So, I read about the Mountain Meadows Massacre and in the newer book, it mentions that the traveling wagon train probably had around $50,000 of cattle, wagons, and other property in 1857 dollars, or just over $1,000,000 today.  

Yikes!

That is a lot of inflation.  Like around 2000% inflation.  That got me to thinking about whether that is normal or not.

Turns out that it isn’t, at least historically speaking.

I found a nifty inflation calculator online, which is very interesting.   

In the time from 1857 to 1913 (56 years) that $50,000 would have been worth $53,073.90.  That is a pretty flat line for inflation.  So I looked at a  historical point of view, in approximately ten year increments:

1800-1810 about 8% deflation.

1810-1820 about 11% deflation.

1820-1830 about 24% deflation.

1830-1840 about 6.4% deflation.

1840-1850 about 17% deflation.

1850-1860 about 8% inflation.

1860-1870 about 41% inflation.

1870-1880 about 24% deflation.

1880-1890 about 6.9% deflation.

1890-1900 about 7.4% deflation.

1900-1910 about 12% inflation.

1910-1913 about 6.1% inflation.

So in 10 out of 11 decades prior to the founding of the Federal Reserve Bank, there was significant deflation.   The overall rate from 1800 to 1913 was a deflation of 42%.  According to the internet fount of all wisdom and knowledge, deflation increases the value of each dollar while inflation decreses the value of each dollar.  

Part of this is common sense.  The 1800’s saw massive technological advances in steam power, trains, shipping lanes opening up, and with the industrial revolution coming to the United States, common items becames less expensive to produce and therefore to buy.  That is how classical economics should work.  You find a better/cheaper way to build something and the market will respond by buying more of it (even if the price is lower).  That is generally how things worked in the 1800’s.  

Then along came the Federal Reserve Bank.  Part of the promise was to have them level out the economy and to keep inflation under control.   Boy have they ever!  Here is a break down from 1913 to 2007:

1913-1925 about 81% inflation.

1925-1935 about 21.5% deflation.

1935-1945 about 31% inflation.

1945-1955 about 49% inflation.

1955-1965 about 18% inflation.

1965-1975 about 71% inflation.

1975-1985 about 100% inflation.

1985-1995 about 41% inflation.

1995-2005 about 28% inflation.

2005-2007 about 5.4% inflation.

Eight out of nine of the last decades have had inflation instead of deflation.  The comprehensive inflation rate from 1913 to 2007 has been about 1973%.  Is it really any wonder with these kinds of inflation rates that we have so many struggling families to pay their bills and make ends meet?  Dollars simply don’t go as far as they used to.  

Some of the more dramatic increases in inflation have come with massive social and defense spending.  Funny how spending all of that money to help the economy or the poor just makes the problem worse because the dollars they now have are significantly devalued and not worth a whole lot.

The last 90+ years the United States monetary policy has been dictated and controlled by the Federal Reserve.  They are sure doing one heckuva job, if you don’t want your dollars to be worth anything.

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