USA - every year, a new currency?

bushi

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Hello fellas

(you have to appreciate catchy topic titles, nah? ;))

It suddenly struck me: every time I read some macro analysis, with long-term trends being looked at, all the charts & figures are given in "current year dollars", be it "in 2011 dollars" or more recently, "in 2012 dollars", or most recently, "in 2013 dollars" :rotflmbo: WTF, apparently, all these "year XXXX dollar" currencies are something different - if there is specific need, to distinguish between them, to get any meaningful analysis?

Of course the reason for that is obvious, and as "inevitable" and "desirable" in modern economy, as the sun rising in the morning, and setting in the evening. Inflation. But just think about it - what it really means - a dollar today, is in fact, something entirely different, than a dollar a year ago - even for the purpose of abstract analysis - if it is to be meaningful. For all intents and purposes, it is like a different currency, with the exchange rate, being always DOWN, versus what you'd have a year, five, ten years ago.

I've never spend so much time to digest it (conditioning goes a long way), but if you stop and look at that from such an angle, it makes it easier to understand, how insidious and treacherous inflation mechanism is. After all, would people put up with something like that: every year on January the 1st, their accounts, salaries, and the value of all their assets denominated in dollars (in fact, put any other fiat currency in this place) were exchanged, by some <1 exchange rate (say 0.98, for 2% inflation rate), for a "New Year Dollars", while being guaranteed, that "New Year Dollar's" purchasing power stays unchanged over many years? For some "greater economic good", and spending stimuli, as Keynesians want to have it?

I do not think so. Yet they put up with inflation (whatever the number is, still greater than zero), and just get along with their lives. But these two mechanism as described above, are precisely the same, as for the outcome.

How bizarre.
 
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pmbug

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... After all, would people put up with something like that: ...
Side note: I'm beginning to understand how the German people let such evil prevail with Hitler. People will put up with tremendous evil as long as they still have something to lose by fighting.

I'm really beginning to lose faith in my fellow countryman. There is a small group of people loosely called the "liberty movement" here in the USA trying to effect political change, but the greater unwashed masses appear to be beyond hope. By the time they get outraged and involved, we're likely going to be past the point of peaceful political change.

I've watched over the last few years how folks who really push the fight for rights, transparency, liberty , etc. get run over by the machine and folks on the sidelines just ridicule them for lack of common sense. I'm talking about folks like Pastor Anderson (brutalized by border patrol agents at a checkstop), the "don't touch my junk" guy who had to shell out $$$ to fight stupid court cases over TSA overreach, etc. Most people appear to have the mindset that folks who assert their rights or make waves deserve whatever punishments the government gives them. So they put up with suspicionless searches, papers please checkpoints, drones, GPS tracking, warrantless wiretapping, etc. It's sad.

And those issues are the kind of "in your face", easy to understand ones. These economic issues are largely beyond comprehension for the unwashed masses that are struggling to make ends meet from paycheck to paycheck. Even when they do understand and roar with a loud voice (overwhelming opposition to TARP) and FedGov ignores them, they soon fade into the ether.

Bottom line is that I am not planning on any great populist political movement to right the ship. I'm afraid that it's going to sink spectacularly.
 

dontdeBasemebro

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Moneybombs, protests, voting, blogs...it won't do a thing. Just do the best you can to prepare yourself for a harder life while trying to maintain a bit of sanity.

I've given up.
 
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