The pandemic has left a global macroeconomic problem, the constant rises in interest rates, inflation and the lack of confidence in the markets and in the banks have generated an unstable state for the dollar. Here we will do a small account of how the dollar has been depreciating over time.
The page of the United States Bureau of Labor Statistics has recently published data in its latest update on consumer prices where, according to the information provided, In April 2023, an average US citizen would have to spend $131.07 to buy the same goods or inputs that they could have bought for $100 in 2013..
The history of the US dollar is one that has seen significant ups and downs in its purchasing power over the years. Since the currency’s creation in 1785, the dollar has undergone dramatic changes in value. Throughout the 19th and 20th centuries, the dollar has gone through periods of stability, inflation, and deflation.which has led to significant fluctuations in their purchasing power.
For most of the 19th century, the dollar maintained a relatively stable purchasing power, with only minor fluctuations in value. However, as the 20th century began, the value of the dollar began to decline. The Great Depression of the 1930s had a significant impact on the purchasing power of the dollar.as inflation skyrocketed and the value of the currency fell sharply.
In the 1940s and 1950s, the dollar regained some of its value, thanks in large part to the end of World War II and the postwar economic boom in the United States. However, in the decades of 1960 and 1970, the value of the dollar decreased once again, this time due to rising inflation and a loss of confidence in the US currency.
At the end of the decade of 1970s and early 1980s, the dollar began to recover its value once again, thanks in large part to the monetary policies of President Ronald Reagan. During the 1990s, the dollar maintained a relatively stable purchasing power, although there were some significant fluctuations in its value.
In the 2000s, the dollar once again experienced a decline in its purchasing power.due in large part to the global economic recession of 2008. Since then, the value of the dollar has fluctuated based on a variety of factors, including government economic policy, changes in international markets, and geopolitical uncertainty.
This means that inflation has increased significantly in the last decade, leading to an increase in the prices of basic products and services throughout the country. Economic experts have been closely monitoring inflation and are concerned about its long-term impact on the economy.
Inflation can have negative effects on the economy, such as decreased purchasing power of consumers and decreased demand for goods and services, which could lead to reduced production and employment. It can also affect investors and savers, as inflation reduces the real value of their money.
The data indicates that inflation 10 years ago was located at 1.6% per year, and for March of this year, interannual inflation is close to 6%, according to the data shown by the web datosmundial.com, a portal that has a history of inflation generated in the United States.
Dollar inflation history – Source: DatosMundial.com
It is important to note that Inflation is not an isolated phenomenon in the United States. Many countries around the world have been experiencing rising consumer prices in recent years. As the global economy continues to recover from the COVID-19 pandemic, inflation may continue to be a relevant issue to consider for the foreseeable future.
To this situation must be added the fact that that countries like Russia, China, Brazil have been closing deals and bilateral agreements with different countries taking other currencies as a reference (like the euro or the yuan), leaving aside the hegemony of the dollar in this type of transaction.
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