Purchasing power

Karl Denninger at Market-Ticker has a great explanation of why our purchasing power is so far down compared to our wage increases:

How Your Purchasing Power Was And Is Destroyed
Most people fail to understand basic mathematical concepts such as exponents and ratios as they apply to everyday life. We usually "get it" when it comes to the mathematical facts that are taught in school (if we passed through basic Algebra) but nobody in our government schools ever teaches how these functions apply to the real world.

The reason they don't, I assert, is that the educational establishment from the government itself on down knows full well how these functions relate to everyday life, and they also know that if you understood these facts there would be a revolution the next morning as you would understand exactly how you have been systematically and intentionally robbed by the mavens of finance with not only the consent but the active participation of your government.

With that in mind I wish to present two pieces of data today. The first is "average hourly earnings", which is from the St Louis Fed, and the second is the total systemic debt, public and private, taken from the Fed Z1.

Why the second as a point of comparison? Because as I have repeatedly pointed out "credit" (that is, debt on the other side of the balance sheet) spends exactly the same as does currency (emitted money.) Therefore, when one compares earnings power in real terms one must look at the denominator that is in actual use, which is that currency + credit.

Over the last 30 years, from 1980 to today, the average production and non-supervisory employee earnings have gone from $6.61 to $20.09 (not seasonally adjusted.) We will use the September 2012 cut-off for this because that's where our Z1 data ends (for another few weeks), which is $19.83.

This is an almost-perfect triple, which sounds great at first -- you're making three times as much, per hour, today as you were in 1980.

But how far does that money go?

Read the rest for the answer -- a short but very sobering read. We are being purposefully screwed by Bernanke, the banksters and their political cronies.