Actual Value of $$$

This article came from practical experience, finally understood. For philosophical and moral considerations, try back later.

Without much need or want, and certainly too little money to bother with, I never had much reason to learn anything about banking and finance. Money, as a medium of exchange, is much like a pot of water in Arizona. If you drink it, you have no water. If you do not drink it, it runs away in desert air. To preserve it, you must have an impermeable system and dark, cool place to contain it, and the discipline to remain hot, dirty, and thirsty, until it rains.

This awareness is monofocal, pointing to truth. The truth is, it costs money to hold money, by design. It also means that trading by means of money includes a lot of cuts, or shares, being peeled away. The cuts include taxes and federal fees, title costs, clerical fees, storage, transportation and/or distribution (or strictly as overhead and general banking charges) and so on. At this point, every “change” in the status of your accounts costs something. And this does match reality. So, where do all those fees go? That’s the easy part. The other question is, “Where does the payment of all those fees come from?“

In 1717, Sir Isaac Newton fixed the price of gold in England at 3 pounds, 17 shillings, and 10.5 pence per troy ounce of gold, equivalent to $19.39 in US dollars. That remained the same until the banking shenanigans started in 1916. Gold started wobbling. Wobbling UP, mostly. We went off the gold standard in 1933. We were broke and had bills to pay. Gold climbed around 50% and appeared to stabilize at $30+/troy ounce for a while in the late 50s. Good old Isaac Newton declared its value (with gravity) and it didn’t move much because it was the standard for currency. Since then, the price of gold rose 100X, from $30 to $3,000. Why not? There is no standard.

What you buy can now be compared easily and directly. Gold value is very roughly 1% of current value. (Actually closer to .92%. Give it a month or two.)

With a solid sense of reality, we can simply multiply by one hundred to compare prices between 1916 and now. A dozen eggs in 1916 cost 34 cents. That would be $34 in today’s currency. Chicken was also high, at 23 cents, the same as beef. Both were $23/pound in today’s prices. (The story of chickens and eggs is interesting.) A loaf of bread was 5 to 7 cents. $5.00 to $7.00 in today’s currency.

Annual skilled wages were great! $1,000 to $1,600 meant that carpenters, teachers, draftsmen and teamsters made well over a hundred thousand per year in today’s dollars. The Model T Ford was introduced in 1916 for $360, or $36,000 in converted currency, and standard houses were $3,500 to $4,000, about the same as now, times one hundred.

Here is where the final piece dropped into place. 100 years later, we can look at a couple of lovely steaks and recognize that they really costs about 23 cents apiece, plus $23 in accumulated fees. You work for about two steaks per hour, but the best steak only costs two bits.

“Whatever does this mean, m’dea?”

I haven’t quite figured that out, but you will be the first to know when it comes to me. It can’t be good.