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Purchasing Power of the U.S. Dollar Over Time

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VCE Purchasing Power of the US Dollar

What is Purchasing Power?

The purchasing power of a currency is the amount of goods and services that can be bought with one unit of the currency.

For example, one U.S. dollar could buy 10 bottles of beer in 1933. Today, it’s the cost of a small McDonald’s coffee. In other words, the purchasing power of the dollar—its value in terms of what it can buy—has decreased over time as price levels have risen.

Tracking the Purchasing Power of the Dollar

In 1913, the Federal Reserve Act granted Federal Reserve banks the ability to manage the money supply in order to ensure economic stability. Back then, a dollar could buy 30 Hershey’s chocolate bars.

As more dollars came into circulation, average prices of goods and services increased while the purchasing power of the dollar fell. By 1929, the value of the Consumer Price Index (CPI) was 73% higher than in 1913, but a dollar was now enough only for 10 rolls of toilet paper.

Year EventPurchasing Power of $1What a Dollar Buys
1913Creation of the Federal Reserve System$26.1430 Hershey’s chocolate bars
1929Stock market crash$15.1410 rolls of toilet paper
1933Gold possession criminalized$19.9110 bottles of beer
1944Bretton Woods agreement$14.7120 bottles of Coca-Cola
1953End of the Korean War$9.6910 bags of pretzels
1964Escalation of the Vietnam War$8.351 drive-in movie ticket
1971End of the gold standard$6.3917 oranges
1987"Black Monday" stock market crash$2.282 boxes of crayons
1997Asian financial crisis$1.614 grapefruits
2008Global Financial crisis$1.202 lemons
2020COVID-19 pandemic$1.001 McDonald’s coffee

Between 1929-1933, the purchasing power of the dollar actually increased due to deflation and a 31% contraction in money supply before eventually declining again. Fast forward to 1944 and the U.S. dollar, fixed to gold at a rate of $35/oz, became the world’s reserve currency under the Bretton Woods agreement.

Meanwhile, the U.S. increased its money supply in order to finance the deficits of World War II followed by the Korean war and the Vietnam war. Hence, the buying power of the dollar reduced from 20 bottles of Coca-Cola in 1944 to a drive-in movie ticket in 1964.

By the late 1960s, the number of dollars in circulation was too high to be backed by U.S. gold reserves. President Nixon ceased direct convertibility of U.S. dollars to gold in 1971. This ended both the gold standard and the limit on the amount of currency that could be printed.

More Dollars in the System

Money supply (M2) in the U.S. has skyrocketed over the last two decades, up from $4.6 trillion in 2000 to $19.5 trillion in 2021.

The effects of the rise in money supply were amplified by the financial crisis of 2008 and more recently by the COVID-19 pandemic. In fact, around 20% of all U.S. dollars in the money supply, $3.4 trillion, were created in 2020 alone.

How will the purchasing power of the dollar evolve going forward?

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Real Assets

How Much Gold is in Fort Knox?

The United States Bullion Depository holds more than half of the Treasury’s $428B in gold reserves.

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In this graphic we compare Fort Knox’s gold reserves with central bank gold reserves worldwide.

How Much Gold Is in Fort Knox?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

U.S. President Donald Trump has promised to visit Fort Knox “to make sure the gold is there.”

Officially, the United States Bullion Depository (commonly known as Fort Knox) holds over half of the Treasury’s $428 billion gold reserves.

In this graphic, we put that amount into perspective by comparing Fort Knox’s reserves with central bank gold reserves worldwide. The data comes from the U.S. Mint and the World Gold Council. For illustrative purposes, we considered a pallet of 1,190 gold bars (400 troy ounces each) weighing approximately 14.8 tonnes.

What Is Fort Knox?

Located in Kentucky, Fort Knox is a U.S. Army installation that serves as the primary storage site for America’s gold reserves. The facility was established in the 1930s to protect gold from potential foreign attacks.

