On the Supply Objection to the Gold Standard

Since the gold standard was abandoned in 1971, many people have sought to return to such a standard in order to combat inflation and rein in central banks. Keynesians and others who support fiat currency and central banking present several criticisms of this approach. One of these criticisms is particularly nonsensical, but occurs with increasing frequency: that there is not enough gold in the world to back the quantity of currency in existence, and thus returning to gold would set off a deflationary spiral while destroying several industries that depend on gold. Let us address this question from a scientific standpoint, return to economic matters, and address the claimed effects.

Physical Limits

Let us begin by finding the absolute limit of what gold can do for a monetary system. As the United States dollar is the world reserve currency at the time of this writing, it makes sense to use it as the currency to peg to gold. The smallest unit of gold is the atom, and the smallest unit of dollars is the penny. The most extreme possible case would be to set one penny equal to one atom of gold. What would this look like in practice? Any basic text on chemistry can lead us to the answer. The only stable isotope of gold is Au-197, and its molar mass is 196.967. This means that in about 197 grams of gold, or 6⅓ troy ounce coins of the type minted by many governments and private mints, there will be Avogadro’s constant of atoms, which is 6.022140857×10^23. Setting one penny equal to one atom of gold, this is $6.022×10^21 or $6.022 sextillion easily fitting in one’s hand.

This amount of money is so large that people cannot truly understand it due to the lack of a frame of reference for it. Few people will handle anything beyond millions of dollars at any point in their lives. Large businesses may deal with billions of dollars. The most powerful governments have budgets in the trillions of dollars. According to a History Channel documentary, the dollar value of the entire planet is in the quadrillions of dollars, checking in at $6,873,951,620,979,800, and subtracting Earth’s gold content leaves $6,862,465,304,321,880. As the limit of one penny per atom allows one to hold the current market value of a million Earths in one’s hand, it is clear that science imposes no physical limit to make a gold standard infeasible.

Another useful exercise is to try setting the value of all available gold equal to the value of the rest of the planet. The total available gold content at present amounts to 186,700 metric tons. Defining this amount of gold to be worth the above figure of $6,862,465,304,321,880 gives a gold price of $36,756.64 per gram or $1,143,259.40 per troy ounce. This is very expensive by current standards, but current standards do not come close to economizing the entire planet. The actual price would therefore be far lower than this, but this exercise is useful for setting an upper bound.

Current Prices

Perhaps critics of restoring sound money mean to say that the gold standard could not be reintroduced at current gold prices. In this, they are correct; at the time of this writing, gold trades at $1,284 per troy ounce. Multiplied by the 186,700 metric tons of gold available, this gives $7.707 trillion of gold-backed currency, which is not enough for the United States economy, let alone the entire world. The solution, then, is to devalue fiat currencies to fit the available gold supply. According to the CIA World Factbook, the gross world product in 2015 was $75.73 trillion. Covering this with the available gold gives a gold price of $12,616.75 per troy ounce, which is an order of magnitude above current prices, but not outlandish.

Possible Effects

Gold has gained several practical applications in recent times, particularly in medicine and technology. Critics claim that returning gold to monetary use would devastate these industries, along with the jewelry industry. In each case, critics are overreacting. Research toward creating substitutes which work nearly as well in electronics is promising. Gold salts in medicine have numerous side effects, monitoring requirements, limited efficacy, and very slow onset of action. Finally, there is no particular reason why we should care about an industry that produces impractical novelties to the extent of protecting it through fiat currency. It would be better to free up jewelers to do something more productive and helpful to others.

The other major criticism is that returning to a gold standard will cause a harmful episode of deflation. Paul Krugman writes,

“[W]hen people expect falling prices, they become less willing to spend, and in particular less willing to borrow. After all, when prices are falling, just sitting on cash becomes an investment with a positive real yield – Japanese bank deposits are a really good deal compared with those in America — and anyone considering borrowing, even for a productive investment, has to take account of the fact that the loan will have to repaid in dollars that are worth more than the dollars you borrowed.”

But those who are less willing to spend or borrow are necessarily more willing to save, which will allow them to spend more later or fund new businesses and investments. There is also the matter that one cannot hold out forever; one must eventually purchase goods and services. That the technology industry thrives despite producing the most deflationary goods shows that there is nothing harmful about this. It turns out that the value of using a current computer over the next year is worth more than holding out for a more powerful computer next year. It is also true that holding out for more food next month does not work if one cannot survive until then without food now. One may object that this would concentrate wealth in the hands of those who can hold out, but this is a feature rather than a bug because it redistributes resources to those who have been good stewards of resources.

