Everything you wanted to know about monetary policy, in one easy chart! Poss great ad

[lastnymleft]

This chart says it all, about the Fed, the dollar, the gold standard, and inflation:

http://en.wikipedia.org/wiki/Image:USACPI1800.png
http://upload.wikimedia.org/wikipedia/en/e/ef/USACPI1800.png

I took it from: http://en.wikipedia.org/wiki/Federal_Reserve_System I figure the raw data would be readily available somewhere (perhaps the Fed itself).

Now if some graphics wizz wants to tart it up, and put on there some (any or all) other milestone dates:
1933 - Going off true gold standard
1945 - New Bretton Woods Agreement
1971 - Going off gold standard fully

An inversion of that would look pretty cool, too, labelled "Value of the Dollar", showing it flat, and then dropping precipitously.

If they weren't messing with the inflation figures, too, and were measuring them the same way they were in 1971, then we'd be at 10% or so inflation right now, and my money's on that curving taking on a more exponential curve, rather than a simple linear trend over the last few years.

I'm excited by this chart, because I think it could be a fantastic ad, in convincing a lot of people that currently think it is "kooky" to suggest going back onto a gold standard.

Imagine a big ad: that chart taking the top half (with some appropriate title, eg. What's happening to our dollar?), and then some very sharp bullet points done below explaining the problem, and the Dr Paul has the solution. eg the fact that since 1971, when we went totally off the gold standard, the Federal Reserve has injected $12 TRILLION dollars of new fiat currency, backed by nothing, into the system, creating the decline in the value of everybody's money. Since 1971, you could literally call it the theft of a nation. In fact, how about that for a title:
"Grand Theft Nation", or "Grand Theft Country"

And at the bottom of the ad, this quote, from Alan Greenspan:
"under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth... The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit... In the absence of the gold standard, there is no way to protect savings from confiscation through inflation." -- Greenspan, Alan; Gold and Economic Freedom, 1966

Anyone want to knock something like that up? We can get the message out pretty quickly with local newspaper ads. It's early in the week now. We can have them in for later this weekend, as adspace doesn't close off for another few days. Let's do it!

[mokkan88]

Interesting. War of 1812, Civil War, World War I, World War II, Vietnam, and it's gone up consistently since Vietnam.

[sgrooms]

nice graph!

[blakjak]

This is even a better graph to illustrate what happened when we went off the gold standard - which was 1971 - right where the huge spike started.

[crink]

Federal Reserve = Pwned!!

[misericordia]

wow. do it

[Maverick]

Inverted would look better. I think some of you are overestimating the intelligence of the average person. "Value of the Dollar" means a lot more than "Consumer Price Index" to the layman. Some random person will probably look at this graph, fail to understand the title, and say to themselves "wow, the graph is going up, so that must be good!"

[mavtek]

Yea the 1971 would be great! 1933 partial removal of the Gold Standard.

[golf247]

I figure the raw data would be readily available somewhere (perhaps the Fed itself).

Correct. I've used this data before and got it here:

http://minneapolisfed.org/Research/data/us/calc/hist1800.cfm

[lastnymleft]

Correct. I've used this data before and got it here:

http://minneapolisfed.org/Research/data/us/calc/hist1800.cfm

Interesting how they state:
"$1 in 1850 is worth $24.71 in 2007."

Really, it should have been phrased:
"What you could buy for $1 in 1850 will cost you $24.71 in 2007"
"It'll cost you $24.71 in 2007 to buy what you could buy for $1 in 1850"



wow. do it

What's with the "do it"? I've launched two other very important projects that should be buzzing with activity:
(1) A project to expose the MSM's shutdown of Dr Paul, where John McCain received 85 times more media coverage last week than Dr Paul
http://www.ronpaulforums.com/showthread.php?t=100886
and
(2) A project to accelerate the acquisition of the 180,000 Precinct Leaders
http://www.ronpaulforums.com/showthread.php?t=102966

I've been calling out for HELP! on each of those, and nobody has stepped up to help. Do you think the r3V0Lution gets delivered by Santa? I need help! Step up. Offer to pick up some of the load. We must all do everything that we can to get Dr Paul elected, and these are very high value projects.

Who will offer to help?

[Ex Post Facto]

Yeah it's the reason you need more than one income to support a family nowdays.

[humanic]

1933 - Going off true gold standard
1945 - New Bretton Woods Agreement
1971 - Going off gold standard fully


Alan Greenspan was on The Daily Show recently. When asked why we need a the Fed, Greenspan stated: "You didn't need a central bank when we were on the gold standard.

Is this quote not an effective admission by Alan Greenspan that the Fed was created unnecessarily?

Am I missing something here?

Here is a partial transcript of the interview that I made from which this quote was taken:



STEWART: So the Fed, or whoever is leading it, could in fact-- if he wanted to-- goof on all of us?

GREENSPAN: He wouldn't want to.

