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Sirwin

From 11,100 Hours of Work in 1970 to Afford a New Home to 51,000 Hours in 2023 – Or How the Current Debt-Based System Enslaves You

By ssaurel | In Bitcoin We Trust | 25 May 2023


While browsing the Web, I just came across this infographic summarizing the cost of several goods and products in 1970 in America:

CDN media  

Cost of Living in 1970:

  • New House - $23,450

  • Average Income - $9,400

  • New Car - $3,450

  • Minimum Wage - $2.10/hour

  • Movie Ticket - $1.55

  • Gasoline - 36 cents/gallon

  • Postage Stamp - 6 cents

  • Sugar - 39 cents/5 lbs

  • Milk - 62 cents/gallon

  • Coffee - $1.90/pound

  • Eggs - 59 cents/dozen

  • Bread - 25 cents

Today, at the current minimum wage, it would take 51,000 hours of work to afford a new home.

In 1970, it would have taken about 11,100 hours.

You might ask: what has happened since 1970 to make things go so wrong for consumers?

The answer is simple: on August 15, 1971, Richard Nixon established a new de facto monetary and financial system by putting an end to the convertibility of the American dollar into gold.

This decision, which was supposed to be temporary, would become definitive. It was definitively ratified on January 7 and 8, 1976 in Kingston, Jamaica. This is called the Jamaica Accords.

The set of agreements made on this occasion put an end to the Bretton Woods monetary system.

The accords allowed the price of gold to float with respect to the U.S. dollar and other currencies, albeit within a set of agreed constraints.

Central bankers would now be able to print as much fiat money out of thin air as they deemed necessary. Taking the example of the Fed, we can say that they were not going to be deprived:

 

From the inception of the Bretton Woods system until 1971, you can see that the US M2 Money Supply remained stable.

Chosen as the pillar of the Bretton Woods system, the US dollar was the only one defined in gold. It was not possible to print fiat money out of thin air for the Fed.

The Bretton Woods system was a standard gold exchange centered around a single currency: the U.S. dollar. All currencies were defined in dollars at the time and only the dollar was defined in gold.

The gold peg, based on 35 U.S. dollars per ounce of gold, assumed that there would be no uncontrolled slippage on the part of the United States and that it would seek to maintain the “real” value of its currency.

In this system, the various national currencies (other than the U.S. dollar) have a fixed exchange rate but this rate can be adjusted if necessary, subject to the agreement of the partners.

In current times, the convertibility of currencies against the dollar is governed by a floor rate and a ceiling rate, which prohibits these currencies from deviating by more than 1% from the initial parity set.

The International Monetary Fund was created at the time of the Bretton Woods agreements. Its purpose is to monitor national policies to ensure that they do not get out of hand and to intervene in the event of an exchange rate crisis to provide liquidity to the country concerned by implementing a recovery policy.

As you can see, the end of Bretton Woods and the unilateral implementation of a new monetary and financial system under pressure from the United States have completely changed the situation.

A little more than 50 years later, we can understand that this system put in place by Nixon is a total failure.

Let's take the example of the dozen eggs since the Fed keeps a chart on the evolution of the eggs price:

 

While you had to pay on average only 59 cents a dozen in 1970, and still “only” 80 cents in 1980, the price of a dozen reached a record price close to 5 dollars at the beginning of the year 2023. This represents an increase of +500% ...

It seems that the chickens of 2023 are different from those of 1970 and that they lay eggs almost made of gold lol.

The fault always lies in the flaws of the current system. A system that is not fixable.

As you read this, some people will think that there is nothing that can be done to improve things. This fatalism was held by all Bitcoiners before they discovered Bitcoin, a decentralized system with superior monetary attributes created by Satoshi Nakamoto in late 2008 and launched in early 2009.

More than 14 years later, Bitcoin is still around. It no longer makes governments and central bankers laugh, as they begin to understand that people are now looking for a more equitable system that gives them back the power over the fruits of their labor.

A system that gives the same opportunities to everyone and not only to the Boomers who took advantage of the Bretton Woods system to get rich and to the first years of the current system before the central banks made even more money since the beginning of the 2000s.

I can't give you any guarantees on the price of Bitcoin, because nobody can. But I can tell you I have the conviction more and more people will come to take advantage of this system because the injustice of the current system is becoming more and more apparent.

More and more people will come to try to protect themselves against the collapse of the current system which seems unstoppable. Sooner or later.

Since Bitcoin has a hard-capped supply of 21 million units no matter what, I'll let you guess what that should mean for its price as demand continues to grow in the future.

Placing the fruits of your labor within this network offers you essential monetary guarantees. With the U.S. dollar's purchasing power falling, you maximize your chances of being able to afford eggs in the future even though their price will continue to rise and your salary will continue to grow too slowly to maintain your current living conditions.

Of course, the choice is yours as always.

You can try to take a fairer alternative path or continue to see your standard of living deteriorate without your hard work making a difference.

The choice is yours.


Why the Very Notion of a Debt Ceiling Makes No Sense in the Current Debt-Based System.

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The current system, that is unfair and not fixable, is that of an infinite increase in debt on pain of a complete collapse of the economy.

Link: https://inbitcoinwetrust.substack.com/p/why-the-very-notion-of-a-debt-ceiling


Don't take for granted the word of Bitcoiners who tell you that Bitcoin is an incredible monetary revolution, but verify it for yourself by developing the knowledge to build your truth about Bitcoin.

 

That's what I suggest you do in the book “The Truth About Bitcoin: Everything you need to build your truth about Bitcoin and stop trusting others without verifying.”

The book is available on various platforms:

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ssaurel
ssaurel Verified Member

Entrepreneur / Developer / Blogger / Author.


In Bitcoin We Trust
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