I got my numbers from in2013dollars.com - I may be off a bit, but it’s just an experiment.
Anyway….
Imagine taking a crisp $1 bill from 1920 and fast-forwarding it to 2025. Most people know that due to inflation, that dollar would be worth about $15.78 today. But what if we hadn't printed all that extra money? What if we'd kept the money supply frozen at 1920 levels?
Over the past century, the dollar has lost 94% of its purchasing power, but thats not the whole story. If the US had maintained the 1920 money supply levels, that same dollar would theoretically be worth approximately $361.09 today. This difference comes from several key factors:
105 years of economic growth at 3.1% annually.
Population adjustments (accounting for 0.9% annual population growth)
Substantial productivity improvements (15x multiplier)
Technological advancement bonus (2.5x multiplier)
——
Different sectors experienced vastly different changes in value over this period
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Changes over time in %
Other Goods & Services-16,331.72%
Medical Care-11,271.69%
Housing-7,985.67%
Food & Beverages-6,061.53%
Transportation-3,138.32%
The difference between $15.78 (actual value) and $361.09 (theoretical fixed-supply value) demonstrates the impact of monetary policy on currency value.
Economic growth and productivity improvements would have made each dollar significantly more valuable if supply had remained constant.
Different sectors experienced vastly different rates of change, with some goods becoming relatively cheaper despite inflation.
This thought experiment reveals something fundamental about money: its value isn't just determined by what we print, but by how we manage its scarcity relative to economic growth and understanding these relationships helps us appreciate the complex interplay between monetary policy, economic growth, and purchasing power.
tl;dr buy bitcoin
