How Much Has the Fed Devalued Our Money?

Thanks to money printing and credit expansion, the Federal Reserve has significantly devalued the dollar.

Devaluation is a inherent feature of fiat currency. Since it isn't backed by anything, the Fed can create new dollars on a whim (inflation). The more dollars it creates, the less each individual dollar is worth.

President Richard Nixon severed the dollar from its last connection to the gold standard in 1971 making it a pure fiat currency.

When he announced the closing of the gold window, Nixon said, “Let me lay to rest the bugaboo of what is called devaluation,” and promised, “your dollar will be worth just as much as it is today.”

This was a lie.

The dollar has lost more than 85% of its value since Nixon’s fateful decision, based on the CPI calculator. The purchasing power of a 1971 dollar is equal to about 13 cents today.

Meanwhile, the dollar value of gold has gone from $35 an ounce to around $1,900 an ounce today. In percentage terms, that’s a 5,329% increase.