Impact of 1970s Decisions on Home Buying Today
Decisions made in the 1970s continue to affect the ability of the average American to purchase a home.
During the time when gold backed the currency in the United States, it restricted both the quantity and issuance of money.
Currency expert Paul Stone claims that after the U.S. dollar was severed from gold in 1971, the government could print money without limit. This shift diminished the value of Americans’ savings and led to skyrocketing home prices.
In a conversation with Return, Stone described the gold standard as merely a limiter. He mentioned, “They raised the price of gold to $35 an ounce, so your savings were instantly diluted by 40%. … That’s evil. When the government addresses a problem at our expense, that’s wrong.”
He likened excessive money printing to creating “cotton candy out of thin air” and stated that the government focuses on building a false financial framework, which adds undue stress.
The rising costs of housing highlight this issue.
Stone pointed out that the median home price in 1970 was around $23,000, while today it stands at about $420,000. Without the inflation driven by money printing, he estimates it would be somewhere between $56,000 to $70,000.
He elaborated that consistent money printing, dating back to the Bill Clinton administration, played a key role in facilitating debt financing.
According to him, banks were able to loan out ten times more than their actual deposits, resulting in a flood of nonexistent capital. This increase in available funds and purchasing power significantly pushed up real estate prices.
With a hint of sarcasm, he questioned, “So does that mean the price will be $420,000 more than what we thought it would cost?!”
When discussing cryptocurrencies, particularly Bitcoin, as a hedge against inflation, Stone emphasized that the issue lies not with the currency itself, but with how people use it.
He theorized that the rise of numerous cryptocurrencies stems from people’s dissatisfaction with government-issued money, prompting innovation. Yet, he worries that the government can still exert control over this new realm, which feels like a “lipstick on a pig” situation.
Unless fundamental changes occur in governmental economic philosophies, the worth of all currencies—be they digital or traditional—could keep declining dramatically. “Changing the dollar’s name won’t solve the issue; it still possesses diminished value,” he warned. “If you keep printing money, you essentially destroy the currency.”
Stone’s bold solution? “Stop printing dollars. Completely start over and align with economic realities.”
He suggested offering U.S. companies a one-year window to halt overseas manufacturing, stating, “One year. One year. I don’t care if we go bankrupt. This country is effectively dead financially.”
Additionally, he encouraged younger Americans to consider relocating to more affordable areas, thereby creating communities that aren’t burdened by federal financial mismanagement.
His advice was straightforward: “The best solution is to either move to where your income outweighs your expenses or push for the government to cease printing money. … Get settled in a smaller town.”
