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Fighting Over Dirty Dollars
Everywhere I turn folks are fighting for more dollars. Chicago teachers, Oakland police, city workers, retired workers, world leaders, even the private work force continues to believe a money misconception. Never in our lifetime have we witnessed such local or global conflict over cash when the ironic part is more cash floats in circulation than ever before. Most of us truly believe the answer to our financial problems is to earn more money (currency), not true.
You and I cannot “out earn” what central bankers around the world can create in a monetary blink.
I hope you, too, believe PMs will rise over this decade and have made a commitment to own silver & gold. The reasons both metals will rise are numerous but the situation I write about today must be added to the growing list. I described many reasons why PMs will rise in my book Why Silver & Gold Will Go Higher and I appreciate those of you who made this September our best sales month yet, thank you.
The battle to earn more money is one most participants will lose. The fact is even the winners lose too. The average person doesn’t understand “making” more cash will not solve the financial hardships that now fall upon the world’s middle class. Today’s victims fail to understand too much cash creation only provides temporary help but long term pain. This realization will someday arrive and when it does folks worldwide will realize anger first, then a panicked search for wealth preservation.
Sooner or later we must ask why the need exists to earn more money this year over last. Why do the things we all need for survival cost more? Why is education, health care, groceries and fuel more costly today than not so long ago? If these costs double, again, is the answer higher wages? No way, won’t work – and not one economists will disagree.
But this realization comes slow for most, and a day is soon to arrive when even those oblivious will realize printing more cash decreases the buying power of yesterday’s money. This realization will drive remaining wealth to silver and gold. Why, because silver and gold have the power of floating value?
Loyal readers already know that I like to compare wealth to a more accurate benchmark than dollars, dollars are just too unpredictable. This is why a millionaire in the 1970s was worth multiple times more than a millionaire in 2012. Nevertheless, let’s compare the average wage earner from the 1992 era, in silver, to today’s declining wage earner.
Folks this must be a real eye opener. The average American worker twenty years ago earned around $23k per year. This equaled exactly 5750 silver ounces since silver’s value in 1992 averaged around $4 per ounce. Today, in 2012, the average American worker makes much more considering a yearly average around $50k. At first, this sounds like a reasonable salary increase and more than enough to offset the inflating costs of life’s necessities, right?
Well, not so quick because the average American worker in 2012 is no longer earning 5750 silver ounces per year. Nor do they earn 4000 ounces, or 3000 ounces, or 2000 ounces. The average American worker in 2012 earns around 1470 ounces of silver. Folks, this is why the world is fighting for a pay raise.
Now, let’s say bosses around the country decide an increase in pay is justified. How much of a raise would it take for the wage earner in 2012 to keep par with wages back in 1992, at least in silver terms? Well, you might want to sit down because your new raise must equal $146,000 ADDITIONAL DOLLARS making your total annual income around $196k, not bad.
Let’s all take a deep breath and think about this rationally before you and a group of coworkers dog pile your boss. Your boss can’t increase your wages, at least not in silver terms. The reason they cannot is because the entity you work for suffers from the same currency disease which affects profits, overhead, labor and overall costs of doing business. All compliments of your friendly central banker and politician.
It is only because of a false faith in the USD that folks continue to work for less and less each year. Is this why moms across America had to enter the work force just to make ends meet? Is this why so many couples these days fight over money? My guess is yes, and yes.
I’m sure as you read this post that the masses haven’t connected why they need to earn more. Maybe you haven’t completely wrapped your mind around it either. Mr. Gresham’s law of money (currency) is all we really need to know, especially in odd economic times like today.
Gresham’s Law: The tendency of the inferior of two forms of currency to circulate more freely than, or to the exclusion of, the superior, because of the hoarding of the latter. Source – Dictionary.com.
So what is Mr. Gresham trying to tell us about precious metals? His law of value means folks will save (or hoard) the currency of true value, eventually, when given the choice. This is why folks are soon to flock to silver and gold – simultaneously giving up on a pay raise – as they realize income is only beneficial if the money is real.
My fear is most will not come to such an understanding until all individual wealth is lost. Please make sure your name is not on the loser list.
2012-09-22 01:45:09
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