HYPERBITCOINIZATION: dollar purchasing power down 94% since 1914

Purchasing power ( PP -25.00% ) is a measure of strength of a currency. It represents a quantity of goods & services that can be bought by a unit of currency. Since 1914 the purchasing power of the US dollar -0.89% is down 96 %.

The calculation is simple. We take the consumer price index ( CPI 0.24% ) for the USA and divide every value by the value for our base year (1914), then multiply by 100 to get a percentage:

PP -25.00% = CPI_i / CPI_base * 100

The CPI 0.24% is itself a measure of economic strength and its rate of change forms the basis of inflation . From Wikipedia: "The CPI 0.24% is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically."

Since the introduction of a de facto system of free floating fiat currencies in the early 70s, the decline has been slow but persistent 3.66% . It looks very much like an asymptotic decay, where the value will go to zero over an infinite 2.39% amount of time. Inflation may effect the rate of decline, but it seems that the natural process in this case is decline.

Kommentar:

Lolololo I notice the explanation and equation are wrong: We divide the base value (CPI_base) by every value (CPI_i) in the consumer price index and then multiply by 100:

Purchasing power = CPI_base / CPI_i * 100

Kommentar:

for example smallbusiness.chron....sing-power-3817.html