The Day the Dollar Died to Accountability

On August 15, 1971 the U.S. dollar died. One dollar from 1971 will buy $5.44 of today’s dollars. Equivalently, one dollar today equals 18 1971 cents. It’s a funny concept, and while its still pretty easy to scrounge up pre-1971 currency (in the form of coins), it is not really easy to use that money to buy useful products or luxury items. Gold, in particular, is becoming extremely expensive admittedly through over-advertising, over-speculation, lack of trust in the Federal Reserve, etc. I would not, at this point, buy any more gold at its current value of $1100 while the stock market has not yet fully recovered, however I would not advise against it either for surely in our current course of historical unfolding the future price of gold looks high (in fiat currency exchange). See below for a five year gold chart in terms of dollars per ounce.

The dollar died and is still being killed because of new government programs, a hefty trade deficit, and the recent history of developing countries accumulating unheard of amounts of the currency and government bonds for ‘protection’. Since U.S. Government bonds are guaranteed by the full faith of the largest economy and strongest military the world has ever seen. On the bright side, one U.S. dollar today will buy you more electronics than in the 1970’s or 1980’s or 1990’s  :) . Below you can view Professor McCallum’s (Associate Professor of Computer Science from NUS) chart of prices of computer parts and memory over time.

component and memory price trend

component and memory price trend

Chart Credit

“NYMEX COMEX Gold Prices.” Current Primary and Scrap Metal Price. Web. 17 Dec. 2009. <http://www.metalprices.com/FreeSite/metals/gold/gold.asp>.

McCallum, John C. “Graph Showing Memory Prices Decreasing with Time.” Biographical Information for Dr John C McCallum. Web. 17 Dec. 2009. <http://www.jcmit.com/mem2007.htm>.

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