Infographic: The Buying Power of the U.S. Dollar Over the Last Century
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Visualizing the Buying Power of the U.S. Dollar Over the Last Century

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The Buying Power of the U.S. Dollar Over the Last Century

The Buying Power of the U.S. Dollar Over the Last Century

The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

The value of money is not static. In the short term, it may ebb and flow against other currencies on the market. In the long-term, a currency tends to lose buying power over time through inflation, and as more currency units are created.

Inflation is a result of too much money chasing too few goods – and it is often influenced by government policies, central banks, and other factors. In this short timeline of monetary history in the 20th century, we look at major events, the change in money supply, and the buying power of the U.S. dollar in each decade.

A Short Timeline of U.S. Monetary History

1900s
After the Panic of 1907, the National Monetary Commission is established to propose legislation to regulate banking.

U.S. Money Supply: $7 billion
What $1 Could Buy: A pair of patent leather shoes.

1910s
The Federal Reserve Act is signed in 1913 by President Woodrow Wilson.

U.S. Money Supply: $13 billion
What $1 Could Buy: A woman’s house dress.

1920s
U.S. dollar bills were reduced in size by 25%, and standardized in terms of design.

The Fed starts using open market operations as a tool for monetary policy.

U.S. Money Supply: $35 billion
What $1 Could Buy: Five pounds of sugar.

1930s
To deal with deflation during the Great Depression, the United States suspends the gold standard. President Franklin D. Roosevelt signs Executive Order 6102, which criminalizes the possession of gold.

By no longer allowing gold to be legally redeemed, this removes a major constraint on the Fed, which can now control the money supply.

U.S. Money Supply: $46 billion
What $1 Could Buy: 16 cans of Campbell’s Soup

1940s
The massive deficits of World War II are almost financed entirely by the creation of new money by the Federal Reserve.

Interest rates are pegged low at the request of the Treasury.

Under Bretton-Woods, the “gold-exchange standard” is adopted.

U.S. Money Supply: $55 billion
What $1 Could Buy: 20 bottles of Coca-Cola

1950s
The Korean War starts in 1950, and inflation is at an annualized rate of 21%.

The Fed can no longer manage such low interest rates, and tells the Treasury that it can “no longer maintain the existing situation”.

U.S. Money Supply: $151 billion
What $1 Could Buy: One Mr. Potato Head

1960s
An agreement, called the Treasury-Federal Reserve Accord, is reached to establish the central bank’s independence.

By this time, U.S. dollars in circulation around the world exceeded U.S. gold reserves. Unless the situation was rectified, the country would be vulnerable to the currency equivalent of a “bank run”.

U.S. Money Supply: $211 billion
What $1 Could Buy: Two movie tickets.

1970s
In 1971, President Richard Nixon ends direct convertibility of the United States dollar to gold.

The period following the Nixon Shock is uncertain. The federal deficit doubles, stagflation hits, and the oil price skyrockets – all during the Vietnam War.

Over the decade, the dollar loses 1/3 of its value.

U.S. Money Supply: $401 billion
What $1 Could Buy: Three Morton TV dinners.

1980s
The stock market crashes in 1987 on Black Monday.

The Federal Reserve, under newly-appointed Alan Greenspan, issues the following statement:

“The Federal Reserve, consistent with its responsibilities as the nation’s central bank, affirmed today its readiness to serve as a source of liquidity to support the economic and financial system.”

The Dow would recover by 1989, with no prolonged recession occurring.

U.S. Money Supply: $1,560 billion
What $1 Could Buy: One bottle of Heinz Ketchup.

1990s
This decade is generally considered to be a time of declining inflation and the longest peacetime economic expansion in U.S. history.

During this decade, many improvements are made to U.S. paper currency to prevent counterfeiting. Microprinting, security thread, and other features are used.

U.S. Money Supply: $3,277 billion
What $1 Could Buy: One gallon of milk.

2000s
After the Dotcom crash, the Fed drops interest rates to near all-time lows.

In 2008, the Financial Crisis hits and the Fed begins “quantitative easing”. Later, this would be known as QE1.

U.S. Money Supply: $4,917 billion
What $1 Could Buy: One Wendy’s hamburger.

2010-
After QE1, the Fed holds $2.1 trillion of bank debt, mortgage-backed securities, and Treasury notes. Shortly after, QE2 starts.

In 2012, it’s time for QE3.

Purchases were halted in October 2014 after accumulating $4.5 trillion in assets.

U.S. Money Supply: $13,291 billion
What $1 Could Buy: One song from iTunes.

The Changing Value of a Dollar

At the turn of the 20th century, the money supply was just $7 billion. Today there are literally 1,900X more dollars in existence.

