What has your dollar lost?
Pick an amount and a year: a first paycheck, a house price, what a loaf of bread cost. See what it buys today, and what it would be worth if it had been kept in gold or silver instead.
What one dollar buys, 1913 to today
Looking ahead: what will it cost?
Inflation compounds: each year's rise is on top of the last one's, so 3% a year for five years is more than 15%. Try a rate and see.
An illustration, not a forecast: nobody knows what inflation will be, and it is never the same two years running. Not financial advice.
Using it in class
Ask everyone for one number they remember: a first paycheck, a first car, the price of a gallon of gas or a movie ticket when they were young. Put each one in and read the first line aloud. Then ask: who decided your savings should shrink like that, and who got the difference? That's the Cantillon question from week five.
For the forward question (“if prices go up 3% a year, is that 15% over five years?”), use Looking ahead. Do the simple sum on the board first, then show the compounded answer. The gap is small at first and grows every year: that's how a bag with holes leaks.
Haggai 1:6 fits here: “he that earneth wages earneth wages to put it into a bag with holes.” The gold and silver cards show the same savings in money nobody can print.
How it's worked out
Buying power uses the government's own Consumer Price Index (CPI-U, from the Bureau of Labor Statistics): the year's average, compared with the latest month. Gold and silver use the year's average price per ounce from the World Bank; before 1960 the gold figure is the official price the dollar was defined by ($20.67 an ounce until 1934, then $35). Silver starts in 1960. These are history, not a forecast, and not financial advice.
Looking ahead multiplies the price by (1 + the rate) once for each year. The buying power lost is 1 − 1 ÷ (1 + rate)years: the share of today's dollar that's gone by then. The “recent average” button is the yearly average rise in the same CPI over the last ten full years.
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