Real Assets
Purchasing Power of the U.S. Dollar Over Time
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 | Event | Purchasing Power of $1 | What a Dollar Buys |
|---|---|---|---|
| 1913 | Creation of the Federal Reserve System | $26.14 | 30 Hershey’s chocolate bars |
| 1929 | Stock market crash | $15.14 | 10 rolls of toilet paper |
| 1933 | Gold possession criminalized | $19.91 | 10 bottles of beer |
| 1944 | Bretton Woods agreement | $14.71 | 20 bottles of Coca-Cola |
| 1953 | End of the Korean War | $9.69 | 10 bags of pretzels |
| 1964 | Escalation of the Vietnam War | $8.35 | 1 drive-in movie ticket |
| 1971 | End of the gold standard | $6.39 | 17 oranges |
| 1987 | "Black Monday" stock market crash | $2.28 | 2 boxes of crayons |
| 1997 | Asian financial crisis | $1.61 | 4 grapefruits |
| 2008 | Global Financial crisis | $1.20 | 2 lemons |
| 2020 | COVID-19 pandemic | $1.00 | 1 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?
Real Assets
Visualizing the Gold-to-Oil Ratio (1946-2024)
This graphic shows the gold-to-oil ratio since 1946, charting the significant shifts between the world’s two biggest commodities.
Visualizing the Gold-to-Oil Ratio (1946-2024)
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.
Gold and oil—two of the most influential commodities on the planet—have a fascinating relationship that has evolved over decades, captured in the gold-to-oil ratio.
The gold-to-oil ratio represents the number of barrels of crude oil equivalent to the price of one troy ounce of gold.
It is viewed as an indicator of the health of the global economy, indicating when gold or oil prices are significantly out of balance with each other.
This graphic shows the gold-to-oil ratio since 1946, using data compiled by Macrotrends.
What is the Gold-to-Oil Ratio?
The gold-to-oil ratio expresses the price relationship between gold and West Texas Intermediate (WTI) crude oil. WTI is a grade of crude oil and one of the three primary benchmarks for oil pricing, along with Brent and Dubai Crude.
A high ratio indicates that gold is relatively expensive compared to WTI crude oil, and vice versa. This can indicate periods of outsized demand for energy in the form of crude oil, or periods of monetary uncertainty when there is higher demand for gold.
Below is the gold-to-oil ratio every decade between 1946 and 2024.
| Date | Gold to Oil Ratio |
|---|---|
| 1946-01-01 | 29.91 |
| 1950-01-01 | 13.62 |
| 1960-01-01 | 11.89 |
| 1970-01-01 | 10.91 |
| 1980-01-01 | 20.86 |
| 1990-01-01 | 18.10 |
| 2000-01-01 | 10.29 |
| 2010-01-01 | 14.80 |
| 2020-01-01 | 30.66 |
| 2024-01-01 | 26.88 |
| 2024-11-01 | 39.06 |
During the 1950s and 1960s, fixed gold prices and stable oil prices kept the ratio between 11 and 13 for 20 years.
Since the 1980s, the ratio has typically traded within the range of 6 to 40 with a notable exception: in 2020 when the ratio reached a high of 91.1. The peak in 2020 was driven by COVID-19, which boosted gold prices as a safe haven while oil demand and prices plummeted due to global lockdowns.
In contrast, between 2000 and 2008, oil prices were relatively high compared to gold. During this period, the ratio dropped to nearly 6 but never rose above 16.
When comparing the two commodities, it’s worth remembering that the crude oil market is around 10 times larger than that of gold, making it the largest commodity market in the world.
Learn More on the Voronoi App 
If you enjoyed this graphic, make sure to check out this graphic that shows the top countries by natural resource value.
Real Assets
Visualizing the Gold-to-Silver Ratio Since 1869
The gold-to-silver ratio shows how many ounces of silver equal one ounce of gold.
Visualizing the Gold-to-Silver Ratio Since 1869
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.
The gold-to-silver ratio shows how many ounces of silver equal one ounce of gold. It is the oldest continuously tracked exchange rate, dating back to 3200 BCE. Historically, the ratio played an important role in ensuring coins had their appropriate value, and it remains an important technical metric for metals investors today.
This graphic shows the gold-to-silver ratio since 1869. Data was compiled by Longtermtrends.
The History of the Gold-to-Silver Ratio
The earliest recorded instance of the gold-to-silver ratio dates back to 3200 BCE, when Menes, the first king of Ancient Egypt, set a ratio of 2.5:1. Since then, the ratio has generally seen gold’s value rise as empires and governments became more familiar with the scarcity and difficulty of production for both metals.
Ancient Rome was one of the earliest civilizations to set a gold-to-silver ratio, starting as low as 8:1 in 210 BCE. Over the years, varying gold and silver inflows from Rome’s conquests caused the ratio to fluctuate between 8 and 12 ounces of silver for every ounce of gold.
By 46 BCE, Julius Caesar had established a standard gold-to-silver ratio of 11.5:1, shortly before it was bumped to 11.75:1 under Emperor Augustus.
In more modern times, the ratio peaked in 1939 at 98:1 after U.S. President Franklin D. Roosevelt changed the statutory price of gold from $20.67 per troy ounce to $35.