Those who have already borrowed face a larger debt burden in a deflationary environment, and though creditors experience an equal gain, creditors are unlikely to increase their spending to offset the reduced spending of debtors. But again, this is a feature rather than a bug because it incentivizes saving over borrowing while pushing some debtors into default, thus punishing unwise lenders with loss of principal and unwise borrowers with bad credit ratings.

With falling prices, profits and wages usually have to fall as well. But profits are a function of prices and costs, which are also prices. This leaves profits largely unaffected on a percentage basis. Wages are prices as well, and the need to cut nominal wages in a deflationary environment could both incentivize firms to release their worst employees and provide pushback against minimum wage laws.

Finally, there is the belief that the sort of deflation that may be caused by returning to gold would cause a recession. But the above rebuttals deprive this problem of any mechanism by which it might occur. In fact, the empirical evidence suggests that deflation is linked to economic expansion, as occurred in the United States during the 19th century. The only period in which a correlation between deflation and depression does appear is the Great Depression (1929-34), and this may be linked to the central bank policies of the 1920s, which fraudulently inflated the money supply beyond the set gold exchange rates of the time.

Conclusion

While a free market in money would be the most desirable condition from a libertarian perspective, returning to a gold standard is a superior option to that of allowing fiat currency and central banking to continue as they are. The concerns about a lack of gold supply for returning to a gold standard are without merit, and the fears of deflation and devastation to industry are unfounded.

Book Review: The Invention of Russia

The Invention of Russia is a book about the history of the Soviet Union and the formation of modern Russia by Russian journalist Arkady Ostrovsky. The book focuses on the time period of the rule of Mikhail Gorbachev, Boris Yeltsin, and Vladimir Putin. Special attention is paid to the role played by the media in shaping narratives and steering the population from the Soviet era to the present.

The prologue deals with the author’s experience during and immediately after the assassination of Boris Nemtsov on February 27, 2015. He briefly overviews events over the past few decades that factored into Nemtsov’s murder, and the author’s experiences through those years are also discussed.

The book proper is divided into two parts, each with five chapters. The division between the parts is roughly set at the 1993 Russian constitutional crisis. The first chapter begins with the end of the Soviet Union, then backtracks to give the reader a sense of Soviet history up to Gorbachev’s rise to power, with emphasis on the events that foreshadowed it, such as de-Stalinization and the crushing of the Prague Spring. The second chapter covers the time from Gorbachev’s appointment to the fall of the Berlin Wall. The nature of perestroika and glasnost are discussed, as well as how the Chernobyl incident affected both. Later in the chapter, Ostrovsky details the split between the liberal reformers and the Stalinist hardliners, as well as the beginnings of the privatization of state assets which formed the class of Russian oligarchs. The third chapter explores the final two years of the Soviet Union, including the economic difficulties, the rise of Yeltsin, the worries of the KGB and other elements of the Soviet power structure, the January Events in Lithuania, and the 1991 Soviet coup attempt. The fourth chapter looks at the role played by the media in the dissolution of the Soviet Union and how the generational shift from the shestidesiatniki to their children affected the changes. The Kommersant newspaper is highlighted as an example of the new Russian media, as well as one of several examples of less than honest business practices in the early 1990s, which occurred due to the moral vacuum left by communism. The fifth chapter covers the time from the end of the Soviet Union up to the 1993 crisis, with particular attention to the role of television, radio, and print media in shaping the narrative and saving Russia from another Communist takeover.

The sixth chapter continues the discussion of the 1993 crisis, then moves on to the creation of NTV, Russia’s first Western-style television station. Of course, NTV had to compete with Channel One and other state media, which caused tensions with the state when NTV covered the first Chechnya war from the Chechen point of view. The chapter concludes with the 1996 election, in which the media played an essential role in bringing Yeltsin up from single-digit polling to a victory over Gennady Zyuganov, his Communist challenger. The seventh chapter continues with the events after the election, including a battle between oligarchs that turned into a political crisis, continued troubles with Chechnya, the search for a vision for Russia moving forward, and finally, the 1998 Russian financial crisis.The eighth chapter shows how this milieu combined with NATO airstrikes in Serbia and an overly propagandistic media was able to elevate an obscure KGB agent named Vladimir Putin to the presidency of Russia. The decision of most of NTV’s leadership to side against this was the beginning of the end for the station. The ninth chapter covers the time from the beginning of Putin’s rule to the invasion of Ukraine in 2014, including the ouster of several high-profile opponents of the regime, the bringing of NTV into the control of Gazprom and its gradual turn toward the regime, further trouble with Chechen terrorists, the Russo-Georgian War, and the activities of various media personalities. The tenth chapter looks at Putin’s rule in light of Russian popular culture, the rise of the bureaucrat-entrepreneur, the protests of 2011-13, the military operations in Crimea and eastern Ukraine, and the use of propaganda to manufacture support for foreign aggression.

