Back in the early 1970s some creative writers developed the concept and script to the television show, “The Six Million Dollar Man.” If one were to appropriately name that show today, it would be “The Quarter Billion Dollar Man.”
Wikipedia’s Interpretation of Inflation
A quick glance at Wikipedia suggests that the $6 million dollars in 1971 would be equivalent to $35 million at the end of 2019. This implies an annual inflation rate of 3.75% and a loss of purchasing power of about 83%. However, if one compares this loss of purchasing power relative to gold, then the loss is significantly greater as is the implied inflation rate.
Back of Envelope Calculation
Back in 1971 a person could have converted his or her $35 into one ounce of gold. So, $6,000,000 could have been converted into 171,429 ounces of gold.
Fast forward to the end of 2019 and an ounce of gold required about $1,500 of paper dollars: $1,500 per ounce X 171,429 ounces of gold = $257,142,857 (A Quarter Billion Dollars). Another way to look at this is the paper dollar (USD) has lost nearly 98% of its purchasing power relative to the purchasing power of gold since 1971 (this is equivalent to an 8.14% inflation rate).
|Gold (USD/ounce)||$35||$1,500||42.86x or|
Are we wrong?
3 thoughts on “USAF Colonel Steve Austin, The Quarter Billion Dollar Man”
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DOW Stock Market
Year end close 1971: 890.20 or 25.43 ounces of gold at $35/oz
Year end close 2019: 28,957 or 19.31 ounces of gold at $1500/oz.
RESULT: The Dow is actually DOWN a total of 30.1% since 1971 once one factors in the loss of purchasing power of the USD versus gold.
Your analysis and my Dow/gold comparison help explain the resistance by any and all measures to not have a fiat currency 100% backed by, and convertible into, gold.
The financial system based on fiat currency backed by nothing but faith appears to be a form of pyramid/Ponzi scheme, but the theft is so small over short periods that most people don’t recognize the dangers the results for what they are: theft and fraud.
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