Yes, a log chart would be better. That said, apples cannot be compared in this case; probably very few of us would choose to go back to 1914. A Tesla model Y would cost $1,680 in 1901 dollars, but would have been worth millions of those same 1901 dollars. Or nothing, depending on how much charging tech you could fit in the frunk. Many quality of life items are not covered by PPP (or money supply or other measures) adjustments.

Also we’re looking at periods that involve dramatically different monetary policy (gold standard before WWII, Bretton Woods from 1944-1976, then the current regime).

Exactly, it doesn't matter to me how much COVID contributed to the erosion of 1901 100 Dollars.

I think this graph shows the "apples to apples" comparison:

https://www.officialdata.org/us/inflation/1800?amount=1

Doing a spot check, this means $1 in in 1913 is equivalent to roughly $32.83 today.

You're basically critiquing a chart showing how purchasing power is decayed due to inflation because it isn't adjusted for "baseline" inflation. That doesn't make sense.

And yes, earlier variations are more impactful because compounding.

I will say that a better representation would be a logarithm of the inverse. The problem with doing it this way is that later changes look very small. $1.00 to $.99 is the same y-axis delta as $0.05 to $0.04 but the latter is very different.

And a strong currency usually means weak manufacturing. And I don't know how a country can be strong without a solid manufacturing sector. Like, when we a war breaks out, we ask our enemies to sell us components and medical key ingredients?

Iran is also playing its own Uno card here by saying that it would consider allowing some oil and gas shipments through the Strait if they have been bought with Chinese Yuan, than the US dollar. ( The Islamic Republic may grant safe passage to oil tankers if the cargo is traded in Chinese yuan - https://www.lbc.co.uk/article/iran-allow-chinese-ships-hormu... ).

One of the goals of the Heritage Foundation is a weak dollar. They believe they can bring manufacturing back to the US this way. I don't think they're right. I do think they will continue weakening the dollar.

#1: US military war spending concerns are largely overblown. It's expending what it already has. The spending is mostly on its own internal industry i.e. the US economy (with due respect to broken window fallacy). It arguably makes it all back from the increase in oil prices.

It's a very different thing to fire a $5m missile that you imported vs one that you made domestically with all-domestic components and labor.

You should check your hunch against the reality, at least periodically. The US dollar has strengthened since the current US-Iran conflict started.

In my worst cynical days, I think that's exactly the plan.

Erase US government debt via hyper-inflation, and let the people that will still have liquidity buy all remaining assets the middle class will be desperate to sell at pennies on the dollar.

Just noting: it's interesting to see the term "lethal trifecta" used here given the relatively recent coinage relating to LLM security: https://simonwillison.net/2025/Jun/16/the-lethal-trifecta/

anyone who sees this are early early early, yes it's very likely to happen, probabilistically.

> Europe and the Gulf diversifying both their investments and defense purchases.

With what? The euro, yuan? Or weapons from france?

I hate to admit it, but it's much less that the US is great because it's the reserve currency, and much more that the world reserve currency is the dollar because the US is what it is.

Weapons are expensive, and it only makes sense to buy them from a country that specializes in them. And a country that makes weapons at huge scale is likely to be big enough tilt the direction of the country to be all the ugly things the modern US military industrial complex is.

Add the fact that some countries are using other currencies to trade oil and goods.

Also, some countries started to use other systems beside SWIFT to transfer money.

It is by design. How else can you make trillionaires?

I think the idea is crash the stock market to force interest rate drop to refinance the massive debt.

It could also be a play to squeeze China or similar nation dependent on middle east oil. USA semicon production not ready, if there were signals that China was ready for a play on Taiwan maybe this is a gambit to buy some time.

The devaluation also mostly happened during the periods that everyone calls good old times now.

I believe the broader reason for an inflation target is to increase the value of "doing something" as opposed to "doing nothing" with money. Of course, like most policies, this acts on people with way too much of it and skews the perception of control and locus of control to those entities with too much.

>This article over and over describes inflation as a tax or destruction, without backing those claims up

Inflation due to money supply increase being like a tax is a fundamental economic result that doesn't need to be rehashed. If you were to counterfeit a trillion dollars and spend it, what happens? You get more things, reducing the remaining supply of things, and everyone else has the same amount of money but chasing a smaller amount of things, so their purchasing power per dollar goes down. It acts as a wealth transfer from other currency holders to yourself. The same applies if the government creates money, but in that case it's called a tax because wealth transfer to the government is termed taxation.

> This article over and over describes inflation as a tax or destruction, without backing those claims up...

C'mon. Whether you agree or not, any time spent in the field will expose you to this philosophy. If you disagree, ignore. There's no need to go through implicit ideas.

The purchasing power of $3.05 in 1914 would require $100 in today's time. A bag of "stuff" worth $100 today could have been purchased for $3.05 in 1914.