The book is excellent at face value, providing a perspective that can only come from a native person who lived through many of the events described in the book. But it is even more valuable to libertarians and reactionaries for the obvious parallels between Russian history and the current state of affairs in the West, as well as for the warnings concerning the improper dismantling of government monopolies, as happened during the transition from the Soviet Union to modern Russia.

To conclude, the unique explanations of historical events and the focus on the role of the media in steering the ship of state make this book an invaluable addition to the collection of any activist, analyst, historian, strategist, or student.

Rating: 5/5

Cut Puerto Rico Loose

On May 2, the Puerto Rican government missed an interest payment on bonds it has issued to an extent of $422 million. Worries of default on the territory’s general obligation bonds are continually rising, as it appears that a $2 billion payment due on July 1 will also go unpaid.

Of course, the usual suspects are calling for intervention to “save” the island from its financial woes. Some Democrats are openly clinging to Keynesian ideas of bailouts for troubled financial instruments, despite the abject failure of such measures to repair the mainland U.S. economy since 2008. Meanwhile, House Speaker Paul Ryan has made the statement that “[o]ur primary responsibility is to protect the American taxpayer and to help bring order to the chaos that will befall Puerto Rico if the status quo continues going in the direction it’s going,” which is contradictory because attempting to rescue Puerto Rico will require victimizing not only the American taxpayer, but everyone who holds U.S. dollars.

That such a bailout would be funded by money gained by the state through extortion and currency debasement is terrible enough, but rescuing Puerto Ricans from the just consequences of their actions also creates a moral hazard. If Puerto Rico, then why not Detroit? Chicago? California, even? If $72 billion in debt plus $44 billion in unfunded liabilities for a outlying territory, then why not more for the U.S. mainland? Rewarding and subsidizing bad behavior only encourages more of it, not only from some irresponsible actors, but from all of them.

It must also be noted that in the current political climate, Republicans will be demonized by Democrats and the lapdog media regardless of what happens, and the Republican rank-and-file will be given the shaft. If there is no bailout, then Democrats will accuse Republicans of being too stingy to help people in need, especially ethnic minorities. If there is a bailout and trouble continues, which it will under such circumstances, then Democrats will blame Republicans for not using enough stimulus and/or for allocating the funds poorly. If one will face accusations regardless of one’s actions, then one might as well get one’s money’s worth and do the right thing. And what is the right thing?

Do not only abstain from bailouts; cut Puerto Rico loose.

Let us face facts; Puerto Rico has never really been a part of America, not in terms of economics, culture, language, or identity. In fact, it was not a part of America at all until 1898, when the United States gained control of it from Spain (along with Guam and the Philippines) under the Treaty of Paris, which ended the Spanish-American War. For four centuries prior since being claimed by Columbus in 1493, Puerto Rico had been a Spanish colony. The people there used the Spanish language, but developed their own sense of culture and national identity. (This commonly occurs upon islands, as the ocean makes for a clear barrier between in-group and out-group.) That they may call themselves U.S. citizens is only a matter of law.

The economic well-being of Puerto Rico is not on par with the rest of the United States. If it were an independent nation, it would rank between 60th and 62nd in GDP, with a similar economic output to Angola, Morocco, and Slovakia, none of which are exactly paragons of economic development. If it were a U.S. state, it would rank 37th out of 51. The difference is far more pronounced when considering other measurements. In terms of public debt to GDP, Puerto Rico has a debt of 66 percent of GDP, while no U.S. state exceeds 25 percent. The per capita public debt of Puerto Rico is $19,486.60, which exceeds that of every U.S. state but is lower than that of the District of Columbia. The per capita income in Puerto Rico is $11,241, placing it just above half of the worst U.S. state (Mississippi, $21,036) and far below the best (D.C., $45,877; Connecticut, $39,373).