STEWART: When you say open market, I always wonder. Cause-- you know, the people that-- many people are free market capitalists and they always talk about free market capitalism and-- and "that is are economic theory." So why do we have a Fed? Isn't-- Isn't the free market-- Wouldn't the market take care of interest rates and all that? Why do we have someone adjusting the rates if we are a free market society?

GREENSPAN: You're raising a very fundamental question.

STEWART: I am? Should I leave?

GREENSPAN: Stay for a while. Since you got your Emmy you are qualified.

STEWART: Thank you very much.

GREENSPAN: Uhhh... You didn't need a central bank when we were on the gold standard, which is back in the 19th century. And, all these automatic things would occur because people would buy and sell gold and the markets would do what the Fed does now. BUT, most everybody in the world by the 1930s decided that the gold standard was strangling the economy and uh, universally the gold standard was abandoned. BUT, you need somebody to determine-- or some mechanism-- of how much money is out there, because remember: the amount of money relates to the amount of inflation in an economy, and inflation...

STEWART: (sarcastically) You think I'd forget that? What are you? Sure I know that...

GREENSPAN: I-- I just couldn't be sure.

STEWART: (sarcastically) No. I live by it.

GREENSPAN: Splendid. In any event, the more money you have relative to to goods the more inflation you have, and that's not good, so...

STEWART: So we're not a free market then...

GREENSPAN: No, no...

STEWART: ...there is an invisisble-- there is a "benevolent" hand that touches us.

GREENSPAN: Absolutely. You are quite correct. To the extent that that there is a central bank governing the amount of money in the system, that is not a free market, and most people call it "regulation."


Watch the full interview here:
http://www.thedailyshow.com/video/index.jhtml?videoId=102970&title=alan-greenspan

[tropicangela]

Check this out - lots of graphs here:

http://mwhodges.home.att.net/summary.htm


I got the site from this vid:

http://www.youtube.com/watch?v=9fv1DqIen28

[Austin]

I am interested in seeing a "Value of the Dollar" graph..

[Rhys]

If Luskin wasn't a terd, we could run with a Paulinomics education campaign. a tour of some of our financial people talking to buisness people and GOP with slides of inflation and spending and gold and all would be very effective.

[tropicangela]

He has a graph that represents the OP's and more here:

http://mwhodges.home.att.net/inflation.htm

http://mwhodges.home.att.net/inflation.gif

http://mwhodges.home.att.net/m3-vs-cpi.gif

[tonyr1988]

Hey - that's gnuplot, isn't it (the OP)? Sweet.

It's rare to find someone else using awesome software. :P

[Neomatrix]

Federal Reserve = Pwned!!

Ha ha QFT:D

[Richandler]

Add a little line for when we were taken off the gold standard and it'll be perfect.

[Neomatrix]

Free The Markets! Vote Ron Paul!

[tropicangela]

http://mwhodges.home.att.net/cpi-1800.gif

[lastnymleft]

Hmm. Just thinking again about that graph, and in particular since 1971. It seems fairly linear. Outrageously steep, but linear.

I'm not sure that's correct. Don Luskin (pttoooiiee!), before he crossed to the dark side, and Peter Schmidt, both have made comments about the current level of inflation not being the real one. The Government is hiding the inflation, because they print so much money, they don't want the real numbers shown. Estimates have the REAL inflation rate at 10%. They've managed to suppress it by adjusting the formula for how it is calculated - since 1971. So, if we were stll using the OLD measure of inflation, what would the graph look like? My guess is even more scary. I'm thinking it's likely to be non-linear, but rather true exponential. Now THAT would make for an awesome graph!

Are there any economics/finance wizs/buffs out there that would want to have a good at finding / producing such a graph? I really think this basic graph is how we will win. It's such an in-your-face smoking gun that it will swing anybody that looks at it.

[Voodoo]

http://www.nowandfutures.com/index.html

http://www.nowandfutures.com/images/predict_inflation.png

[inibo]

http://www.norfed.org/graphics/home/purchasepower.jpghttp://www.norfed.org/graphics/home/nationaldebt.jpg (http://isilion.blogsome.com/2008/01/12/149/)

[lastnymleft]

http://www.norfed.org/graphics/home/purchasepower.jpghttp://www.norfed.org/graphics/home/nationaldebt.jpg (http://isilion.blogsome.com/2008/01/12/149/)

I particularly love that debt graph. It clearly parallels the inflation graph, and could be used as another means to support the gold standard. The rise since 1971 is exceptional.

The other graph is not so easy to interpret, in that a decline in the value of the dollar might be "normal" for an economy. We would need to show what was happening in the lead up to 1913, in order to show that the creation of the Fed in 1913 is the root cause of our problems. That's why I like the 1800 onwards graphs. We can, at this point, at least point to going off the gold standard as being a Bad Thing. Let's (a) try to find more such graphs, other than CPI and debt, that support that, and (b) try to push back the date on evidence of problems to 1913, by showing a similar problem developing from 1913, by comparing with earlier data. What metrics would we be able to show that would show problems like that? Does anybody know of such graphs?

[lastnymleft]

Anybody have input to the last post?