Quote:
Originally Posted by sjh
Between 1920 to 1964 a gallon of gas cost a quarter.
During that same period of time the quarter was 90% silver. That is our currency was tied to a tangible commodity, precious metal.
Starting in 1964 the silver content of coins was drastically reduced. The currency was separated from any real asset. The Fed could and did print money whenever it wished.
Today, if you had a quarter minted between 1920 to 1964 and determined the current market value of silver in the coin it would buy a gallon of gas.
The single greatest cause of elevated gas prices, much less the rest of the deterioration of our nation (US), is the refusal to control our spending and to therefore print valueless money.
It's not the Arabs or Chinese who are injuring us. We're doing a fine job all by ourselves.
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You can't have a modern currency based on precious metals, no developed country is seriously considering reverting back to the gold standard, it would cause major problems.
Silver like gold and oil are currently in a bubble.
Just because X amount of silver equals a gallon of gas doesn't mean their was inflation of X amount over that period.
Also remember that back in 2008 during the last fuel run up the price of silver was roughly $11 an ounce, so your comparison wouldn't have been relevant three years ago.
Lets put it this way, just because a 560SEL cost $45k in 1987, and a new S550 costs $98k doesn't mean their has been massive inflation in the past couple of decades. For starters your not comparing equal cars, the modern vehicle has more stuff in it and costs more to produce.
I'm not saying that the price of fuel shouldn't increase, it should. What I'm saying is the current increase isn't because of natural market forces and is being forced on the market by a relatively small group of businesses and individuals. Oil prices should go up a few percent a year to take into account inflation, increased demand, and regulations. Not 100% in 12 months.