My name is Ludwig Von Meeses. That is Von Meeces of the Mousetrian School of Mousenomics, not to be confused with Von Mises of the Austrian School of Economics. I am here today to help you humans gain a better understanding of your economy by studying Mousenomics.
Mice are born with a built in understanding of mousenomics. Unfortunately, humans are not born with any inherent understanding of their economy.
Mice understand that if there are two chunks of cheese on the counter of the same size and shape, it is always better to choose the cheddar over the swiss. Cheddar is always a solid block of cheese while swiss has holes where there is no cheese. We also understand that there are rats in the cheese making business that put more and bigger holes in the swiss cheese and sell it for the same price that honest cheese makers sell swiss with smaller and fewer holes. We mice know a rat when we see one.
Humans on the other hand, don’t seem to have a clue. I have been studying one such human for some time. His name is Bob Cannon. He graduated from college in 1969 and went to work for another human who compensated him in money rather than cheese. Money, like cheese is a generic term for a store of value. Just as we have different kinds of cheese like cheddar, swiss and muenster, humans have different stores of value like dollars, gold and silver. Bob could have had $8400 per year or 240 oz. Of gold (at $35 per oz.). Not understanding mousenomics, the dummy took his pay in dollars, he might as well have taken swiss cheese.
Not long after Cannon started to work, a big rat in Washington, DC said the government would no longer back dollars with precious metals like silver and gold. If you were a mouse, you would automatically understand that this rat intended to put bigger holes in the swiss cheese. For humans it is called inflation.
Cannon worked hard all his life and thought he was doing OK. My studies show that the rats have convinced the humans they are doing OK while putting ever bigger holes in the swiss cheese.
Let me explain. Cannon bought a house shortly after the rat changed the money. It was a house that cost him $25000. He could have paid for it with 706 oz. Of gold ($35.4 per oz). Today, that 706 oz. Of gold would buy him a $670,000 home (at $955 per oz.).
He couldn’t hope to buy a home at that price today.
Looking at it another way, humans invest in the stock market as represented by the DOW Jones Average. Back when the rat made the changes in Washington, The DOW was at 890 and Gold was at $35.4 per oz. Today the DOW is at about 9300 and gold is at about $955 per oz. If the Dow had gone up as much as gold, the market would be over 24000 not 9300, but no…Cannon invested in the DOW.
Even taking his salary of $8400 per year in 1969 or 240 oz. Of gold. If he were still making the same 240 oz. Per year, his salary in dollars would be $229,200 and this poor human thinks he is doing OK.