Mastodawn

USD Purchasing Power in Real Time Since 2000

https://onedollar.today/

USD Purchasing Power

traviswingo 3d ago

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.

Thanks for checking it out :).

As much as the notion of "Purchasing Power" is <macro>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.

vessenes 3d ago

The best example I heard recently was anesthesia. Costs less than $5 to make. Worth a lot more if you have surgery coming up.

SpicyLemonZest 3d ago

The PCE measure attempts to account for this in a more principled way. But precisely because it's trying to, it can't be reported as quickly, since there's no way to know how much a price change impacts PCE until you know how consumer behavior changed along with it. So the CPI data gets reported first (we got February CPI data in the middle of last month while PCE data isn't expected until Thursday), and thus drives media conversations about inflation.

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.

JumpCrisscross 3d ago

> 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].

[1] https://www.federalreserve.gov/faqs/economy_14400.htm

Why does the Federal Reserve aim for inflation of 2 percent over the longer run?

The Federal Reserve Board of Governors in Washington DC.

Board of Governors of the Federal Reserve System

bobthepanda 3d ago

Accurately aiming inflation as a central bank is like trying to keep a deflating balloon the same size using a harmonica. 2.6% isn’t bad, I don’t know that many if any central banks have managed a tighter band.

rootusrootus 3d ago

> "as measured by the annual change in the price index for personal consumption expenditures"

How closely does that track with CPI-U, which is the index this web site is using? If I believe Gemini, PCE should show a slightly lower inflation number?

downboots 3d ago

It also says nothing of where that dollar has been in 20 years

Probably down the back of a sofa.

vikingerik 3d ago

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.)

traviswingo 3d ago

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.

engineer_22 3d ago

Nice job, thoughtful execution

0xbadcafebee 3d ago

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.

https://www.jpmorgan.com/insights/global-research/currencies... | https://spectator.com/article/the-us-currency-is-under-attac...

De-dollarization: The end of dollar dominance? | J.P. Morgan

What is de-dollarization, and how is it playing out in markets, trade and more? Read the latest from J.P. Morgan Research.

JumpCrisscross 3d ago

> If the dollar stops being the reserve currency, the purchasing power of the dollar will crash

This is far from clear.

The Federal Reserve's Real Broad Dollar Index (RTWEXBGS) is 113.51 as of February. Not saying it would crash losing all of that 13.51 excess overnight, but it's still overvalued against foreign currencies.

gritspants 3d ago

Is this not what the current US administration seeks? You can't simultaneously be the reserve currency and hope to be a net exporter at the same time.

engineer_22 3d ago

Perpetual trade deficit is modern system of tribute.

JumpCrisscross 3d ago

> Perpetual trade deficit is modern system of tribute

Probably not. Equatorial Guinea, Palau and Kyrgyzstan run the largest current-account deficits as fractions of GDP [1]. (Current account counts goods and services.)

[1] https://en.wikipedia.org/wiki/List_of_countries_by_current_a...

List of countries by current account balance - Wikipedia

JumpCrisscross 3d ago

> it's still overvalued against foreign currencies

That would make imports more expensive and exports more competitive. Some pain, given we run a deficit [1]. But $50bn/month adustment in a $30tn economy is 2%. Not fun. But not a "crash."

(There is a genuine argument to be made that American voters have been rejecting dollar hegemony across multiple elections for a couple of decades.)

[1] https://www.bea.gov/data/intl-trade-investment/international...

International Trade in Goods and Services | U.S. Bureau of Economic Analysis (BEA)

> No more cheap borrowing, no more low interest rates, hello constant high inflation.

Do you mean that we’ll have high inflation because we’ll keep running massive deficits? Because many countries that don’t have the reserve currency also have low inflation.

I think some people think that high velocity is deflationary. So if suddenly dollars are not traded as much, it slow down the dollar velocity and this has a global inflationnary effect. This isn't a bad theory tbh, i believe at least half of it (money velocity decreasing have an inflationary effect on assets, productive or not)

dlcarrier 3d ago

It's not the deficit itself, it's the quantitative easing that is used to pay for most of the deficit. If the US dollar weren't a reserve currency, printing more money would have a much larger inflationary impact.

kelseyfrog 3d ago

> If the dollar stops being the reserve currency, the purchasing power of the dollar will crash.

And thus manufacturing will return to the US! I thought we wanted that. It's the only way out of the Triffin dilemma.

I question the accuracy. In 2010 I could buy a McDonald's double cheeseburger for $1. Now they're like $3 and they took off a slice of cheese.

Double cheeseburger has always had and still has two slices of cheese. The McDouble (which used to be $1) always had a single slice of cheese.

The real hack was asking them to put Big Mac sauce on the McDouble. For $.30 it was pretty damn close at 1/3 the price.

bobthepanda 3d ago

The Big Mac Index has the fatal flaw in that it assumes the value of Big Mac is consistent over time; McDonald’s has been at the forefront of fast food attempting to break into a more high income market segment.

traviswingo 3d ago

Yeah, same here. Perhaps the Big Mac Index [0] is what you want.

[0] https://en.wikipedia.org/wiki/Big_Mac_Index

Big Mac Index - Wikipedia

vikingerik 3d ago

Of course this is comparing to one data point that is an outlier. If people are choosing to pay $3 in today's dollars for it, that means that in 2010 McDonald's was underpricing that item relative to its market value. Presumably deliberately as a promotion. Compare across everything you buy and compare like-to-like if you want to judge its accuracy.

In the last 12-24 months the price of fast food in particular has risen at a higher rate than inflation has hit other types of food and goods. Fast food makes no economic sense anymore.

And you're right, the food has gotten worse as well.

engineer_22 3d ago

Fast food is gut wraughting