The Truth About Currency: Why It's Losing Value and What You Can Do About It

Economy Fiscal and Monetary Policy

In this article, we will explore the reasons behind the devaluation of currency and its impact on the economy. We will also discuss the correlation between currency value and the stock market, as well as the importance of distinguishing between money and currency.

The Devaluation of Currency

⏰The price of tomato soup remained stable for over 70 years until 1971.

⏰Despite technological advancements and cost reductions, the price of tomato soup has become 15 times more expensive.

⏰The rarity of tomatoes did not contribute to the price increase.

Currency Value and the Stock Market

⏰When you sell something, you are essentially buying currency.

⏰The dollar's purchasing power has changed over the last 100 years.

⏰From 1898 to 1971, $1 of real money was worth about 10 cans of soup.

FAQ

Why does currency lose value over time?

Currency loses value because it is constantly printed, leading to inflation and decreased purchasing power.

What is the correlation between currency value and the stock market?

Quantitative easing since 2008 has led to a nearly perfect correlation between currency value and stock market value.

How does currency creation affect the economy?

Currency creation leads to selective inflation, causing the stock market to rise and the rich to get richer.

What is the difference between money and currency?

Money holds its value, while currency doesn't. Rulers and authorities always find a way to cheat money.

Why is value more important than price when it comes to money?

Value reflects the true worth of money, whereas price can be manipulated by external factors.

Summary with Timestamps

💰 0:20The graph shows the price of a can of tomato soup from 1898 to 2022, revealing a significant increase in price after 1971 and a dramatic rise after 2020.

💰 3:05The video discusses the concept of buying and selling currency and how the purchasing power of the dollar has changed over the last 100 years.

📉 6:44Fiat currencies constantly lose value and have a 100% failure rate.

📈 9:22Severe inflation from 2000 to 2020 resulted in the rich getting richer and the stock market going up.