The shrinking dollar: what $100 in 1913 is worth today

A century of the dollar losing ground

Inflation feels abstract until you compound it. A few percent a year sounds harmless, but stack 113 years of it and the dollar loses roughly 97% of its purchasing power. The curve above is the same CPI that sits behind the inflation calculator, plotted as the running cost of a fixed 1913 basket. It is nearly flat for decades, then bends up hard: the two world wars, the 1970s oil shocks and the early-1980s peak did most of the damage, when double-digit inflation compounded on itself.

The part people forget is that prices used to fall, and hard. In 1921 the index dropped 10.5%, and the early 1930s brought three straight years of deflation as the Depression crushed demand. Falling prices sound good until you remember they usually come with mass unemployment. Since the war the pattern has been one-directional: prices rise most years, occasionally fast, and the long-run job of a saver has been to outrun the erosion rather than avoid it.

A caveat worth stating. The CPI tracks a fixed basket, and what people actually buy changes, so no single index captures every household's experience; your own inflation depends on rent, fuel and the things you spend the most on. Treat these figures as the official yardstick, not a personal one. To run your own numbers, use the inflation calculator or check whether a raise kept up with the real wage calculator.