Cryptocurrency: Money Printer Go Brrrrrr!
grarpamp at gmail.com
Sun Apr 11 17:55:58 PDT 2021
Continuos loss of stored value intentionally imparted on them for over
100 years, yet sheeple worldwide still seem to love their shitcoins, lol...
Visualizing The Plunging Purchasing Power Of The US Dollar
The purchasing power of a currency is the amount of goods and services
that can be bought with one unit of the currency.
For example, one U.S. dollar could buy 10 bottles of beer in 1933.
Today, as Visual Capitalist's Govind Bhutanda notes, it’s the cost of
a small McDonald’s coffee.
In other words, the purchasing power of the dollar - its value in
terms of what it can buy - has decreased over time as price levels
Tracking the Purchasing Power of the Dollar
In 1913, the Federal Reserve Act granted Federal Reserve banks the
ability to manage the money supply in order to ensure economic
stability. Back then, a dollar could buy 30 Hershey’s chocolate bars.
As more dollars came into circulation, average prices of goods and
services increased while the purchasing power of the dollar fell. By
1929, the value of the Consumer Price Index (CPI) was 73% higher than
in 1913, but a dollar was now enough only for 10 rolls of toilet
Between 1929-1933, the purchasing power of the dollar actually
increased due to deflation and a 31% contraction in money supply
before eventually declining again. Fast forward to 1944 and the U.S.
dollar, fixed to gold at a rate of $35/oz, became the world’s reserve
currency under the Bretton Woods agreement.
Meanwhile, the U.S. increased its money supply in order to finance the
deficits of World War II followed by the Korean war and the Vietnam
war. Hence, the buying power of the dollar reduced from 20 bottles of
Coca-Cola in 1944 to a drive-in movie ticket in 1964.
By the late 1960s, the number of dollars in circulation was too high
to be backed by U.S. gold reserves. President Nixon ceased direct
convertibility of U.S. dollars to gold in 1971. This ended both the
gold standard and the limit on the amount of currency that could be
More Dollars in the System
Money supply (M2) in the U.S. has skyrocketed over the last two
decades, up from $4.6 trillion in 2000 to $19.5 trillion in 2021.
The effects of the rise in money supply were amplified by the
financial crisis of 2008 and more recently by the COVID-19 pandemic.
In fact, around 20% of all U.S. dollars in the money supply, $3.4
trillion, were created in 2020 alone.
How will the purchasing power of the dollar evolve going forward?
Down, just like every Fiat currency of every country
in history, and present.
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