panic of 1907, Americans at the time were convinced they needed a central bank. A series of secret meetings on Jekyll Island involving America’s top financial elite and the so-called “Money Trust” laid the foundation for the Federal Reserve. The American public was kept secret about the meeting between Senator Nelson Aldrich and the “Morgan family“
. November 20, 1910 and November 30, 1910. The House of Representatives voted for the Federal Reserve Act on December 22, 1913, the U.S. Senate voted for it the next day, and Woodrow his President Wilson enacted it on Christmas Eve. rice field. Since this point, the US dollar, which Americans are using to claim to be a “promissory note” backed by the Federal Reserve, has lost a significant amount of value.
Furthermore, some say that prices generally rise only if the pace of monetary expansion outpaces the rate of increase in commodity production. However, some individuals argue that other types of government interference, such as irrational spending, sanctions and regulations, can cause the prices of goods and services to rise unnaturally.
} According to statistics, between 1913 and 2017, the US dollar lost more than 96% of its purchasing power, as indicated by the American Enterprise Institute. According to the 2022 index, one dollar in 1913 is worth approximately $30.07 at current purchasing power . According to one report, “from 1913 to today, the dollar has averaged 3.17 percent annual inflation, and its cumulative value has risen by 2,907.18 percent.”
Last year, a reportpublished by visualcapitalist.com stated how in 1933 he could buy 10 bottles of beer for a dollar. is explained. If that $1 buys you a small cup of coffee, you’re lucky. Since 2020, inflation has spiked as the US Federal Reserve has significantly increased the money supply over the past three years.
Visualcapitalist.com author Govind Bhutada explains: 2021 years. He notes,“The impact of the money supply increase was amplified by the 2008 financial crisis and more recently by the COVID-19 pandemic. In fact, about 20% of all U.S. dollars in the money supply %, creating $3.4 trillion in 2020 alone.”
The war between Ukraine and Russia has driven energy prices up significantly as many Western countries, including the United States, have imposed sanctions on Russia. As Russia is one of the world’s largest suppliers of fossil fuels, the sanctions have caused oil and natural gas prices to rise significantly. Additionally, US government officials have imposed a lot of bureaucracy on companies that do not comply with so-called climate change reforms.
U.S. government military spending, a significant increase in M2 by the Federal Reserve since 2020, and widespread climate change regulation all contribute to higher prices across the country. This is why the free market favors alternatives such as precious metals and cryptocurrencies. Precious metals, for example, are scarce and cannot be printed on a whim like legal tender.
Metals such as gold and silver also have intrinsic value due to their widespread use in jewelry, computer components, coins, and more. However, both precious metals and fiat currencies can be cumbersome in physical form, as holding large stacks of gold or US dollars requires some degree of security and secrecy. Cryptocurrencies like Bitcoin (BTC) are also scarce and cannot be printed on a whim like promissory notes.
Crypto-assets like Bitcoin are highly portable and require security and confidentiality, but at very little cost. Neither of these types of alternative currencies have depreciated like fiat currencies around the world in the last 100 years. The data clearly show that the US dollar is not a store of value over the long term. As economist Friedrich A. Hayek once said, good money does not exist until it is removed from the state.
“I don’t think we can get a lot of money again before we take things out of government hands. , using cunning detours to introduce something they can’t stop,” Hayek said.
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