The first gold shipment arrived in 1937 via U.S. Mail from the Philadelphia Mint and the New York Assay Office. During World War II, Fort Knox safeguarded important U.S. documents, including the Declaration of Independence, the Constitution, and the Bill of Rights. It has also housed international treasures, such as the Magna Carta and the crown, sword, scepter, orb, and cape of St. Stephen, King of Hungary, before they were returned in 1978.

Currently, it holds 4,175 tonnes of gold, equivalent to nearly half of China’s gold reserves and four times the Swiss central bank’s reserves.

ReservesGold (Tonnes)
🇺🇸 U.S. Reserves8,133
🏛️ Fort Knox4,175
🇨🇳 China2,280
🇯🇵 Japan846
🇨🇭 Switzerland1,040
🇮🇳 India876
🇰🇷 South Korea104
🇸🇬 Singapore220
🇧🇷 Brazil130
🇲🇽 Mexico120
🇹🇭 Thailand235

Only small samples have been removed for purity testing during audits; no major transfers have occurred for years.

Gold Bar Specifications

  • Size: 7 inches × 3 5/8 inches × 1 3/4 inches
  • Weight: 400 ounces (27.5 pounds)

Extreme Security

Only a select few know the full security procedures, and no single person knows how to fully open the vault.

In 1974, a group of journalists and a Congressional delegation were allowed inside—marking the first official visit since Fort Knox’s creation. Previously, President Franklin D. Roosevelt was the only person other than authorized personnel to access the vaults.

In 2017, Treasury Secretary Steve Mnuchin, Kentucky Governor Matt Bevin, and several Congressional representatives became the second group to visit the vault.

Learn More on the Voronoi App 

If gold was shared equally, how much would you get? Check out this graphic to find out.

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Real Assets

Charted: Top Suppliers of Aluminum and Steel to the U.S.

President Trump has imposed a 25% tariff on all steel and aluminum imports.

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Charted: Top U.S. Suppliers of Aluminum and Steel

Charted: Top U.S. Suppliers of Aluminum and Steel

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

U.S. President Donald Trump has imposed a 25% tariff on all steel and aluminum imports, marking one of the most discussed measures of his first month back in the White House.

But which countries are most affected by these tariffs?

This map illustrates the top suppliers of aluminum and steel to the United States in 2024. The data comes from the U.S. Census Bureau. Aluminum includes unwrought aluminum, plates, sheets, and strips; bars, rods, and profiles; foil; wire; pipes and tubes; castings and forgings; and tube or pipe fittings. 

Canada: The Largest Partner

Canada is by far the top supplier of both steel and aluminum to the United States. The neighboring country exported $9.4 billion worth of aluminum to the U.S. in 2024, significantly ahead of the second-largest exporter, the European Union, which exported $1.5 billion.

Canada also exported $7.1 billion worth of steel last year, compared to $7 billion from the European Union.

CountrySteel Imports (USD)Aluminum Imports (USD)
🇨🇦 Canada$7.1B$9.4B
🇲🇽 Mexico$3.5B$397M
🇧🇷 Brazil$3.0B-
🇨🇳 China$799M$809M
🇹🇼 Taiwan$1.3B-
🇰🇷 South Korea$2.9B$781M
🇩🇪 Germany$1.9B$318M
🇯🇵 Japan$1.7B-
🇮🇳 India$489M$445M
🇪🇺 European Union$7B$1.5B
🇦🇪 UAE-$917M
🇧🇭 Bahrain-$535M
🇦🇷 Argentina-$468M
🇹🇭 Thailand-$271M
🇬🇧 UK$440M-

Mexico, South Korea, and Brazil are also among the top suppliers of steel to the United States. Meanwhile, the country imports aluminum from other key partners, including China, the United Arab Emirates, South Korea, Bahrain, and Argentina.

A recent report by the Center for Strategic and International Studies (CSIS) noted that the U.S. produces less than 2% of the world’s primary aluminum.

Learn More on the Voronoi App 

If you enjoyed this graphic, be sure to check out this chart illustrating the GDP impact of Trump’s tariffs on China.

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