Purchasing power measures how much a unit of currency can buy in terms of real goods and services. When prices rise (inflation), purchasing power declines.
Purchasing Power Over Time
| Year | $100 Equivalent (2024 dollars) |
|---|---|
| 1924 | ~$1,800 |
| 1974 | ~$620 |
| 2004 | ~$165 |
| 2014 | ~$130 |
| 2024 | $100 |
Gold Preserves Purchasing Power
In 1920, one ounce of gold ($20.67) could buy a fine men’s suit. Today, one ounce of gold ($2,500+) can still buy a fine men’s suit — and then some. Gold has maintained its purchasing power for over a century while the dollar has lost 96% of its value.