The graph below shows the purchasing power of the US dollar since 1913. 1913 is when the Federal Reserve, which is actually a privately-owned central bank, took over the US banking system. As you can see, it’s been pretty much downhill since the Fed took over. In fact, the dollar has lost over 96% of its value. That means today’s dollar would be worth less than 4 cents back in 1913.
How does the Federal Reserve devalue the dollar? By printing more money. Printing more money causes monetary inflation. That means there are more dollars in circulation, but just because there is more paper money floating around, that doesn’t mean value has been created. All you really get is price inflation. Here’s an extreme example: Let’s say the Federal Reserve just gave everyone in America $1 million. Wouldn’t that be great if everyone in America became a millionaire over night? Unfortunately, nothing would change, except prices would increase. Think about it. How much would you have to pay the plumber to come to your house, if he’s already a millionaire?
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