Since We Left the Gold Standard
America’s Wealth Gap Grows…
A new Time magazine story (do they still really publish an actual magazine?) is getting a lot of play. It is a story about the wealth gap, the growing disparity between the rich and uber-rich and everybody else. The headline reads:
“The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90%—And That’s Made the U.S. Less Secure”
Time tells us that extreme income inequality, the upward redistribution of income, has cost American workers “a staggering $50 trillion” over the past several decades. “Half of all full-time workers (those at or below the median income of $50,000 a year) now earn less than half what they would have had incomes across the distribution continued to keep pace with economic growth.”
Time and its sources find that “the median male worker needed 30 weeks of income in 1985 to pay for housing, healthcare, transportation, and education for his family. By 2018, that “Cost of Thriving Index” had increased to 53 weeks (more weeks than in an actual year). But the counterfactual reveals an even starker picture: In 2018, the combined income of married households with two full-time workers was barely more than what the income of a single-earner household would have earned had inequality held constant. Two-income families are now working twice the hours to maintain a shrinking share of the pie, while struggling to pay housing, healthcare, education, childcare, and transportations costs that have grown at two to three times the rate of inflation.”
Of course, Time’s basic story is true, at least the part about the wealth gap. But knowing Time as we do, we expected it to be a thinly disguised call for more socialism and government wealth redistribution. We quickly scanned to the end to see if our expectation was met. It was. But we could have just saved ourselves the trouble by word-searching the article for the word gold.
We eventually did, and of course gold doesn’t show up anywhere. But today’s wealth gap is a product of the abandonment of the gold standard.
Since the Federal Reserve and the dollar was freed from the discipline of gold in 1971, a growing wealth gap has been unavoidable. It is easy enough to understand why. With the Fed serving as the towel boy of Wall Street interests (David Stockman call it “the handmaiden” of Wall Street), its primary objective has been to stovepipe money their way and inflate stock prices – blathering continually about “the wealth effect” all the while. But since stocks are owned primarily by the wealthy, the wealthy get wealthier, while other are left behind.
Pew Research:
“The share of American adults who live in middle-income households has decreased from 61% in 1971 to 51% in 2019. This downsizing has proceeded slowly but surely since 1971, with each decade thereafter typically ending with a smaller share of adults living in middle-income households than at the beginning of the decade.”
Things have gotten worse with the lockdown. A Washington Post story says, “Nearly 8 million Americans have fallen into poverty since the summer.” Although as the following graphic illustrates, the nation’s leading billionaires have done quite well.
This country’s founders, having lived under princes and potentates, created a government and monetary system that could not be corrupted by a king or a central bank to enrich either the nobility or the crony classes at the people’s expense. But over time, the gold and silver monetary system gave way to the Fed and the made-up, unbacked dollar.
Instead of the government and the Constitution protecting your prosperity with a sound money system, it is up to you to protect your own wealth with gold and silver.
The statists and socialists have exploited our growing wealth divide for their own purposes. And they have been successful. They have a lot of open field and running room ahead.
We urge you to speak with a Republic Monetary Exchange precious metals professional and take steps to protect yourself.
Do it today, before it is too late.