Due to the international strife over the greenback, the dollar is less popular than it used to be. So, since 1971, the US dollar has lost an incredible 98% of its buying power.
Purchasing power is the number of things and services one unit of a particular currency can buy. So, the value of the US Dollar has dropped a lot in the last 50 years.
US Dollar At its Weakest
The US dollar has been all over the news in the last few weeks. In particular, international trade is focused on getting rid of the present uniformity of the currency. In response, some worrying facts about its strength have come to light.
Visual Capitalist says that since 1971, the US Dollar has lost 98% of its buying power, which is a big deal. So, this shows that the value of one unit of American money has weakened over time.
In 1933, one US dollar could buy ten bottles of beer, according to the same source. On the other hand, that same unit could only buy a small cup of coffee from McDonald’s today. So, as prices have only gone up, a single US dollar’s value has decreased over time.
In 1913, the Federal Reserve Act gave the Federal Reserve Bank the power to control the amount of money in circulation. Still, as more US dollars were spent, the value of the money started to go down. By 1929, the Consumer Price Index (CPI) value had already increased by 73%, meaning that people had less money to buy things.
On the other hand, the amount of money in the United States has multiplied in the last 20 years. In particular, it went from $4.6 trillion in 2000 to $19.5 trillion in 2021. On the other hand, the COVID-19 pandemic changed that supply, as $3.4 trillion was spent in 2020 alone.
The situation is even more worrying when considering how foreign trade is going. Also, Mohammed Al Jadaam, Saudi Arabia’s finance minister, told reporters that the country was ready to trade with other currencies.