December 23rd is the 100th Anniversary of the Federal Reserve. The chart below is a measurement of the value of a 1913 dollar today. As you can see the value has dropped some 95.7%. If the Fed’s dual mandate includes preserving the value of the dollar, it’s not performing its job.
In contrast, according to Oxford Economics, the value of gold has remained remarkably steady over the centuries. “In the 1830s the price of gold in 2010 dollars was around US$450 per troy ounce, with the real terms price much the same in 2005, more than a century and a half later.” So while the value of the dollar is lost, gold retains its value for long periods of time.
Over the 20th century America began decoupling itself from the gold standard, with the Nixon administration putting the final nail in the coffin in 1971. With the dollar decoupled and losing value every year, it’s important to make precious metals like gold a part of your portfolio strategy.