Some of you may already be aware of this site (or similar) but I came across an inflation calculator. I don't know how accurate it is, but if it is correct, it brings into perspective some interesting aspects of coin collection. http://www.in2013dollars.com/ (although 2013 is in the name, it calculates up to today) According to the calculator..... $10,000 in 1793 is equivalent to $55,000 today. Since the first mint employees had to post $10,000 bond to work there, this calculation shows how incredibly extravagant that requirement was. A dollar in 1800 was the equivalent to nearly $20 today. So carrying around a gold eagle was the equivalent of having $200 in your pocket change. $20 in 1850 was the equivalent of $600 today. So its doubtful that double eagles circulated in the general populace. More recently, (and working backwards), a $100 today has the buying power of $33 in 1980. So it's getting to the point where a $100 bill today is the $20 bill of when I was growing up.
CPI inflation calculator shows that 10,000 in Jan 1930 is worth $144,247.37 Oct 2017. So I am not sure about that 1793, 55,000 number.
Next thing to so is to compare what $10,000 would buy then vs. what $144,247.37 would buy now. Don't be surprised to find out that the buying power is about equal.
Those number are simply wrong and underestimate inflation: https://www.minneapolisfed.org/community/teaching-aids/cpi-calculator-information
Is it supposed to be $550,000? The dollar has lost over 95% of its spending power since 1913 when the Federal Reserve opened, so 10K to 55K in 215 years is probably off.
Wow I didn't know that Mint employees in 1793 had to put down $10,000. That's a ridiculous amount, even if it's to ensure/insure against theft (I'm assuming that's why they had that bond amount requirement). And, that figure is more ludicrous since that first figure should be closer to a quarter million dollars today.
It was not all employees. Of the top of my head I cannot remember he specific title for those who did but it was only one or two people at a time: basically the top guys.
That's 5.5 times today's value That's 20 times today's value That's 30 times today's value Therefore from 1793 to 1850 a dollar became worth almost 5.5 times more? Somethin don't add up
When our coinage system was created a Half Cent was worth more than today's dime is, and we still can't get rid of the Cent.
As I stated in my original post, I didn't know if the numbers were accurate as I don't know how the calculator was doing its calculations. From the other posts on this thread, I'm thinking now that the calculator is seriously UNDERCALCULATING inflation and the like. I don't pretend to know how all of that stuff is figured. But even if the calculator is seriously low-balling its amounts, its still a safe bet to state that larger denomination coins were not seen/used very often by the average Joe and the original bonds needed by Rittenhouse and Voight (I think those were the two guys) were astronomical in real dollars (which was the overall point of my original post).
The farthest the CPI calculator goes back is Jan 1913, where 10,000 then is worth over $250,000 today. So an earlier post mentioned it just may have been a typo and the actual number from 10,000 in 1793 is $550,000 today and not 55,000.
The value of the dollar was largely stable for the early part of US history, since it was fixed to gold. 1913 saw the Federal Reserve Act that fundamentally changed how the dollar functioned, 1944 greatly enlarged the US dollar's role with the Bretton Woods system, and 1971 saw the termination of the conversion of the US dollar to gold. It was really only in relatively recent times that we'd see the CPI climb so drastically to devalue the dollar. So, the $10K figure back in 1793 should be very similar to the value back in 1913, or about $250,000, maybe a little more.
You are simply wrong about this. Inflation is only partially a function of money supply. Think about the civil war period, when supplies of every day items are being used by the army, being destroyed, or not being made due to the shortage of labor. What do you think happened to the price of food? https://www.minneapolisfed.org/comm...culator-information/consumer-price-index-1800 To the OP, I assume that calculator takes an arithmetic mean of inflation over the time period you put in, then converts the value. It's a common mistake, but they need to create a logarithmic mean instead.
Supply and demand and the consequent prices of goods, and the buying power of the dollar aren't necessarily one and the same. Of course recessions, depressions, war time spending, etc. will affect money supply. My statement was not meant to be a general claim, but rather a claim based specifically on the US economy's historical performance. When you look at the larger picture of how strong the dollar is today from a given point in history, the pre-1913 dollar was largely stable. From the Bureau of Labor Statistics:
I’d rather see the graph in post #14 with a log scale on the y-axis. The CPI has roughly doubled over the last 28 years, but on a linear scale that looks like a much bigger event than, say, the WWI years, though prices nearly doubled then, and much more quickly. Not that this totally undermines the point iPen is making.
It doesn't totally undermine the point, but it does highlight the issue of arithmetic thinking applied to multiplicative processes, which is exactly the issue I suspect is causing the problems with the website in OP's post.
