The U. S. dollar has significantly lost value over the past century. This decline in purchasing power is illustrated through various historical data and economic events.
Data & Discussion
• One dollar today has the purchasing power of only a few cents from 1913, the year the Federal Reserve was established.
• A graphic by Visual Capitalist shows the decline in dollar value since the early 1900s, highlighting how inflation has impacted its worth.
• Major inflationary periods correlate with global events such as World War I and II and the oil shocks of the 1970s, which led to significant increases in prices.
• The U. S. dollar was backed by gold until 1971 when this system was abandoned. This gave policymakers greater freedom but also led to easier money creation.
• Money supply growth needs to align with economic factors; excessive growth can trigger inflation.
The purchasing power of the dollar has been compromised over time due to various economic factors, particularly inflation, which has been fueled by historical events and monetary policy changes. Understanding these trends is important to grasp the current economic landscape.
https://www.zerohedge.com/precious-metals/visualizing-declining-purchasing-power-us-dollar
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