We had the great pleasure of attending the Real Estate Guys Summit on Sand last week, held in the fabulous Mahogany Bay Village in San Pedro. The conference featured an impressive list of faculty members, including Robert Kiyosaki, Kim Kiyosaki, George Gammon, G. Edward Griffin, Ken McElroy and many others. Each and every faculty member and attendee added their own bit of insight, making the experience truly unforgettable.
Tucked within the grandeur and bravado, a simple illustration resonated deeply and will stay with us for a lifetime. It was brought forth by a kind gentlemen named Dana Samuelson of amergold.com. The story goes like this:
In 1964, a quarter bought you roughly one gallon of gas. Today, that same quarter still buys you a gallon of gas.
To help us visualize this, Mr. Samuelson generously gave every person in the room (around 240 people!) two quarters in a sleeve. One of recent vintage, and one of 1964, 90 percent silver vintage.
You see, the United States government is still representing these units of currency as having the same value: 25 cents. The free market tells a different story, one of great debasement of purchasing power over time.
When money was truly money--that is, having intrinsic value--it retained value in a relatively stable manner over time. This becomes a problem for a government, as it does not allow their insatiable appetite for consumption to be fed.
This is a simple and brilliant illustration to share with your children. It struck me, however, that the government is continually gaining proficiency in their seigniorage. After all, it is their great ambition to reduce the purchasing power of currency over time.
Check back in tomorrow, when we'll briefly illustrate how the government increases their ability to rob you blind.