US $1 Bill vs US $1 Gold Coin: How Inflation Impacts You

I’m going to let you decide if inflation is such a good thing by looking at what happens to the purchasing power of a $1 federal reserve note and then a $1 gold coin.

US Mint 1 Dollar Gold Coin

In the beginning of the US Dollar’s life cycle, where just before 1912, a 1/20th of an ounce of gold coin backed a $1 bill and you could buy 11 loaves of bread with that dollar, but then the US government started to transition and take value out of the dollar.

By 1920, the 1 dollar bill could only buy eight loaves of bread. The financial system was flooded with dollar bills but you could still convert this into a 20th of an ounce of gold, but by 1933, it was really good for people because that 20th of an ounce of gold or 4 one dollar bills actually could buy you 14 loaves of bread.

Well then the real devaluation began. So by 1971, what would have bought you 14 loaves of bread now that only buys you six.

Starting to get the picture?

Today that same 1/20th of an ounce of gold can buy 66 loaves of bread. By the year 2000 when there was another monetary regime shift and they went to inflation targeting because remember peak debt hit in 1997 and one US dollar can buy a little more than half of a loaf of bread. 1 dollar only buys you that much.

Maybe even a little bit less.

Can you see the pattern?

We have volunteered to be apart of inflation and we don’t understand inflation by design and perception management keeps us in the system and keeps us believing that well, this dollar can’t but help to regain some of its past value, especially when it’s still the dollar.

The Federal Reserve has a digital dollar coming up. I got to say that enables them to keep this game going, because there’s no limitations to the numbers that they can can go out past that 0.0, zero, but a 20th of an ounce of gold as of 2020 that use to cost 1 dollar bill would buy you 28 loaves of bread.

Get the picture?

This is why you need gold.

So I would say that without a doubt, it is time to cover your ass. You do that with the appreciating assets that rise with the cost of inflation, which is made up of physical gold and physical silver in your possession.

--

--

--

$Gold and $silver analysts, tech head, photographer.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Personal Loan?

Home prices WENT UP over the last few months due to limited inventory and extreme buyer demand…

Saving Money Prior to Moving

Why Texas Real Estate Has Always Been Sexy For Investors

Lessons learned from day trading in college — Forever Hobbyist

I couldn’t stop the money coming if I tried

How to Turn Your Side Hustle into a Massive Tax Deduction

What is a withdrawn loan status?

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
GoldBuffalos

GoldBuffalos

$Gold and $silver analysts, tech head, photographer.

More from Medium

The Ignorant Finance Course

Investing lessons from a teenager.

3 vital things you didn’t know about the Relative Strength Index

Why I Am Short Home Builders