In 2020, the ratio reached an all-time high of 125.1 during the COVID-19 pandemic, as investors sought gold as a safe haven.
| Year | Ratio |
|---|---|
| 1968-01-01 | 16.2 |
| 1968-05-01 | 17.1 |
| 1969-01-01 | 21.3 |
| 1969-05-01 | 24.5 |
| 1969-09-01 | 24.2 |
| 1970-01-01 | 19.5 |
| 1970-09-01 | 19.6 |
| 1971-09-01 | 27.7 |
| 1972-05-01 | 31.9 |
| 1973-01-01 | 31.9 |
| 1973-05-01 | 42.7 |
| 1974-01-01 | 35 |
| 1974-05-01 | 31.4 |
| 1974-09-01 | 37.4 |
| 1975-01-01 | 41.7 |
| 1975-05-01 | 37.9 |
| 1975-09-01 | 34.8 |
| 1976-01-01 | 33.7 |
| 1976-09-01 | 25 |
| 1977-05-01 | 30.9 |
| 1977-09-01 | 32.7 |
| 1978-05-01 | 34 |
| 1979-01-01 | 37.3 |
| 1979-05-01 | 31.3 |
| 1980-01-01 | 14 |
| 1980-05-01 | 38.9 |
| 1980-09-01 | 39.1 |
| 1981-09-01 | 45.9 |
| 1982-09-01 | 52.7 |
| 1983-09-01 | 34.3 |
| 1984-05-01 | 42.1 |
| 1985-01-01 | 49 |
| 1985-05-01 | 51.1 |
| 1985-09-01 | 53.9 |
| 1986-01-01 | 56.3 |
| 1986-05-01 | 66.7 |
| 1986-09-01 | 76 |
| 1987-01-01 | 75 |
| 1987-09-01 | 60.1 |
| 1988-09-01 | 65.3 |
| 1989-05-01 | 66.7 |
| 1990-01-01 | 77.1 |
| 1990-05-01 | 74.2 |
| 1991-01-01 | 94.3 |
| 1991-05-01 | 90.3 |
| 1991-09-01 | 90.7 |
| 1992-01-01 | 90.8 |
| 1992-09-01 | 91.5 |
| 1993-09-01 | 78.2 |
| 1994-09-01 | 71.2 |
| 1995-05-01 | 66.2 |
| 1996-01-01 | 74.9 |
| 1996-05-01 | 72.9 |
| 1996-09-01 | 74.7 |
| 1997-01-01 | 77.1 |
| 1997-05-01 | 71.8 |
| 1997-09-01 | 69 |
| 1998-01-01 | 48.4 |
| 1998-09-01 | 57.8 |
| 1999-09-01 | 49.4 |
| 2000-05-01 | 54.9 |
| 2001-01-01 | 59.4 |
| 2001-05-01 | 60.4 |
| 2002-01-01 | 60.6 |
| 2002-05-01 | 68.2 |
| 2002-09-01 | 69.9 |
| 2003-01-01 | 72.2 |
| 2003-05-01 | 71.8 |
| 2003-09-01 | 73.5 |
| 2004-01-01 | 69.4 |
| 2004-09-01 | 60.3 |
| 2005-09-01 | 63.6 |
| 2006-05-01 | 47.3 |
| 2007-01-01 | 49.3 |
| 2007-05-01 | 51.1 |
| 2008-01-01 | 56.3 |
| 2008-05-01 | 52.8 |
| 2008-09-01 | 60.9 |
| 2009-01-01 | 78.5 |
| 2009-09-01 | 64.1 |
| 2010-09-01 | 64.2 |
| 2011-09-01 | 43.6 |
| 2012-05-01 | 54.1 |
| 2013-01-01 | 54.5 |
| 2013-05-01 | 61.5 |
| 2013-09-01 | 58 |
| 2014-01-01 | 61.2 |
| 2014-05-01 | 67 |
| 2014-09-01 | 66.5 |
| 2015-01-01 | 75.4 |
| 2015-09-01 | 78.3 |
| 2016-09-01 | 69.9 |
| 2017-05-01 | 74.8 |
| 2017-09-01 | 74.8 |
| 2018-01-01 | 76.7 |
| 2018-05-01 | 80 |
| 2018-09-01 | 84 |
| 2019-01-01 | 82.4 |
| 2019-05-01 | 87.3 |
| 2019-09-01 | 81.6 |
| 2020-01-01 | 84.9 |
| 2020-05-01 | 114.6 |
| 2020-09-01 | 71 |
| 2021-01-01 | 71.6 |
| 2021-05-01 | 67.1 |
| 2021-09-01 | 75.8 |
| 2022-01-01 | 78.7 |
| 2022-05-01 | 82.6 |
| 2022-09-01 | 96.2 |
| 2023-01-01 | 76.4 |
| 2023-05-01 | 79.3 |
| 2023-09-01 | 80.5 |
| 2024-01-01 | 87 |
| 2024-05-01 | 86.5 |
| 2024-09-01 | 88.5 |
Learn More on the Voronoi App
If you enjoyed this graphic, make sure to check out this graphic that shows the top countries by natural resource value.
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