US Dollar: How Inflation Steals the Past and the Future

What is it about money that makes it so popular?

A dollar is both the past and the future. It is the past preserved...like a moth in amber...for as long as the money itself lasts. Let us imagine that you earned $100 on a fine summer day in 1997. If you took those dollars and bought gold - traditionally and naturally a reliable way to store time - that day would still be with you...and still be as valuable as it was then. And now, that day's work you preserved in gold is still available to you...it is now in the future...and it represents things you can buy further in the future still. One hundred dollars worth of gold in 1997 is worth about $250 or $300 today. You can spend it today...or tomorrow...or if you choose, you can carry that day's labours, from 1997, forward with you for as long as you live. And even then, you can pass it on to the next generation. Yes, oh death...don't be so proud. Ha ha...we have you beat!

As we get older we take with us only memories and money (property). If all goes well, when we grow into middle age, the memories grow with us...and the money does too. Then, when we get older, we draw them down...remembering how life was when we were younger...using up the stored wealth from earlier days.

That is what makes money so appealing. It is a way to defeat time and death. Say you work a day in 1975. You get paid $50 for your day's work. If you save $10, that money represents 20% of that day. It is preserved for you...for as long as you can keep it. Put it in a bank. Collect interest. Let the interest compound. And twenty years later, you can still enjoy the fruits of that day's labour.

And that is what is so nasty about inflation. It robs us not only of money...but of the past...and the future. Our lives are emptied out by it...like a liquor store cash register cleaned out by a hold-up man.

A man without money is a man with nothing left of his past...except memories. He has nothing of the past stored up for the future. As a result, he is a prisoner of the present. Everyday, he must see to his needs...providing food and shelter for himself and his family...with no margin for error and no cushion for liberty. He cannot take a day off.
He cannot buy anything more than he can get from current wages. He cannot even get sick without calling on the saved up past of strangers.

All wealth is a legacy of the past and a hope for the future. Monet paintings were done more than 100 years ago. A gallon of gas is the stored up wealth from sunlight that fell on Earth millions of years ago. Versailles was built for a king who died three centuries ago.

Bill Bonner
The Daily Reckoning Australia

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