Wednesday, October 20, 2010

Requiem for the buck

I ordered a pair of ski poles yesterday, and when I clicked on the Confirm button, it occurred to me that the price ($129) was more than what I paid for my first pair of metal skis, which I bought second hand at a ski shop in Littleton NH. That was of course before the Great Inflation of the 1970s, which turned our dollars into dimes. Lyndon Johnson wanted a Great Society plus a war, and the only way to pay for that was to print greenbacks. "It's our currency, but it's your problem," his Treasury secretary John Connally said to the Europeans when we exported our inflation to them. (By that time, Mr. Connally was Richard Nixon's Treasury secretary: inflation takes a while to work through the system.) Now I habitually move the decimal one place to the left when pricing things. Gasoline at $2.74? Not bad! That's actually cheaper than the 29.9 cents I paid to put a gallon in my Volkswagen Beetle.

Now we have another president whose ambitions are higher than the nation's ability (or anyhow willingness) to pay for them. The solution of course will be to flood the world with greenbacks. The gold bugs have already bid the price of their pretty metal up to $1300 an ounce; it was $35 when Mr. Nixon closed the door to Fort Knox and unhinged the dollar from reality. Can $3,500 be far off? Then I'll be moving the decimal point two places left. Gasoline at $28 a gallon is the legacy we'll leave to our children. Blue skies! -- Dan Ford
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