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The Power of the Dollar | USMR Market Insights

the power of the dollar
May 8, 2019

The U.S. dollar's spending ability has been affected drastically in the span of the last 100 years. Inflation, economic difficulties, and a wavering economy have contributed to the dollar's decline in buying power. Coy Wells breaks it down in today's edition of USMR Market Insights.

 

The Power of the Dollar – Video Transcription

Coy Wells: 00:00  

The value of money is not static in short term, it may ebb and flow against other currencies on the market, and in the long term our currency tends to lose buying power over time through inflation as more currency units are created. Inflation occurs as a result of too much money chasing too few goods, and it is often influenced by government policies, central banks and other factors. In this short timeline of monetary history in the 20th century, we look at the changes in money supply and the buying power of the U.S. dollar in each decade.

Coy Wells: 00:33          

By the 1900s, the U.S. money supply sat at roughly $7 billion, and a dollar during that time could buy a pair of good patent leather shoes. By the 1910s, the money supply had increased to $13 billion, which could buy a nice woman's dress. By the 1920s the U.S. money supply increased by $35 billion, which would buy you five pounds of sugar. And by the 1930s, the supply again increased to $46 billion, and what one dollar could buy was 16 cans of Campbells soup. By the 1940s, the U.S. money supply continued to increase to $55 billion, and one dollar could buy 20 bottles of Coca Cola. In the 1950s, we again increased to $151 billion and a dollar at that point in time could buy you one Mr. Potato head. In the 1960s, U.S. money supply increased a $211 billion and one dollar could buy two movie tickets. By the 1970s, the U.S. money supply increased a $401 billion and one dollar could buy three Morton TV dinners. And then again in the 1980s, the U.S. dollar supply increased to $1,560 billion, and one dollar could buy you one bottle of Heinz Ketchup.

Coy Wells: 01:45   

As we move into modern times, the 1990s, the U.S. dollar supply increased to $3,277 billion, which one dollar could buy one gallon of milk, and by the 2000s, U.S. money supply increased by $4,917 billion and one dollar could buy a Wendy's hamburger. By 2010, the U.S. money supply to increased to $13,291 billion and one dollar could buy you one song on iTunes. At the turn of the 20th century, the money supply was just at $7 billion. Today we are literally 1,900 times more dollars in existence today than we were during the time frame of the earlier 19th century.

Coy Wells: 02:29  

While economic growth has meant we all make many more dollars in today's time, it is still phenomenal to think that during the past moments in the 20th century, a dollar could buy a pair of patented leather shoes. The buying power of the dollar has changed significantly over the last century, but it's important to recognize that it could change even faster considering that countries around the world are becoming more independent and less dependent on the U.S. dollar.

Coy Wells: 02:54              

With that said, if you'd like to get more information on this topic, you can pick up U.S. Money Reserve's latest report, In Debt & Out of Time. It has a lot of great information in regards to the topic discussed today, and it can also give you some insight on the devaluation of the U.S. dollar. So please call the number on your screen, or click on the link below to get your copy. If you're watching from YouTube, subscribe to our page so you don't miss a single episode. I'm U.S. Money Reserve's Coy Wells, and as always, thank you for watching market insights.

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