Here you are looking at the reason why saving via money-market funds will make you poor. This graph clearly shows what very few economists, and certainly no polititians in power, are willing to tell us - that most currencies are being debased at an increasing rate. The reader who is serious about protecting his wealth should understand the game that is being played by developed nations regarding the use of currency devaluation in an atempt to save their financial systems.
America was on the gold standard during the Great Depression.(That means that every dollar in circulation actually served as a "cheque" for gold held by the Federal Reserve). Between 1929 to 1932 the Dow Jones lost 89% of it's value. To compare the severity of the current situation we have to do so in terms of the same "currency". If we calculate the value of the S&P500 in this case, in terms of the currency that was used during the Great Depression (gold standard) and not in terms of the current dollar (Fiat currency) the picture becomes clear. Since the top of the bull market in 2000 to the low in 2009 the S$P500 lost 85% of it's value. In terms of the current dollar it only lost 53% of it's value over that time. Currently the index is only 20% below the all time high in terms of the current dollar. In terms of the "gold standard dollar" it is 84% below the high. The difference between the two is the result of the biggest con-game ever played and was actually already won by Robert Mugabe who managed to get away with printing dollars untill inflation reached millions of percentage points.
Don't be fooled. Buy assets that protect you from inflation. We believe a well managed portfolio of listed companies offers the best opportunity to benefit from the actions of the Federal Reserve in America and Reserve Banks in the developed world. Cash in the bank and money-market funds will be the biggest casualty over the longer term.