While cutting Puerto Rico loose is a matter of rational self-interest for mainland Americans, it is also a way to end their victimization at the hands of central bankers and the investors who react to their pernicious policies. While a free market would have much higher interest rates and no currency debasement, central banks like the Federal Reserve have kept interest rates artificially low and have greatly expanded the monetary supply. Savers who are used to getting a reasonable rate of return in a savings account thus have to seek riskier alternatives. Those who have enough capital to access hedge funds, high-risk sovereign debt becomes an attractive option. Those who are poorer either sit on fiat currency as it loses value or venture into precious metals and cryptocurrencies, which can pose even more risk and volatility. While Puerto Rico would likely form a central bank and issue its own fiat currency if it were cut loose, this would keep the Federal Reserve from imposing an economic system which encourages booms that favor foreign investors at the cost of busts that burden Puerto Ricans. A problem of this sort has already been seen in Greece, and the mistakes made by the European Central Bank should not be repeated.

Why Paul Krugman Is Wrong About Social Security And Public Goods

On Apr. 10, economist Paul Krugman wrote an opinion piece called “Where Government Excels” in which he praises some Democrats who are calling for the expansion of Social Security and defends a role of government in the provision of so-called “public goods.” In this rebuttal, I will attempt to show that these ideas are unsound.

Krugman claims that “We …know that some things more or less must be done by government. Every economics textbook talks about ‘public goods’ like national defense and air traffic control that can’t be made available to anyone without being made available to everyone, and which profit-seeking firms, therefore, have no incentive to provide.” First, let us ask how it might be known that some things must be done by government. There is no logical proof that government must provide certain services, as this would require one to show that every possible effort of private enterprise to provide said services must fail. This requires one to not only examine every historical effort, but to predict every conceivable future effort. This is an inexhaustible proof by exhaustion, and therefore cannot be proven.

The specific examples that Krugman gives are national defense, air traffic control, healthcare, and retirement security. To a person who believes in some degree of central planning and has an empirical rather than rational understanding of economics, this may make sense. But let us examine the true nature of these services.

National defense is largely a myth, as nations do not exist apart from the individual people that comprise them. The valid concept is that of individual defense. The purpose of government police and military forces is not the objective protection of the civilian population, but the protection of the rulers from the civilian population, the protection of the statist system should the civilian population overthrow the rulers, and the presentation of a deterrent to rulers of other nations elsewhere in the world who might seek to take over the tax base for themselves. Moreover, individual defense is made impossible by the presence of a government because governments force their subjects to rely upon their armed forces for defense, use said armed forces to destroy any competitors who may wish to offer defense services, and force their subjects to pay taxes to fund said armed forces. All of these activities are incompatible with protecting the citizenry, as true protection from violence must include protection from violence done by the state as well, so objective defense requires anarchy.

As for the provision of military defense in a stateless society, the private sector actually has every incentive to provide it. This is a service which all people want for themselves, and which everyone except for criminals wants for everyone else in the society as well. We know that the demand for this service is very high because people are willing to endure all of the oppressions of statism just to obtain the counterfeit version of it described above. It therefore stands to reason that many people will be willing to meet this demand and be paid for doing so, with competition driving down prices far below what defense budgets of governments currently cost.

Finally, Krugman raises the “free rider” objection, that military defense cannot be provided to anyone if it is not provided to everyone. If true, then the argument must apply to governments as well, which would mean that governments can “free ride” on the military defense provisions of other governments, which fails to explain why all governments field militaries and seek a strong national defense. Secondly, a private defense agency could simply tell any aggressors who would seek to invade an area who is not under their protection. (Although without any gun control laws to stop such people from acquiring military-grade weaponry and lower costs for defensive weapons due to the free market in defense technologies, an aggressive militant group would have a much tougher time attacking the average person than they would now.) Also note that because the “free rider problem” has no solution, it is not really a problem, but a possibly negative fact of life that must be tolerated. It is not certainly negative because money spent on one thing cannot then be spent on another, meaning that eliminating free ridership by making everyone who benefits from a service pay for it will eliminate some other economic activities that were occurring. To ignore this is to commit the broken window fallacy.

The case against air traffic control as a public good is much simpler because the idea that profit-seeking firms have no incentive to ensure the safety of their customers (as well as those on the ground who may be hit by falling aircraft) is sheer lunacy. If the goal of a company is to maximize profits, then civil lawsuits and criminal investigations for wrongful deaths and injuries that occur as a result of a lack of safety precautions that reasonable people would expect to be in place will certainly be detrimental to that goal. The losses would be exacerbated by customers fleeing from less safe airlines to more safe airlines.

