What is the calculation? And how can you calculate it 10 decimal points?
There's a little explained if you hit the (?) at the bottom. They are taking the monthly inflation value and calculate it per tick.
USD Purchasing Power in Real Time Since 2000
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Re: USD Purchasing Power in Real Time Since 2000
#12You know what, it's not as bad as I was thinking.
For me it's the opposite. I am a bit surprised that inflation halved buying power since 2000. In my mind those level of interest usually come from the stock market or house appreciation, but I guess those are much faster (I seem to recall doubling every 8 years in the stock market and housing being a bit slower).
> I am a bit surprised that inflation halved buying power since 2000.
It's a bit more than I expected but a 2% drop 26 times gets pretty close to halving.
The number on the page suggests 2.5% average inflation.
Re: USD Purchasing Power in Real Time Since 2000
#13$1 put into the S&P 500 with dividends reinvested would be more than $6 today. That more than offsets the inflation. It also gives some clues about why the raw dollar purchasing power has been lost to inflation.
Don’t keep your retirement savings all in cash.
Re: USD Purchasing Power in Real Time Since 2000
#14Hey all. This was merely intended as a fun visualization of inflation over long periods of time, in a format that’s slightly easier to grok for most people.
That’s it. There’s no further intention behind this, I just thought a real time “decay” visualization would be neat.
Literally everything about how this works is in the source in maybe 30 lines of js. It’s not complicated. Data is from BLS (whether or not that's accurate is another conversation entirely). I auto update the data monthly via a chron job, right around the time new data is published.
I’m not really changing this from where it’s at. It’s done as is. There are other sources out there already if you want to customize the date range or see a graph.
Thanks for checking it out :).
Re: USD Purchasing Power in Real Time Since 2000
#15The real time number isn't as interesting as the potential future number. If the dollar stops being the reserve currency, the purchasing power of the dollar will crash. No more cheap borrowing, no more low interest rates, hello constant high inflation. The Iran war has made that increasingly likely to happen. It may even have been intentional.
https://www.jpmorgan.com/insights/global-research/currencies... | https://spectator.com/article/the-us-currency-is-under-attac...
Re: USD Purchasing Power in Real Time Since 2000
#16This isn't very surprising. Typical US economic policy aims for 2-3% annual inflation. That counter shows an average 2.6% inflation across 26 years, which is kind of right in the range we'd expect. It's debatable whether this is good longterm policy - but it's been the norm in the US for decades.
> Typical US economic policy aims for 2-3% annual inflation. That counter shows an average 2.6% inflation across 26 years, which is kind of right in the range we'd expect
We aim for "inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures" [1].
Re: USD Purchasing Power in Real Time Since 2000
#17This isn't very surprising. Typical US economic policy aims for 2-3% annual inflation. That counter shows an average 2.6% inflation across 26 years, which is kind of right in the range we'd expect. It's debatable whether this is good longterm policy - but it's been the norm in the US for decades.
It also says nothing of where that dollar has been in 20 years
Re: USD Purchasing Power in Real Time Since 2000
#18$1 put into the S&P 500 with dividends reinvested would be more than $6 today. That more than offsets the inflation. It also gives some clues about why the raw dollar purchasing power has been lost to inflation. Don’t keep your retirement savings all in cash.
It's a problem that our society is designed for and judged in relation to capital. Most people are paid in dollars, not shares of the S&P 500. 38% of the population doesn't even own any stocks[1]. We can't act like the dropping dollar value is fine simply because stock investments are outpacing those losses. Maybe that tradeoff benefits the people reading this, but it hurts a huge number of Americans.
[1] - https://news.gallup.com/poll/266807/percentage-americans-own...
Re: USD Purchasing Power in Real Time Since 2000
#19$1 put into the S&P 500 with dividends reinvested would be more than $6 today. That more than offsets the inflation. It also gives some clues about why the raw dollar purchasing power has been lost to inflation. Don’t keep your retirement savings all in cash.
> $1 put into the S&P 500 with dividends reinvested would be more than $6 today
On April 7 2000 a 30-year Treasury 5.71%. It would be worth $1,063 today and have paid out $1,484.60 in coupons to date. Even if you held those coupons in cash, you'd still have 2.5x'd your money.
Modern currencies split their medium-of-currency and store-of-value functions. The plain dollar is for transacting. Cash and cash equivalents are for transporting value across time.
Re: USD Purchasing Power in Real Time Since 2000
#20$1 put into the S&P 500 with dividends reinvested would be more than $6 today. That more than offsets the inflation. It also gives some clues about why the raw dollar purchasing power has been lost to inflation. Don’t keep your retirement savings all in cash.
It's a problem that our society is designed for and judged in relation to capital. Most people are paid in dollars, not shares of the S&P 500. 38% of the population doesn't even own any stocks[1]. We can't act like the dropping dollar value is fine simply because stock investments are outpacing those losses. Maybe that tradeoff benefits the people reading this, but it hurts a huge number of Americans. [1] - https://n…
> Most people are paid in dollars
Real wages are up since 2000 [1]. (Even the federal minimum wage went up 40% in nominal terms [2], though that is less than inflation.)
[1] https://fred.stlouisfed.org/series/LES1252881600Q
[2] https://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007