While economic growth has meant we all make many more dollars today, it is still phenomenal to think that during past moments in the 20th century, a dollar could buy a pair of leather shoes or a women’s house dress.

The buying power of a dollar has changed significantly over the last century, but it’s important to recognize that it could change even faster (up or down) under the right economic circumstances.

About The Money Project

The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

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Saying Bye to Facebook: Why Companies Change Their Name

Facebook’s impending rebrand will impact the company’s future. Why do companies change their name, and what can we learn from past examples?

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As anyone who’s started a company knows, choosing a name is no easy task.

There are many considerations, such as:

  • Are the social handles and domain name available?
  • Is there a competitor already using a similar name?
  • Can people spell, pronounce, and remember the name?
  • Are there cultural or symbolic interpretations that could be problematic?

The list goes on. These considerations are amplified when a company is already established, and even more difficult when your company serves billions of users around the globe.

Facebook (the parent company, not the social network) has changed its name to Meta, and we’ll examine some probable reasons for the rebrand. But first we’ll look at historical corporate name changes in recent history, exploring the various motivations behind why a company might change its name. Below are some of the categories of rebranding that stand out the most.

Social Pressure

Societal perceptions can change fast, and companies do their best to anticipate these changes in advance. Or, if they don’t change in time, their hands might get forced.

corporate name changes social pressure

As time goes on, companies with more overt negative externalities have come under pressure—particularly in the era of ESG investing. Social pressure was behind the name changes at Total and Philip Morris. In the case of the former, the switch to TotalEnergies was meant to signal the company’s shift beyond oil and gas to include renewable energy.

In some cases, the reason why companies change their name is more subtle. GMAC (General Motors Acceptance Corporation) didn’t want to be associated with subprime lending and the subsequent multi-billion dollar bailout from the U.S. government, and a name change was one way of starting with a “clean slate”. The financial services company rebranded to Ally in 2010.

Hitting the Reset Button

Brands can become unpopular over time because of scandals, a decline in quality, or countless other reasons. When this happens, a name change can be a way of getting customers to shed those old, negative connotations.

corporate name changes restart button

Internet and TV providers rank dead last in customer satisfaction ratings, so it’s no surprise that many have changed their names in recent years.

We Do More

This is a very common scenario, particularly as companies go through a rapid expansion or find success with new product offerings. After a period of sustained growth and change, a company may find that the current name is too limiting or no longer accurately reflects what the company has become.

corporate name changes broadening the scope

Both Apple and Starbucks have simplified their company names over the years. The former dropped “Computers” from its name in 2007, and Starbucks dropped “Coffee” from its name in 2011. In both these cases, the name change meant disassociating the company with what initially made them successful, but in both cases it was a gamble that paid off.

One of the biggest name changes in recent years is the switch from Google to Alphabet. This name change signaled the company’s desire to expand beyond internet search and advertising.

The Start-Up Name Pivot

Another very common name change scenario is the early-stage name change.

start-up name change

In the world of music, there’s speculation that limited melodies and subconscious plagiarism will make creating new music increasingly difficult in the future. Similarly, there are millions of companies in the world and only so many short and snappy names. (That’s how we end up with companies called Quibi.)

Many of the popular digital services we use today started with very different names. The Google we know today was once called Backrub. Instagram began life as Bourbn, and Twitter began life as “Twittr” before finding a spare E in the scrabble pile.

Copyright Problems

As mentioned above, many companies start out as speculative experiments or passion projects, when a viable, well-vetted name isn’t high on the priority list. As a result, new companies can run into problems with copyright.

corporate name change copyright

This was the case when Picaboo, the precursor of Snapchat, was forced to change their name in 2011. The existing Picaboo—a photobook company—was not thrilled to share a name with an app that was primarily associated with sexting at the time.

The fight over the name WWF was a more unique scenario. In 1994, the World Wildlife Fund and the World Wrestling Federation had a mutual agreement that the latter would stop using the initials internationally, except for fleeting uses such as “WWF champion”. In the end though, the agreement was largely ignored, and the issue became a sticking point when the wrestling company registered wwf.com. Eventually, the company rebranded as WWE (World Wrestling Entertainment) after losing a lawsuit.

Course Correction

To err is human, and rebranding exercises don’t always hit the mark. When a name change is universally panned or, perhaps worse, not relevant, it’s time to course correct.

name changes course correction

Tribune Publishing was forced to backtrack after their name change to Tronc in 2016. The widely-panned name, which was stylized in all lower case, was seen as a clumsy attempt to become a digital-first publisher.

Why Is Facebook Changing Its Name?

Facebook undertook this name change for a number of reasons, but chief among them is that the brand is irrevocably associated with scandals, negative externalities, and Mark Zuckerberg.