Next, Krugman claims that government is better than the market at providing health insurance and that while conservatives agitate for privatization, this will make healthcare less efficient and more expensive. What conservatives agitate for is not true privatization, as this would mean an end to government involvement. Instead, they seek a sort of fascism where healthcare industry leaders and government officials work together to set policies that protect each other at the expense of smaller competing companies and the average person. This fake privatization would move us in the wrong direction, as it would magnify the worst of both worlds by capitalizing risks and socializing losses as well as combining the efficiency of the market with the evil of the state. But real privatization is quite different. Striking down barriers to entry, such as the restriction on buying health insurance across state lines as well as individual and corporate licensing requirements, would give consumers more choices and thereby force companies to either provide better insurance policies or be outcompeted.

Last, Krugman makes a case for Social Security. He argues that it is necessary because people are not rational actors and therefore cannot be trusted to save and invest based on a realistic assessment of what they will need in retirement and an intelligent understanding of risk and return. But what comprises the state? Is it run by a super-intelligent race of aliens who can centrally plan everyone’s lives? Of course not. Those who wield state power are people as well, subject to the same shortcomings as everyone else. He then says that people are losing billions of dollars because investment advisors are looking out for themselves first and their customers second, but if this is a surprise to anyone who uses their services, then they are paying the price for failing to observe caveat emptor.

Some will say, and Krugman does, that people should not be at fault for saving too little and making poor investment decisions. But the essence of liberty is the freedom to take one’s own risks, reap one’s own rewards, and suffer one’s own consequences without external molestation. While Krugman is correct to say that the economy “should not be an obstacle course only a few can navigate” and “is supposed to work for real people leading real lives,” the obstacle courses that few can navigate are arranged with state power on behalf of those who can buy political favor, and this prevents the economy from working for the average person.

Social Security is not the shining example of a working system that Krugman says it is. Since its inception, it has been worse than a Ponzi scheme, as Ponzi schemes at least spare the unborn and only take money from those who willingly enter them. Since the Reagan administration, the trust fund for Social Security has routinely been looted by politicians to fund their pet projects without raising the budget deficit as much as it would otherwise be raised. This sleight of hand would not be possible if people were allowed to completely manage their own retirement funds. While Krugman claims that expanding Social Security is necessary because of the replacement of private pensions with 401(k) plans, the reality is that pension plans for life are both economically unsustainable and logically indefensible, as they amount to paying people for not producing something of value just because they once did produce something of value.

Ultimately, there is no such thing as a right to a retirement. Until relatively recently, a period of relative relaxation and unproductivity between an arbitrary age and death was unheard of unless a person had earned the means to engage in such. Those who did not earn such means either had to continue working or be cared for by other family members. With government interference, the responsibility of a particular children paying for particular parents as well as full responsibility for one’s own financial affairs were erased, thereby creating moral hazards that have led to malinvestments. Krugman asks why we should not make Social Security bigger. The short answer is that malinvestments ultimately cause recessions, and the entitlement bubble is a potential killer of the economy as we know it. The impact of the collapse of this unsustainable system will be large enough without efforts to make it even larger.

The Federal Reserve Turns 100: A Timeline Of Economic Mismanagement

On Dec. 23, 1913, Congress passed the Federal Reserve Act, which created a central banking system in the United States, of which all nationally chartered banks were forced to become members. (State banks had a choice, but nonmember banks had to keep deposit accounts with member banks, and so were under control of the Federal Reserve as well.) The Federal Reserve Note, the current legal tender, was also created at this time. It has now been a full century since this institution was created, so let us reflect upon its various (mis)deeds. This a timeline of some of the major events involving the Federal Reserve over the past century:

1913: The Federal Reserve is created.

1914: Benjamin Strong becomes the first Governor of the Federal Reserve Bank of New York, which was the most powerful position in the Federal Reserve until the Banking Acts of 1933 and 1935. Charles S. Hamlin becomes the first Chairman of the Federal Reserve.

1916: Prices have increased over 10 percent since 1913. William P. G. Harding becomes Chairman of the Federal Reserve.

1918: World War I drives prices higher. Prices have increased over 50 percent since 1913.

c. 1919: The money supply has doubled since 1913. This is an inflation rate of 100 percent in a six-year period by the correct definition of inflation.

