ANSWERS: 7
  • Inflation due to supply and demand. For example, some huge music star comes out with a clothing line. A shirt that costs the company $10 dollars in materials and labor per shirt is priced retail $150 and people actually buy it because of the name of a famous person is tied to it. The reality of it is, that shirt is not worth the money paid for it but people buy it any way making the dollar depreciate in value. A simple way of looking at it is, people spend spend spend, making money overly fluid and essentially common. If our economy was more fiscal, the price of things would drop because basically we are forcing the companies to lower prices or no one will buy the item.
  • It doesn't.
  • A value of a dollar is defined in The Coinage Act of 1792 which defined the dollar as 371.25 grains of pure silver, putting the United States of America on the Silver Standard, which the country is still on. A silver Eagle has been and always will be a unit of fixed value. Now a Dollar Bill, which it seem you are asking about, is a promise to pay a Silver Eagle (with no legal requirement to provide one if so demanded). The only thing backing a Dollar Bill is the faith and confidence of the people of this country in our government and each other to deliver value in exchange for said bill. Since there is only a fixed amount of value creation, prices for that value produced goes up when the Federal Reserve fulfills its mandate to inflate the money supply by printing more dollar bills. This is called inflation. It's true that inflation is every where and always a monetary phenomenon.
    • Thinker
      The Federal Reserve Corp. is owned by the Rothschild family. In fact they control all but three currencies in the world. The coinage act may have defined the value of the dollar but it is no longer in effect as the U.S. government no longer owns but borrows from the Federal Reserve Corp. It is going to get much worse in this new year.
  • It is a classic economics 101 problem. The value of the dollar has trended downward over the past few years simply because there are more "sellers" of dollars on the global foreign exchange market than "buyers" of dollars. When more people are selling the dollar than are buying it relative to another currency (e.g. the Japanes Yet or the Euro) the strength of the dollar relative to those currencies will fall/get weaker. The question then becomes "why are more people selling dollars than buying dollars?" The simple answer to this question is that investors see more attractive investment opportunities to invest their money elsewhere. If you are going to buy real estate in Europe or Japanese stocks, you cannot use US dollars to do these things. You'd first need to take your US dollars and convert them into Japanese Yen or Euros before you can execute your trasaction. If you do this, then you become one of the many "sellers" of dollars on the global foreign exchange market. Money is liquid and can easily shift from one locale to another. For example, over the past few weeks the dollar has strengthened. Why did this happen? Because, historically, the US is perceived by investors all over the world to be a "safe place" for their money. When times get uncertain and investing in Chinese stocks or Middle Eastern real estate becomes more risky, people will sell their assets in those locales and convert back into dollars. When that happens you are selling those currencies and buying the dollar. The flip side of the economics 101 scenario is when there are more "buyers" of dollars than "sellers," the dollar will get strong, which is what has happened over the past few weeks.
  • what is the purchasing power of a dollar in 1935 compared to today
  • You print more dollars, you decrease its value. Thanks Federal Reserve. The US Treasury with congress authorization needs to take back responsibility that it granted to the "Private" Federal Reserve Bank.
  • probably inflation

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