All Might Dollar

Rough estimates puts the value of all the gold in the world at about 2 trillion dollars, since a majority of the world's currencies is backed by gold (to a degree), that means that there is a substantial disconnect between that figure and the GDP of the world which was estimated at 65 trillion dollars in 2006. Where did all the extra trillions come from? A crate of eggs is only worth however much the market is willing to pay for it. In the 1900s, a dozen eggs sold of $.23; today a dozen eggs cost about $4.00. What happened? Is the chicken demanding more money of her eggs?

While it is true that as the world's population grew, income and opportunity grow with it, the fundamental underlying factors remained the same. If you sold everything, you own today, how much are you worth? $1K, $10K, $100K or even a million Dollars? Whatever that number is, ask yourself this question, what exactly is a Dollar? It still takes the same effort to hoe a row of yams today that it took in 1960, then why are we paying more for the Labor today? If it truly were up to demand and supply, would the price of labor not be going down instead of up? The world has at least 10 times more available, trainable labor today than it had in the nineteenth century. Yet we are all earning more money than our forefathers could have ever dreamed of, doing virtually the same work. I would understand if this change in relative wealth was only happening in the US or China or even Nigeria but it is going on all over the world at the same time! If we are all stealing from each other, then why are we all getting rich? Where in God's name is the money coming from? This defies all the laws of commerce, we can't all be trading with each other and everybody is getting richer, somebody has to lose for the other to gain otherwise something is most definitely off kilter.

John D Rockefeller and William H. Vanderbilt were probably the richest men in the history of the world ever! Neither of them ever made a billion dollars in their lifetimes, yet Forbes.Com this year listed 1062 men and women with a net worth of at least one billion dollars, what could have happened to create so much wealth, in such a short time? If you have, $1000.00 and i have a tuber of yam, which is more valuable? My yam has actual value and can fulfill a need, with your dollar I have to agree that it is worth something to me, for it to be valuable.

Maurice Greenberg was the 135th wealthiest American in 2007. His net worth was $2.8 billion. He was a former chairman of AIG. He recently sold 5 million shares for $3.77 per share, now he is just another millionaire. So was he really worth a billion dollars? or Was it our inflated valuation of his assets that was distorted? The point here is that we have taken to creating monopoly money that is not backed an actual product, resource or service. Welcome to the derivatives culture, where if there is no demand, we create demand. Everybody is borrowing more, from everywhere, so that we can pay more, for everything. But where is all the extra money coming from? Idi Amin was famous for asking his Central Bank Governor to print more cash and I am afraid that in a roundabout way the world is paying him homage because everybody seems to be doing what he was doing all those years ago, wasting good paper.