1920: Prices have doubled since 1913. This is an inflation rate of 100 percent in a seven-year period by the commonly used (but incorrect) definition of inflation. This, along with the realignment to a peacetime economy following World War I, helps to cause the Depression of 1920-21.

1921: Following the Depression of 1920-21, the Fed continues inflationary policies to pay off war debts and help the Bank of England maintain a phony gold standard. This consequences of this were partly to blame for the Great Depression.

1922: Prices fall, but have still increased 70 percent since 1913. Prices remain near this level for the rest of the decade. Daniel Crissinger becomes Chairman of the Federal Reserve.

1927: Roy A. Young becomes Chairman of the Federal Reserve.

1928: Benjamin Strong dies in office. George L. Harrison becomes President of the Federal Reserve Bank of New York.

c. 1929: The money supply has tripled since 1913.

1930: Eugene Meyer becomes Chairman of the Federal Reserve.

1930-33: Prices fall again, and continue falling until reaching a low of 31 percent above 1913 levels in 1933. Prices remain near this level for the rest of the decade.

1933: Eugene R. Black becomes Chairman of the Federal Reserve. President Franklin Roosevelt orders that gold owned by American citizens be confiscated and replaced with Federal Reserve Notes.

1933-35: The Banking Acts create the Federal Deposit Insurance Commission, insuring individual deposits and thereby creating a moral hazard for banks, which no longer needed to be as careful with their assets.

1934: Marriner S. Eccles becomes Chairman of the Federal Reserve.

1938: The Federal Reserve panics at the potential for inflation, and doubles the minimum reserve requirements. This sends the economy into a tailspin of credit liquidation.

c. 1941: The money supply has quadrupled since 1913.

1941-45: World War II drives prices higher, from 41.4 percent above 1913 levels in 1941 to 81.8 percent above 1913 levels in 1945.

c. 1943: The money supply has quintupled since 1913.

1947: Prices are again more than double those of 1913.

1948: Thomas B. McCabe becomes Chairman of the Federal Reserve.

1951: William McChesney Martin becomes Chairman of the Federal Reserve.

c. 1952: The money supply has increased ten-fold since 1913.

1960: The money supply has increased twenty-fold since 1913.

1961: Prices have tripled since 1913.

1966: The money supply has increased thirty-fold since 1913.

1970: Arthur F. Burns becomes Chairman of the Federal Reserve. The money supply has increased forty-fold since 1913.

1971: Prices have quadrupled since 1913. President Nixon ends the Bretton Woods system, closing the gold window. From this point onward, the Federal Reserve is able to create currency at a much greater pace, leading to much faster inflation and price increases.

1972: The money supply has increased fifty-fold since 1913.

1975: Prices have quintupled since 1913.

1978: G. William Miller becomes Chairman of the Federal Reserve.

1979: Paul Volcker becomes Chairman of the Federal Reserve.

1980: The Depository Institutions Deregulation and Monetary Control Act gives the Federal Reserve more control over non-member banks. The money supply has increased one hundred-fold since 1913.

1983: Prices have increased ten-fold since 1913.

1987: Alan Greenspan becomes Chairman of the Federal Reserve.

1990: The money supply has increased two hundred-fold since 1913.

1995: Prices have increased fifteen-fold since 1913.

2000: The money supply has increased three hundred-fold since 1913.

2004: The Federal Reserve lowers its interest rate target, leading to malinvestments in housing that create a bubble. The money supply has increased four hundred-fold since 1913.

2006: Ben Bernanke becomes Chairman of the Federal Reserve. Prices have increased twenty-fold since 1913. The housing bubble peaks.

2008: The money supply has increased five hundred-fold since 1913. The housing bubble bursts. The Federal Reserve begins quantitative easing in an attempt to mitigate the financial crisis of 2007-08.

2009-2011: Bloomberg L.P. sues the Board of Governors of the Federal Reserve System for disclosure of information about banks and other financial institutions that had borrowed from the Federal Reserve discount window during the United States housing bubble and ensuing financial crisis. The Fed was forced to release the information, which showed that the Fed had made as much as $1.2 trillion available to banks and other companies in the form of emergency loans between 2007 and 2010.

2013: Over the past century, the US dollar has lost 95.6 percent of its purchasing power. On average, an item that cost $100 in 1913 costs $2,354.23 at present. Also, while there were approximately $16 billion in circulation in 1913, this has expanded to $10.9718 trillion, an increase of over 68,000 percent.