Guest Post by Nick Giambruno
In 1999, ABC launched Who Wants to Be a Millionaire? with Regis Philbin.
The show became a national obsession.
Its premise rested on an assumption that needed no explanation: If you won $1 million, you had made it.
Later that year, a contestant reached the final question with one lifeline left.
He used it to call his father.
But he did not need help.
He called to tell his father that he was about to win $1 million.
The call became an instant television moment because America watched an ordinary man cross what felt like the finish line of personal finance.
A million dollars meant freedom.
It meant a house, a secure retirement, and escape velocity from the financial concerns of ordinary life.
In 1999, the “millionaire” label meant something.
However, a generation of currency debasement has hollowed it out since then.
A million dollars is still a lot of money today. It can provide security, flexibility, and a strong foundation. But it no longer represents a clear dividing line between the wealthy and everyone else.
According to official Consumer Price Index (CPI) data, $1 million today has roughly the purchasing power of $497,000 in 1999 dollars.
However, this understates the problem in a big way.
It is important to remember that the CPI is the most politically manipulated statistic in all of government. That is saying something because many government statistics are completely manipulated, but inflation, as measured by the CPI, is perhaps the most manipulated.
The CPI is a basket of prices trying to measure the average price changes for 340 million Americans.
It’s an impossible task because every individual has a different price basket. Consider someone who lives in New York City compared to someone who lives in rural Montana. They have totally different price baskets.
Using the CPI as a measure of price increases for 340 million people is even more preposterous than taking the average temperature across 50 states in the US as a meaningful statistic to determine what clothes you should wear today.
Further, the government gets to cherry-pick what items go in the CPI basket and their weightings. It’s like letting a student grade his own paper.
In short, the CPI is rigged. It is nothing more than misleading government propaganda intended to conceal the government’s atrocious currency debasement.
If measuring currency debasement in CPI is a dishonest measuring stick — and it is — then how do we accurately measure it?
The best option is to measure it in honest money—gold.
Before the adoption of a fiat currency standard, gold had been mankind’s most enduring form of money—for over 5,000 years—because of unique characteristics that made it best suited to store and exchange value.
Gold is durable, divisible, consistent, convenient, scarce, and most importantly, the “hardest” of all physical commodities.
In other words, gold is the one physical commodity that is the “hardest to produce” (relative to existing stockpiles) and, therefore, the most resistant to debasement.
Gold is indestructible, and its stockpiles have built up over thousands of years. That’s a big reason why the growth of new gold supply—typically 1-2% per year—is insignificant.
In other words, nobody can arbitrarily inflate the supply.
That makes gold an excellent store of value and gives the yellow metal its superior monetary properties.
People in every country of the world value gold. Its worth doesn’t depend on any government or any counterparty at all. Gold has always been an inherently international and politically neutral asset. This is why different civilizations around the world have used gold as money for millennia.
When it comes to measuring currency debasement, gold is the mirror of truth.
And when we view the situation through a gold lens, that truth becomes impossible to miss. Gold reveals one of the most important financial trends of our lifetimes.
In 1999, the median American household earned $40,816. At that year’s average gold price of about $279, a full year’s income represented about 146 ounces of gold.
The latest reported median household income stands at $87,460. At a gold price of about $4,200, it buys about 21 ounces.
The paycheck more than doubled in nominal dollar terms. Yet its purchasing power in gold collapsed by about 86%—a staggering decline.
That, in short, is why ABC couldn’t run Who Wants to Be a Millionaire? today.
The show’s title would slap viewers with an uncomfortable reminder: A million dollars no longer means what it once did. Some might begin to wonder why. That question would create problems for the politically connected insiders who benefit most from this rotten system.
In any case, this monetary system governs our financial lives. You need to recognize it, understand it, and take action to protect yourself.
The main lesson is simple: You can’t outrun the money printer by working harder. Your wages will not keep pace with currency debasement. They won’t come close.
The ugly truth is that this dynamic will accelerate and drive down living standards for millions of people.
To keep pace with currency debasement—and outpace it—you need to own the right kinds of assets.
Currency debasement transfers wealth from people who work for dollars to those who own the right assets.
One asset stands out as the fastest horse in the race to outpace the money printer.
I explain what it is—and why I favor it—in my free special report, The Most Dangerous Economic Crisis in 100 Years… the Top 3 Strategies You Need Right Now.
To get your free copy, click here.
