George Reisman's Blog on Economics, Politics, Society, and Culture

This blog is a commentary on contemporary business, politics, economics, society, and culture, based on the values of Reason, Rational Self-Interest, and Laissez-Faire Capitalism. Its intellectual foundations are Ayn Rand's philosophy of Objectivism and the theory of the Austrian and British Classical schools of economics as expressed in the writings of Mises, Böhm-Bawerk, Menger, Ricardo, Smith, James and John Stuart Mill, Bastiat, and Hazlitt, and in my own writings.

Sunday, May 14, 2023

Inflation Is In the Paper Money: Some Examples

Did you know that today you can buy a brand new economy-type car, such as a Honda Civic, for the same price people paid 100 years ago for a Model T Ford?

The price of each is/was just $300, in $20 US gold coins, each coin containing an ounce of gold, which quantity of gold has a current market price of 2,000 paper dollars. Fifteen such coins have a paper-dollar market value of $30,000, just about the price of a new Honda Civic.

Some more startling facts: The Dow Jones Average, which closed last Friday at 33,301, closed at 333.01 in gold dollars, defined as .05 ounces of gold per dollar. The paper dollar itself, quoted in gold dollars, closed at ONE GOLD CENT PER PAPER DOLLAR.