Technically, it does mean that $3.05 from 1914 is worth $100 today, but that's not a useful way of thinking about this. I.e., if your great-grandfather put $3.05 in an envelope in 1914 and you opened it today, it's still $3.05 worth of money (ignoring wheat pennies being a collectors items and whatnot).

I'm pretty sure you are right. Or to emphasize the devaluation, "$100 today would be worth only $3.05 in 1914."

I think it is astonishing that we accept that in a best case scenario of sustained 2% inflation, we are literally planning for the value of the dollar to be cut in half every 36 years.

Yeah, they must have gotten it the wrong way around.

This is very obviously an AI generated comment which is against the guidelines.

Why didn't you use log-scale? It seems like the obvious call.

IMO the first graph would make a lot more sense when plotted in log scale.

Also this way of framing "As of February 2026, the US dollar has lost 96.9% of its purchasing power relative to January 1914. This means that $100 in 1914 would buy only approximately $3.05 worth of goods today" is of course math-correct but difficult to understand intuitively.

I think it makes more sense to explain it in the opposite direction or in both directions: "$100 in 1914 would buy only approximately $3.05 worth of goods today, or equivalently, $100 in 1914 is worth ~ $3278 nowdays (because 100 / 3.05 ~= 32.78 "

This also makes it easier to understand that the term "millionaire == person that has 1 million USD" only makes sense around 1914, because the equivalent amount of wealth nowdays would be "millionaire == person that has 32 million USD"

Anyways, I liked a lot this visualization https://mlde8o0xa4ew.i.optimole.com/cb:VNTn.d9a/w:auto/h:aut... that visualizes the compression in time of the big value changes.

Pretty close to the 80/20 rule of thumb.

I'm not really convinced this data falsifies the narrative of a slow erosion. It's just the Pareto principle in action. I bet if you graphed the erosion of a hill you'd see the same pattern.

Take my downvote, clanker.

Really not interesting analysis. Four "concentrated episodes" totaling 30 years, hardly "concentrated episodes", especially when you have a "concentrated episode" that lasts for fifteen years. It's extremely unsurprising there are periods of inflationary growth that's higher, and some lower.

I think probably the interest rate is higher, but the value as a proportion of the starting value on LHS is less significant, compared with the periods you mention. If you look at the monthly interest rates at the bottom, it seems to support this notion.

Appeal to readers' recency bias. Covid is the most recent big change for the readers so the article has to make it more significant than it actually was. If it only talked about things happened <40years people would be 'so what?' and bounce out.

money supply increased more than all those during the covid.

It's meaningful because you pay capital gains on nominal increase in dollar value even if there is no real change in value. Inflation is thus a tax on realized non-gains at roughly 1/5th the cumulative inflation.

[delayed]

In addition to the already-stated causes of government issuing currency necessary to meet war spending and the fact that war spending produces destruction of economic capability rather than development, wars tend to introduce trade barriers and divert resources away from productive tasks. Whether barriers are legal (tariffs, embargoes), or simply higher premiums due to increased risk, less trade happens, which raises prices (inflation). Economists also really hate number-go-down even when down is good, so policy is oriented towards making sure deflation never gets a chance in the interwar development periods.

Wars usually involve the destruction of assets. If the same amount of money chases fewer assets, the money has less value.

The government issues a lot of money to pay for the war but doesn't tend to increase taxes enough to make up for it, so inflation is high.

Weapons cost ALOT and do very little to increase the future economy.

It's the issue Russia is facing right now in Ukraine. Even if Putin wanted to stop, his economy has turned entirely wartime, when it ends the country crashes on itself.

Money printing and expensive bonds?

Only half of the incidents listed were actually full-scale wars (WWI and II). The other two incidents are an oil shock and a pandemic.

The commonality between all four of these incidents is that they correspond to severe supply shocks:

- During WWI and WWII, industrial supply was rerouted by force to the war effort, leaving normal consumer demand unfulfilled.

- During the oil crisis of the 70s, a critical energy input to the American economy massively increased in price due to sanctions placed on America.

- During the COVID-19 pandemic, a significant chunk of workers were paid not to work, as a form of deliberate supply destruction to avoid the spread of a novel coronavirus.

In a "normal" economy, supply is flexible enough that you can print money and nobody even notices. The supply curve is smooth and gradual, so prices only rise a little. When supply is constrained, however, prices rise to whatever value is necessary to curtail demand, because they have to. The supply curve is a brick wall.

(Guess)

A lot of money is printed.

Also, war is not an activity that generates wealth (but to some it does, obviously).

Right, then: 1910 normal salary was 200-400 (say 300), if 97% of value of the dollar was lost in 2026 the normal salary should be 6666 - 13333 (say $10 000)

Only USD for now. Would be interesting to compare — especially currencies that went through hyperinflation episodes.