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[ H/T The Burning Platform ]
In 1999, ABC launched Who Wants to Be a Millionaire? with Regis Philbin.
The show became a national obsession.
Its premise rested on an assumption that needed no explanation: If you won $1 million, you had made it.
Later that year, a contestant reached the final question with one lifeline left.
He used it to call his father.
But he did not need help.
He called to tell his father that he was about to win $1 million.
The call became an instant television moment because America watched an ordinary man cross what felt like the finish line of personal finance.
A million dollars meant freedom.
It meant a house, a secure retirement, and escape velocity from the financial concerns of ordinary life.
In 1999, the “millionaire” label meant something.
However, a generation of currency debasement has hollowed it out since then.
A million dollars is still a lot of money today. It can provide security, flexibility, and a strong foundation. But it no longer represents a clear dividing line between the wealthy and everyone else.
According to official Consumer Price Index (CPI) data, $1 million today has roughly the purchasing power of $497,000 in 1999 dollars.
However, this understates the problem in a big way.
It is important to remember that the CPI is the most politically manipulated statistic in all of government. That is saying something because many government statistics are completely manipulated, but inflation, as measured by the CPI, is perhaps the most manipulated.
The CPI is a basket of prices trying to measure the average price changes for 340 million Americans.
It’s an impossible task because every individual has a different price basket. Consider someone who lives in New York City compared to someone who lives in rural Montana. They have totally different price baskets.
Using the CPI as a measure of price increases for 340 million people is even more preposterous than taking the average temperature across 50 states in the US as a meaningful statistic to determine what clothes you should wear today.
Further, the government gets to cherry-pick what items go in the CPI basket and their weightings. It’s like letting a student grade his own paper.
In short, the CPI is rigged. It is nothing more than misleading government propaganda intended to conceal the government’s atrocious currency debasement.
If measuring currency debasement in CPI is a dishonest measuring stick — and it is — then how do we accurately measure it?
The best option is to measure it in honest money—gold.
Before the adoption of a fiat currency standard, gold had been mankind’s most enduring form of money—for over 5,000 years—because of unique characteristics that made it best suited to store and exchange value.
Gold is durable, divisible, consistent, convenient, scarce, and most importantly, the “hardest” of all physical commodities.
In other words, gold is the one physical commodity that is the “hardest to produce” (relative to existing stockpiles) and, therefore, the most resistant to debasement.
Gold is indestructible, and its stockpiles have built up over thousands of years. That’s a big reason why the growth of new gold supply—typically 1-2% per year—is insignificant.
In other words, nobody can arbitrarily inflate the supply.
That makes gold an excellent store of value and gives the yellow metal its superior monetary properties.
People in every country of the world value gold. Its worth doesn’t depend on any government or any counterparty at all. Gold has always been an inherently international and politically neutral asset. This is why different civilizations around the world have used gold as money for millennia.
When it comes to measuring currency debasement, gold is the mirror of truth.
And when we view the situation through a gold lens, that truth becomes impossible to miss. Gold reveals one of the most important financial trends of our lifetimes.
In 1999, the median American household earned $40,816. At that year’s average gold price of about $279, a full year’s income represented about 146 ounces of gold.
The latest reported median household income stands at $87,460. At a gold price of about $4,200, it buys about 21 ounces.
The paycheck more than doubled in nominal dollar terms. Yet its purchasing power in gold collapsed by about 86%—a staggering decline.
That, in short, is why ABC couldn’t run Who Wants to Be a Millionaire? today.
The show’s title would slap viewers with an uncomfortable reminder: A million dollars no longer means what it once did. Some might begin to wonder why. That question would create problems for the politically connected insiders who benefit most from this rotten system.
In any case, this monetary system governs our financial lives. You need to recognize it, understand it, and take action to protect yourself.
The main lesson is simple: You can’t outrun the money printer by working harder. Your wages will not keep pace with currency debasement. They won’t come close.
The ugly truth is that this dynamic will accelerate and drive down living standards for millions of people.
To keep pace with currency debasement—and outpace it—you need to own the right kinds of assets.
Currency debasement transfers wealth from people who work for dollars to those who own the right assets.
One asset stands out as the fastest horse in the race to outpace the money printer.
I explain what it is—and why I favor it—in my free special report, The Most Dangerous Economic Crisis in 100 Years… the Top 3 Strategies You Need Right Now.
To get your free copy, click here.
Tweet
Continue reading...
[ H/T The Burning Platform ]
