While the rich wore diamonds, the poor contented themselves with rags. The “Gilded Age” filled with Horatio Alger’s and every man a millionaire in waiting. An era when American socialite Mrs. Stuyvesant Fish held a dinner party in honour of her favourite pet dog who arrived wearing a $15,000 collar studded with diamonds…
There can never have been a time when it was as good to be rich as in the late years of the nineteenth-century and the first decade of the twentieth. There was no income tax, and there was the rewarding contrast with the vast majority which was still very poor. Writing in 1899, Thorstein Veblen observed about property, ” And it is even more to the point that property now becomes the most easily recognised evidence of a reputable degree of success as distinguished from heroic or signal achievement. It therefore becomes the conventional basis of esteem. Its possession in some amount becomes necessary in order to any reputable standing in the community. It becomes indispensable to accumulate, to acquire property, in order to retain one’s good name. When accumulated goods have in this way once become the accepted badge of efficiency, the possession of wealth presently assumes the character of an independent and definitive basis of esteem.” With sound instinct, historians refer to these years as the Gilded Age.
—Gilded Age yachtsmen embodied Thorstein Veblen’s statement: “In order to
gain and to hold the esteem of men it is not sufficient merely to possess wealth or power.
…
The wealth or power must be put in evidence, for esteem is awarded only on evidence.”—click image for source…
They might as accurately be called the Age of Gold. For some,and perhaps much, of the esteem ascribed by Veblen to wealth was given by the nature of the money. If money is weak and wasting in value, even the rich lack something in certainty as to their worth. Their minds, like those of others, leap forward to the day when their money will have disintegrated in a paper money collapse like the Reichsmark. They have a strategy for protecting themselves, but maybe it will not work, and for what then does money count? No such question arises in the minds of its possessor, or of the denigrators, if money is hard and eternal.
At the beginning of the twentieth century prices had generally been falling since the end of the Civil War, commodities about half the price they were a century earlier. For people of substance, they could reasonably expect to gain in wealth not only from accumulation of money but from a continuing increase in the purchasing power of what they had.
—Thorstein Veblen’s Theory of the Leisure Class, first published in 1899, is another
theory that helps to explain Gilded Age society. An important component of his theory,
conspicuous consumption, applies to the Gilded Age society members and their yachts.
According to Veblen, conspicuous consumption “is a means of reputability to the
gentleman of leisure.”A person’s wealth or power was not sufficient for social
standing unless they were put into evidence in business and pleasure. He further argues
that the more wasteful one’s consumption, the more reputable one’s social position. It is
clear that Gilded Age yacht owners proved Veblen’s theory correct. —click image for source…
There, were, for the affluent, other agreeable features of the time. Many enjoyments were exclusively the prerogative of the wealthy, and others could not aspire to them. Such as travel. Only the rich went to Europe, the most the poor could hope for was trip westward to the Pacific, but given the grim amenities, there was little incentive.
As no passport was needed unless one ventured into the dubious precincts of the Sultan or Czar, no one needed to worry about rates of exchange. The number of pounds, shillings and pence that could be had with a hundred dollars was as invariant as the rate at which both currencies could be exchanged into gold. Tariffs apart, there was a similar uniformity in the prices of stable products when converted into pounds, francs or dollars. Nothing now envisaged for a global currency comes close to approaching the single and universal monetary system that then existed.
ADDENDUM:
(see link at end)…In an ironic twist, political figures of each country are trying to depreciate their own currency. In theory, this strat
will give a short-term boost to their own economy, while handicapping foreign countries.REPORT: Currency War Leads China to Secretly Stockpile Gold
But there are several flaws in this line of thinking.
“The problem is that everybody can’t play the depreciation game at the same time: One country’s advantage is the others’ disadvantage,” according to US News & World Report.
Essentially, currencies around the world — dollars, yen, and pounds — are losing their purchasing power.
We all know this as inflation. In normal times, inflation runs around 3%. But if a currency war erupts, it could easily run at 10% to 50% per year.
Should You Be Worried?
Absolutely.
When a country intentionally tries to devalue its own currency, the very money in one’s bank account loses purchasing power.
Gas prices soar. Groceries get more expensive. And utility bills climb higher every month.
“The real losers in all of this are the innocent civilians,” said Aaron DeHoog, the Financial Publisher of Newsmax Media. “Those who are investing ‘safely’ could lose as much as 50% of their wealth if things get out of control.”
DeHoog should know.
He commissioned his own currency war investigation. In it, his team interviewed Steve Forbes and James Rickards, intercepted cables from China, and even got access to a warfare analysis laboratory in D.C. Read More:http://www.moneynews.com/MKTNews/james-rickards-currency-wars/2013/01/25/id/473012?promo_code=12318-1
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