The dollar has lost 97 percent of its purchasing power since 1913

Since the Federal Reserve was founded in 1913, the dollar has been steadily eroded. We take a look at what’s happened – and how gold has fared over the same period.

A dollar isn’t a dollar anymore

In 1913, the American central bank, the Federal Reserve, was established. The idea was to create a more stable economy. But since then, the dollar’s value has fallen year after year.

According to the US Bureau of Labor Statistics, the dollar has lost around 97 percent of its purchasing power since 1913. Put simply: something that cost three dollars back then costs about a hundred dollars today.

This isn’t a new phenomenon, but the numbers have received extra attention lately after spreading widely on social media, including in a thread on X that pointed to exactly this statistic.

Key milestones in the dollar’s history

• 1913 – The Federal Reserve is established, the long-term decline begins
• 1929–1933 – purchasing power temporarily rises during the Depression’s deflation
• 1971 – The US abandons the gold standard entirely
• 1970s – oil crises and high inflation rapidly erode the dollar’s value
• 2022 – inflation reaches 8 percent, one of the sharpest declines in decades

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Why does money lose value?

In short: more money in circulation makes each individual dollar worth less. Until 1971, the dollar was tied to gold, which set a limit on how much money could be printed. When Nixon abolished that link in 1971, that limit disappeared. Since then, the dollar has lost a further roughly 87 percent of its purchasing power.

Gold went the other way

While the dollar has kept falling, gold has developed in the opposite direction. After the gold price was allowed to float freely in 1971, it rose from 35 dollars per ounce to 850 dollars in 1980 – an increase of over 2,300 percent in less than ten years.

That trend has continued since then, albeit more unevenly. Today, in September 2026, gold is trading at around 4,300 dollars per ounce, far above previous record levels. The reason is simple: gold cannot be created in unlimited quantities, unlike money.

What does this mean for you?

You don’t need to worry about the dollar in your everyday finances if you save in kronor. But the principle applies to all currencies, including the Swedish krona: money loses value over time through inflation.

That’s one of the reasons why many choose to complement their savings with physical gold – an asset that has historically held its value, regardless of which currency it’s measured in.

At Tavex, you’ll find gold bars and gold coins in a range of sizes, whether you’re taking your first steps as a gold investor or already hold gold as part of your long-term savings. See our range here.