Even before the most recent outage and whistle-blowing scandal, Facebook was already the least-trusted tech company by a long shot. Mark Zuckerberg was once the most admired CEO in Silicon Valley, but has since fallen from grace.

It’s easy to focus on the negative triggers for the impending name change, but there is some substance behind the change as well. For one, Facebook recognizes that privacy issues have put their primary source of revenue at risk. The company’s ad-driven model built upon its users’ data is coming under increasing scrutiny with each passing year.

As well, there is substance behind the metaverse hype. Facebook first signaled their ambitions in 2014, when it acquired the virtual reality headset maker Oculus. A sizable portion of the company’s workforce is already working on making the metaverse concept a reality, and there are plans to hire 10,000 more people in Europe over the next five years.

It remains to be seen whether this immense gamble pays off, but for the near future, Zuckerberg and Facebook’s investors will be keeping a close eye on how the media and public react to the new Meta name and how the transition plays out. After all, there are billions of dollars at stake.

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Visualizing Social Risk in the World’s Top Investment Hubs

In a third of the world’s top investment hubs, citizens face significant threats to their civil, political, and labor rights.

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Social Risk

Visualizing the Social Risk of the World’s Top Investment Hubs

As social responsibility becomes an important aspect of doing business, it’s more crucial than ever for decision-makers to understand the risks associated with various global markets.

This graphic, using data from a report by Verisk Maplecroft, looks at the world’s top cities for foreign direct investment (FDI) and assesses their relative levels of social risk.

In the article below, we’ll take a look at the research methodology to explain how risk was assessed in the report and touch on some key markets that placed high on the ranking.

The Relationship Between FDI and Social Risk

To look at the relationship between FDI and social risk, the report identified the top 100 cities for FDI in 2020, using data from fDi Markets (the Financial Times’ foreign investment monitor).

From there, social risk in the top 100 FDI cities was measured using data from Verisk Maplecroft’s [email protected] Social Index​​. The index measures the social risk landscape of 575 different cities across the globe, using three key pillars:

  • Civil and political rights: the right to protest, security force abuses
  • Labor rights: child labor, modern slavery
  • Poverty: portion of population in extreme poverty

After calculating scores based on these three metrics, cities were then grouped into four categories to measure their level of social risk:

  • Low risk
  • Medium risk
  • High risk
  • Extreme risk

Based on this analysis, citizens in 33 of the top 100 cities for FDI (representing $71 billion of inward investment) are at ‘high’ or ‘extreme’ levels of social risk, meaning they face significant threats to their civil, political, and labor rights.

Of the top 100 places, Istanbul and Izmir rank the highest when it comes to overall human rights risks, largely because of labor rights violations and the exploitation of migrant and refugee workers. This is something manufacturers should take note of, especially those who outsource production to these Turkish cities.

In contrast, Beijing, which places third on the list, scores high due to China’s various civil rights issues. Other major manufacturing and commercial hubs in China, like Guangzhou and Shanghai, place high on the list as well.

Overall Social Risk Index

While a third of the top FDI cities are at high or extreme social risk, this figure is even higher when looking at all 575 cities included in the [email protected] Social Index.

social risk score of global cities

Of the 575 cities, 75% are classified as ‘high’ or ‘extreme’ risk. Mogadishu, Somalia is the highest risk city, followed by Damascus, Aleppo, and Homs in Syria, Pyongyang in North Korea, and Sanaa in Yemen.

While the high-risk cities are spread across the globe, it’s worth noting that 240 of the high and extreme risk cities are located in Asia.

Civil and Political Risk Index

In addition to the overall ranking, the report provides insight into specific human rights violations, highlighting which cities are most at risk.

civil rights risk score of global cities

Perhaps unsurprisingly, Pyongyang, North Korea places first on the list when it comes to civil and political rights violations. Under the current North Korean regime, some significant civil rights violations include arbitrary arrests and detentions, the holding of political prisoners and detainees, and a lack of judicial independence.

In addition to North Korea, Syria places high on the civil rights risk index as well, with three of the top five cities located in the war-torn country.

Labor Rights Index

When focusing specifically on labor rights, almost half of the ‘high’ or ‘extreme’ risk cities are in Europe and Central Asia.

labor rights risk score of global cities

The biggest problems across a majority of ‘high’ risk cities include child labor, the exploitation of migrant workers, and modern slavery. Pakistan in particular struggles with child labor issues, with an estimated 3.3 million children in situations of forced labor.

What This Means for Foreign Investors

Understanding a country’s social landscape can help organizations make decisions on where to conduct business, especially those that prioritize ESG efforts.

And, while organizations who invest in ‘high’ risk locations aren’t directly involved in any human rights violations, being associated with a ‘high’ risk city could impact a corporation’s reputation, or cause financial damage down the line.

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