You didn’t understand my reply.
There is no loss of confidence in the US Dollar, that is measured by the US Dollar index… the relative value of the US Dollar as measured against a basket of all other world currencies.
I didn’t say there is no inflation is US Dollar terms, or Yen terms, or Euro terms. Clearly there is, and it’s a feature, not a bug, of fractional reserve banking.
I don’t see how you can claim inflation is a “feature, not a bug.” How is consumer price inflation good in any way, shape, or form?
It is not clear what you mean when you say "the US dollar index is down 4.83%. I understand consumer price inflation, not “dollar index.”
A feature of debt-based fiat money is the easiness of debasing the currency- just create more government debt, which is easy to do.
Fractional reserve banking is a separate issue. Of course, you can point out that the Fed lends by fractional reserve.
I noticed the same comparison on a different chart. Gold really never has been a good investment for long term. I will never buy any.
If the purchasing power of the US dollar was a static and never-changing the people who provide the goods and services we buy would have little incentive to ever improve or increase their product. New ideas, products, methods and quality of life would slowly diminish and our capitalist-powered democratic republic would fail.
Name one successful capitalist-based national economy with a sustained record of zero currency inflation.
Just before Jan 2000 I bought some gold at $280/oz and today it’s worth $2,390/oz.
Gold is like the OG Bitcoin. Wild price swings. Long periods of forgetaboutit. Very tough asset to hold. I’m glad I bought in the $1200s but lots of people have gotten burned by it
You might also consider loading up on a case or two of Pepto Bismol, in your “Yogurt Hits The Ventilator” scenario, given what people will probably be eating, it will be a popular bartering item.
Places I transact with: Kroger, HEB, Costco, WalMart, Kohl’s, Macy’s, Centerpoint Energy, Shell Energy, InfraMark, EFL, Allstate, local taxing authorites, IRS, Schwab, Fidelity, Ally, Amex, Citi, CapitalOne
The number of firms from above that will transact via barter: 0
My gold dealer accepts US fiat Dollars in exchange for gold. I cannot bring the gold dealer chickens, bullets, food, medicine. He wants US Dollars.
Gold is a “near-line store of value”. It is no longer a medium of exchange, except maybe if someone find out you have it, they might point a gun at you and they you’ll exchange it for your life.
But for nation-states or large organizations, it can be a medium of exchange. They can trade, keep a ledger of trades (blockchain?), and the party with the trade deficit settles up once a quarter or once a year in gold. India buys crude from Saudi, they could pay in gold. Sure.
For individuals? On a daily basis? Never going to happen.
Preppers and the Y2K disaster scenarios recommend coffee, tobacco, and booze as the best bartering items.
This is one of the silliest quotes on economics I have ever read on this forum.
Name one country that is disciplined enough to balance its budget. The fact that governments print money and/or create credit to pay their deficits, and thus create inflation as a byproduct, does not mean inflation is virtuous. It just means irresponsible spending is near universal.
Price DEFLATION is the norm with stable currencies. It was the way our standard of living was improved from 1870 to the beginning of World War I. Production efficiencies drove down the cost of consumer items and workers’ wages actually bought more. Price inflation was an alien concept back then, not the norm it has become today with fiat currency and profligate spending.
Stable currency and zero price inflation would not diminish technological advancement one bit. If an entrepreneur thought up a new good or service that would be popular, he would bring it to market, because people would buy it and he would become rich. The automibile was brought to market in an era of stable prices in the US.
Thanks to World War I, a large segment of production in Europe was taken out. Supply decreased and prices soared, because the US could not pick up the slack fast enough. It did not help that our FED began buying federal debt issues which it was prohibited from doing at the founding of the FED.
Following the WW1 price inflation came the inevitable bust in 1921 which few people even know about. That depression was just as severe as the Great Depression, but did not last as long, because Harding was not a meddler like Hoover and Roosevelt, who worsened their downturn.
We are so used to the evil of currency debasement and price inflation that we think it was normal. You even think it is virtuous!!!
Along with the Spanish flu.
" The United States lost 675,000 people to the Spanish flu in 1918-more casualties than World War I, World War II, the Korean War and the Vietnam War combined."
And yet people did not run around hysterically and demand personal liberties be drastically curtailed like they did under COVID 19.
But think about this- If we had not lost those people, there would have been even more demand pressure and a higher inflation rate, and the Depression of 1921 might have been even worse!
I was only making the point that WW1 did not cause at many deaths as the Spanish Flu.
“The influenza epidemic that swept the world in 1918 killed an estimated 50 million people.”
Yep, it is spectacular the numbers that died of the flu. Soldiers in the trenches contracted it. Then when the war was over they went home and spread it quickly all over the world.
Amazing to me how virus particles that cannot be properly called living animals can so easily kill so many advanced organisms like Homo sapiens.
Oh no, it was the same back then too. People seemingly don’t change, even though our scientific understanding of these pathogens is just light years ahead of 1918.
Don’t remember us having the chance to vote on mandatory masking.
Were church services shut down back then by the government as well? I doubt it.
Yes there were hysterical people back then. The difference is government did not have the power back then that it wields now.
I take that back. The problem was mounting surpluses after the war that turned into severe deflation. Were the people that died from the virus still living, the surpluses would have been less, and the depression not as severe. The deaths caused the oversupply problem to be worse than it would have been.
Interesting theory… 
The problem with it is that automobile sales didn’t take off until after 1917. During the glorious days of zero inflation there were hundreds of car manufacturers but sales, along with the dollar’s inflation stagnated. After 1917 car sales pretty much tracked with inflation.
Your numbers are just plain wrong.
Here are the facts from census.gov: " In 1900, the Census Bureau reported that manufacturers produced 5,000 motor vehicles and there were 8,000 registered vehicles in the United States. In 1908, the year Henry Ford began producing the Model T, manufacturers produced 65,000 motor vehicles and There were 197,500 registered motor vehicles on American roads."
So… in the glorious days of deflation, from the beginning of the US car market, through 1899 the total number of cars sold was all of 3,000. Then, from 1900 through 1908 there were an additional 197,200 added to our roads. So, what was the rate of inflation during those periods?
Guess what? During the period of 1893, the start of the US car market, until 1900 the dollar had an average deflation rate of -1.34% per year, producing a cumulative price change of -7.78%. But during the time the car market took off, from 1900 until Henry Ford introduced the Model T, the dollar had an average inflation rate of 1.14% per year between 1900 and 1908, producing a cumulative price increase of 9.52%.
So much for the inflation is bad for the economy theory.
So people dying in pandemics is a good thing?.. 