This isn't very surprising. Typical US economic policy aims for 2-3% annual inflation. That counter shows an average 2.6% inflation across 26 years, which is kind of right in the range we'd expect.
It's debatable whether this is good longterm policy - but it's been the norm in the US for decades.
This ticker's current speed is faster than that, though. It's going about 1e-9 dollar per second. That comes to about $0.03 per year, which as a fraction of the current base of $0.50, comes to 6% inflation per year.
I don't know how that speed was determined. Either it's using a linear decrease since 2000 (which isn't correct, the inverse of exponential inflation would be logarithmic decay, not linear), or it's weighting by recency for the high inflation since 2020 (which may continue, or may not.)
Good eye. The ticker was using the observed rate of change over the two most recent data points, so it's actually biased towards the most recent inflation numbers. I've updated it to simply use the slope between the oldest (January 2000) and the most recent data.
It won't be 100% accurate, but it's close enough to create a visual. And the number is always updated monthly with real data anyways.
Typical US economic policy aims for 2-3% annual inflation. That counter shows an average 2.6% inflation across 26 years, which is kind of right in the range we'd expect
We aim for "inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures" [1].
Hey all. This was merely intended as a fun visualization of inflation over long periods of time, in a format that’s slightly easier to grok for most people.
That’s it. There’s no further intention behind this, I just thought a real time “decay” visualization would be neat.
Literally everything about how this works is in the source in maybe 30 lines of js. It’s not complicated. Data is from BLS (whether or not that's accurate is another conversation entirely). I auto update the data monthly via a chron job, right around the time new data is published.
I’m not really changing this from where it’s at. It’s done as is. There are other sources out there already if you want to customize the date range or see a graph.
As much as the notion of "Purchasing Power" is economic, thus perhaps having a greater chance of being related to reality, I've been wondering if - and how - could these long-term measures account for greater diversity and "scale" of "things money can buy".
Nowadays if you're properly rich you can buy a seat on a sub-orbital flight. This wasn't an option in '00, no matter how rich you were.
On the other end of the scale, for basic things a (really) good quality loaf of bread will always be cheaper in Poland than say up north from Oslo, Norway; whereas a USA-designed made-in-China laptop pretty much never did scale with the rest of the "CPI basket"...
Point being: we sure do have numbers - what they really mean in practice is vague at best.
The real time number isn't as interesting as the potential future number. If the dollar stops being the reserve currency, the purchasing power of the dollar will crash. No more cheap borrowing, no more low interest rates, hello constant high inflation. The Iran war has made that increasingly likely to happen. It may even have been intentional.
I like this visualization, but I think there is a harder to quantify layer under this. While someone making 50k a year in 2000, would need to make 100k in 2026 for the same economic power, it is actually much worse.
In the year 2000, there were just less products and services then there are now. And the products that did exist were generally more durable and repairable than today. And in many cases, products that exist now but didn’t back then have reasonable substitutes (like renting or buying movies, since you don’t have Netflix).
I would even take it one step further and say that the ways you had to interact with those substitutes were healthier and more social than what we have now.
$1 put into the S&P 500 with dividends reinvested would be more than $6 today. That more than offsets the inflation. It also gives some clues about why the raw dollar purchasing power has been lost to inflation.
At best, this is a strong warning not to keep your money in the mattress. Saved in any safe investment would beat this inflation and typical wage would also beat this.
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It's debatable whether this is good longterm policy - but it's been the norm in the US for decades.
I don't know how that speed was determined. Either it's using a linear decrease since 2000 (which isn't correct, the inverse of exponential inflation would be logarithmic decay, not linear), or it's weighting by recency for the high inflation since 2020 (which may continue, or may not.)
It won't be 100% accurate, but it's close enough to create a visual. And the number is always updated monthly with real data anyways.
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Typical US economic policy aims for 2-3% annual inflation. That counter shows an average 2.6% inflation across 26 years, which is kind of right in the range we'd expectWe aim for "inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures" [1].
[1] https://www.federalreserve.gov/faqs/economy_14400.htm
That’s it. There’s no further intention behind this, I just thought a real time “decay” visualization would be neat.
Literally everything about how this works is in the source in maybe 30 lines of js. It’s not complicated. Data is from BLS (whether or not that's accurate is another conversation entirely). I auto update the data monthly via a chron job, right around the time new data is published.
I’m not really changing this from where it’s at. It’s done as is. There are other sources out there already if you want to customize the date range or see a graph.
Thanks for checking it out :).
Nowadays if you're properly rich you can buy a seat on a sub-orbital flight. This wasn't an option in '00, no matter how rich you were.
On the other end of the scale, for basic things a (really) good quality loaf of bread will always be cheaper in Poland than say up north from Oslo, Norway; whereas a USA-designed made-in-China laptop pretty much never did scale with the rest of the "CPI basket"...
Point being: we sure do have numbers - what they really mean in practice is vague at best.
https://www.jpmorgan.com/insights/global-research/currencies... | https://spectator.com/article/the-us-currency-is-under-attac...
In the year 2000, there were just less products and services then there are now. And the products that did exist were generally more durable and repairable than today. And in many cases, products that exist now but didn’t back then have reasonable substitutes (like renting or buying movies, since you don’t have Netflix).
I would even take it one step further and say that the ways you had to interact with those substitutes were healthier and more social than what we have now.
Don’t keep your retirement savings all in cash.
A change of one hundred millionth of a percent is not enough to consider even if I have 10 million dollars.
How is this calculated? It's a rate based on historical purchasing power parity index trends, or it's tied to live market data?