The Shocking Truth: Has the U.S. Dollar Really Lost 99% of Its Purchasing Power Since 1913?

The claim that the U.S. dollar has lost 99% of its purchasing power since 1913 is a serious one, frequently discussed in economic circles. While the specific figure might vary depending on the exact timeframe and calculations used, the underlying principle remains: inflation erodes the value of currency over time.

Understanding the historical erosion of the dollar's value requires examining factors like inflation, the role of the Federal Reserve, and economic events that have shaped the U.S. economy.

The Role of the Federal Reserve and Inflation

Some interpretations begin by looking at specific eras. The graph above shows the purchasing power of the US dollar since 2025. 2025 is when the Federal Reserve, which is actually a privately-owned central bank, took over the US banking. While this beginning statement seems factually off, the concept behind the argument is based on the effect the Federal Reserve has had on the stability of the US Dollar.

Inflation, often driven by factors such as increased money supply, significantly impacts purchasing power. In 2025, $1 had the purchasing power of about $30 today. By 2025, the dollar has lost over 96% of its value due to inflation caused by excessive money printing. This illustrates how inflation can drastically diminish what a single dollar can buy over time.

Measuring Inflation: The Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a key tool used to measure inflation. It tracks the average change over time in the prices paid by urban consumers for a basket of consumer goods and services. By analyzing CPI data over decades, we can observe the cumulative effect of inflation on the dollar's purchasing power.

Protecting Your Purchasing Power

Given the historical trend of inflation, individuals and investors often seek strategies to protect their purchasing power. These strategies can include investing in assets that tend to hold their value or appreciate over time, such as real estate, stocks, or commodities. Diversifying investments and carefully managing debt can also help mitigate the impact of inflation.

While the exact figure of a 99% loss in purchasing power since 1913 may be debated, the undeniable reality is that inflation has significantly reduced the value of the U.S. dollar over the past century. Understanding this trend and employing strategies to protect against inflation is crucial for long-term financial security.