Call Me Stormy

Finding righteous currents in turbulent times

Archive for the tag “inflation”

What Is the Gold Standard?

Before 1974, U.S. dollars were backed by gold. This meant that the federal government could not print more money than it could redeem for gold. While this constrained the federal government, it also provided citizens with a relatively stable purchasing power for goods and services. Today’s paper currency has no intrinsic value. It is not based on the value of gold or anything else.

Under a gold standard, inflation was really limited. With floating value, or fiat, currency, however, some countries have seen inflation reach extremely high levels—sometimes enough to lead to economic collapse. Gold standards have historically provided more stable currencies with lower inflation than fiat currency. Should the United States return to a gold standard?

How the CPI Masks Inflation

Investment broker and financial commentator Peter Schiff says the public is right to distrust the CPI or Consumer Price Index.  It is no longer a tool to accurately measure inflation, but an instrument of propaganda the government uses to hide accelerating inflation from the public and financial markets.

To demonstrate his point, Schiff created a basket of 20 goods that consumers regularly purchase, ranging from eggs and beer to gasoline and housing rentals.  Prices for these items rose 44.3% during the last decade, but the government reported a rise in the CPI of just 27.5% during the same time frame.

Argentina Descends into Chaos

Rocked by high unemployment, double-digit inflation and a shrinking economy, Argentina is now teetering on the brink of mass unrest, as waves of looting are occurring around the nation. This follows the largest union strike of the past five years that effectively closed down Buenos Aires for a 24-hour period. Opposition has grown to the rule of Cristina Kirchner as the government has been unable to control the crime or straighten out the economic mess. H/T Moonbattery

 

 

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