Interesting chart. The price of oil hasn’t changed much over the years. Why so much anger? From 2001 to 2008 it actually hardly changed at all! Alright, I’m being a bit sneaky. I should have prefaced this post by explaining that it didn’t change much… as long as you were making your purchases with gold! A real currency.
As more credit is introduced to the system the more prices inflate… the essence of inflation. Think about it in terms of leaves. Leaves are nearly worthless. Why? Because they are in abundance and have no real market value. They aren’t scarce. No sound market would ever select leaves as money. Imagine for a moment if the government created a law saying leaves are to be used to pay debt, nothing else. How many leaves would one need to collect to trade for a barrel of oil? Swap a printing press for a backyard filled with trees and I certainly don’t want to count! I would assume hundreds of tons? If it’s possible at all?
Such is the case for US Federal Reserve notes. The more notes that are artificially introduced into the system the less each other note is really worth. Keep in mind they don’t have any value to begin with outside of a State decree (ok, ok $0.11 worth of cotton and linen) I digress though. Your “money” is an illusion! In layman’s terms this is what happened in 1913 under the Federal Reserve’s establishment.
If anyone has any Keynesian friends who are hell bent on defending the “lack of inflation” just hand them a copy of this chart and tell them to suck it. Inflation is real and Keynesianism as well as the central bank of the United States should be considered a threat to your well being.
"When you act as if money grows on trees soon it takes on the valuation of leaves."