Chile Forum

RWS wrote:I become even more dejected when I look at a hundred-year chart and see how badly the dollar's slipped, ever since 1933 or so. Bring back the five-hundred-dollar house, the nine-dollar suit, and even the outrageously expensive dinner (seven courses, three wines, white-tie at the best restaurant in New York city) at five dollars!

This site is very interesting (and balanced) to see how wealth/value have changed over the years, especially this page: http://www.measuringworth.org/usgdp/. Enter the years 1900 and 2007, and then examine the Real and Nominal GDP numbers (today's dollars and current-year's dollars respectively). I don't mind that the dollar has elasticity (so the Fed can react to changing circumstances), but you'd think it would exhibit one property of elastic: returning to its original shape.

On the other hand, this site raises some thought-provoking issues. How do we define value or purchasing power? Babe Ruth earned a fortune in 1932. Had he banked his money it would have been worth relatively less today. But, he was unable to buy an effective treatment for cancer.

It seems to me like comparing $5 today and a hundred years ago leaves out a lot of important things. If the people 100 years ago had a crystal ball, they'd be bitchen about how our dollar buys a sit-down toilet, and an hour of 24-hours a day.

Mark

admin wrote:That is it. I am sure xe.com is broken. 1 USD = 524.400 CLP

I predict 550 by the end of the year. The Fed is planning to raise rates. It's just a question of whether they wait until after the election.

FWIW: I don't know how I feel about that. Normally, raising rates is a response to inflation due to an overheating economy. Inflation today is due to competition for finite resources. Nothing will change that fact of life. Slowing down the US economy won't. It seems like encouraging growth (innovation) would be a better solution. But, I never understood economics.

Mark