Here is a way you can better understand the purchasing power of the United States Dollar in real time. This calculator uses the latest government CPI statistics to measure the buying power of the dollar over time. The measurement goes back to the year the dollar was placed under the control of a non-government agency, The Federal Reserve Bank. Since the installation of a central bank over the money supply of the United States of America, the dollar has been declining in value ever since.
By typing in digits you are able to view the percentage of inflation that has taken place since the dollar has been under central banking monetary regulation and control.
What is Inflation?
According to Investopedia, Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
The value of a dollar does not stay constant when there is inflation. The value of a dollar is observed in terms of purchasing power, which is the real, tangible goods that money can buy. When inflation goes up, there is a decline in the purchasing power of money. For example, if the inflation rate is 2% annually, then theoretically a $1 pack of gum will cost $1.02 in a year. After inflation, your dollar can’t buy the same goods it could beforehand.
Go to the calculator and enter in a few prices of your favorite items from yesteryear’s and see the increases in price of those goods or services to date.