Dollar Destruction

Now that ain't workin'
That's the way you do it
Lemme tell ya them guys ain't dumb
--Dire Straits

Nice graphic that provides a sense of how much purchasing power has been lost in the dollar over the years.

It should be noted that the USD was not destroyed right out of the gate. From the country's founding thru the early part of the 20th century, the purchasing power of the dollar held steady--with notably exceptions such as the Civil War.

What this means is that if the above graphic were done in 1900, then what the dollar could buy in 1900 was about the same as what the dollar could buy in 1800. There would be little if any difference.

It was not until the Federal Reserve took the reigns in 1913 that the dollar's decline began in earnest.

The gradual, covert nature of this loss in purchasing power is why inflation is often referred to as "the invisible tax."