Ring of truth

Article Highlights

  • A quarter today is worth approximately three cents in 1964 purchasing power.

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  • Because the consumer price index has increased 7.5 times since mid-1946, a $10,000 salary then would now take $75,000 to match.

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  • The Federal Reserve and all the other central banks have in these days declared their absolute commitment to perpetual inflation.

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To the Editor:

As Randall W. Frosyth said in “One Born Every Minute” (Up & Down Wall Street, July 8), “The quarter, which was made of silver until 1964, used to be worth something. Not so much these days.” Yes, quarters used to ring if you dropped them on a table, but now they go clunk, and a quarter today is worth approximately three cents in 1964 purchasing power. Put the other way round, to equal an old ringing quarter now takes $1.88. And because the consumer price index has increased 7.5 times since mid-1946, a $10,000 salary then would now take $75,000 to match.

The Federal Reserve and all the other central banks have in these days declared their absolute commitment to perpetual inflation. That this is the best policy is far from proved. To have trusting faith in central banks requires that you be among those people about whom P.T. Barnum allegedly observed that these is one born every minute.

Alex J. Pollock
Resident Fellow
American Enterprise Institute
Washington, D.C.

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About the Author

 

Alex J.
Pollock
  • Alex J. Pollock is a resident fellow at the American Enterprise Institute (AEI), where he studies and writes about housing finance; government-sponsored enterprises, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; retirement finance; and banking and central banks. He also works on corporate governance and accounting standards issues.


    Pollock has had a 35-year career in banking and was president and CEO of the Federal Home Loan Bank of Chicago for more than 12 years immediately before joining AEI. A prolific writer, he has written numerous articles on financial systems and is the author of the book “Boom and Bust: Financial Cycles and Human Prosperity” (AEI Press, 2011). He has also created a one-page mortgage form to help borrowers understand their mortgage obligations.


    The lead director of CME Group, Pollock is also a director of the Great Lakes Higher Education Corporation and the chairman of the board of the Great Books Foundation. He is a past president of the International Union for Housing Finance.


    He has an M.P.A. in international relations from Princeton University, an M.A. in philosophy from the University of Chicago, and a B.A. from Williams College.


  • Phone: 202.862.7190
    Email: apollock@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: (202) 419-5212
    Email: emily.rapp@aei.org

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