I have said that our purchasing power should be 20x what it is. As I ponder this further, I think a more accurate way of putting it is that we should have 20x the money in the bank that we do.
Inflation is like taking taxpayer money and depositing it in an interest bearing account which belongs to someone plugged into the system. That account is jointly owned, in my view, by Wall Street and the Federal Government. Internationally, it is co-owned by international Wall Street equivalents, our Federal Government, and its counterparts, mainly in Europe.
This deposit was made some 100 years ago. Each year, it accrues interest in an amount equal to the inflation rate. My math may be a bit off–since I know from practical experience that markup and Gross Margin are related, but two different calculations–but it is close. Let us say it is 3%.
That is now money which is growing, but which we the people who provided it can’t touch. That is money that would have been used by our grandparents to pay off loans, and invest in real estate. It would have been used by our parents to create a nest egg to pass on to us, their children.
It is hard for many of us to imagine, but there are a not inconsiderable number of people in this world who have millions of dollars in reserve. Most of them live like the rest of us, but when they need money, they have it. Most of us live on the edge. It has not always been thus. Everyone in America should have a large savings account.
Our net worth should be 20x what it is. I think that is a better and more accurate way of putting it, although this remains a work in progress.
I will comment editorially, though, that from what I can tell professional economists likely do a decent job of describing theoretically what IS happening, but a horrible job of describing what COULD have happened, or what SHOULD happen, within a radically different system, based on real money.
As far as I can tell, no one has proposed a truly fixed money supply based on gold. Of course, it may well have happened, and the author laughed out of the academy. It is a radical idea, but our straights are increasingly and unnecessarily dire.