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n February of 2001, the US Dollar would buy about 121 mg of gold. In March of 2011, it will buy about 22 mg of gold, a decline of 82%. This drop has been gradual, and the intervening years have been filled with the sell-offs and rallies that are common to all markets. This period has been characterized by massive and growing public and private debts, central bank manipulation to keep interest rates artificially low, and the creation of trillions of new dollars to keep the financial system liquid and stave off recognition of personal, corporate, municipal, state and federal bankruptcies.
But a closer look reveals that the decline has not been linear, but logarithmic – just like the decay rate of radioactive particles. Physicists refer to the rate of this decay as a "half-life"… Knowing this number lets them answer the question, "How long will it take for the radiation level to fall in half?"
In the case of a currency, how long does it take for its value to fall in half?
It turns out that over the last 10 years, the half-life of the US Dollar has been 3.5 years. In other words, every 42 months, the dollar loses half of its value!
But a closer look reveals that the decline has not been linear, but logarithmic – just like the decay rate of radioactive particles. Physicists refer to the rate of this decay as a "half-life"… Knowing this number lets them answer the question, "How long will it take for the radiation level to fall in half?"
In the case of a currency, how long does it take for its value to fall in half?
It turns out that over the last 10 years, the half-life of the US Dollar has been 3.5 years. In other words, every 42 months, the dollar loses half of its value!
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