Poverty Rate vs Gold price

[karim0028]

Hey Guys,

Saw something on Zerohedge that kind of struck me as odd...

ZH had a chart of the poverty rate from 1950 to today....

Does anyone else notice that the poverty rate went down while we were on the gold standard, then started going up in 1971 (when we ended the gold standard) till 1981 when gold peaked and then essentially stays in a range and explodes up in 2001 (surprisingly when gold bottoms and starts rising)....

Anyone else find this odd or curious? Gold rises due to debasement of the currency, while at the same time the middle class is impoverished due to rising prices... I wonder if this says something in defense of the gold standard...



http://www.zerohedge.com/sites/defau...rty%202009.jpg

[Spartacus]

Re: Poverty Rate vs Gold price

Is the census bureau known to cave to political pressures to massage the numbers? Are the numbers reliable? Could there be more reliable numbers from non government folks who work in the field? I don't know who that would be - Ford Foundation? Rockefeller Foundation?

It's a standard point of the Mises crowd (aka the "Austrian School" of economics) and most hard money advocates. Commodity currency provides resistance against arbitrary central bank or government inflation.

Another talking point is that in the 1800s economic conditions of the normal man improved and the US was completely on a gold standard the entire time.

I don't know the exact reasons why this would happen during a fiat regime - I would suspect the times where the price of Gold is rising are times when people try to get out of paper assets, but people in poverty don't usually own much Gold, do they?

Maybe these times have been historical periods where governments stepped up the volume and intensity of social programs, and Gold is a marker of the mood when this type of thing happens.

[karim0028]

Re: Poverty Rate vs Gold price

Is the census bureau known to cave to political pressures to massage the numbers? Are the numbers reliable? Could there be more reliable numbers from non government folks who work in the field? I don't know who that would be - Ford Foundation? Rockefeller Foundation?

It's a standard point of the Mises crowd (aka the "Austrian School" of economics) and most hard money advocates. Commodity currency provides resistance against arbitrary central bank or government inflation.

Another talking point is that in the 1800s economic conditions of the normal man improved and the US was completely on a gold standard the entire time.

I don't know the exact reasons why this would happen during a fiat regime - I would suspect the times where the price of Gold is rising are times when people try to get out of paper assets, but people in poverty don't usually own much Gold, do they?

Maybe these times have been historical periods where governments stepped up the volume and intensity of social programs, and Gold is a marker of the mood when this type of thing happens.

Well, my take is kind of along the lines of when gold is rising there is inflation going on that is usually being masked by govt, where the average person who doesnt have EJ to do serious analysis on this sort of thing, prices generally rise and leave them poorer even though they were attempting to do the right thing by saving...

So, even though you may be saving in dollars you are just getting poorer... Its kind of insane but in this environment you either move forward or you move back, there is no real ability to stand still in terms of your wealth, when you are attempting to save...