The United States grew rapidly for 120 years with virtually no inflation. With the creation of the Federal Reserve in 1913, the inflation genie was let out of the bottle. Nixon’s closing of the gold window in 1971 unleashed a tsunami of inflation, covered up by statistical manipulation by the Fed and government.
For those who prefer seeing what real things cost, below is a chart with some key financial items for the average person. If it feels like your family has fallen behind since 1971, you’re right. Your pay has not come close to keeping up with the cost of a new house, a new car or gas to fill up that car. This is why it takes two parents working to just to keep up with inflation.
Items1971
2007
% Increase
Average Cost of new house
$28,000
$314,000
1121%
Median HH Income
$10,300
$58,700
570%
Average Monthly Rent
$150
$730
487%
Cost of a gallon of Gas
$0.40
$2.80
700%
Average New Car Price
$3,430
$28,000
816%
United States postage Stamp
$0.08
$0.41
512%
Movie Ticket
$1.50
$7.00
467%
What has the Fed done for you or, rather, to you? James Quinn has a list.
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