The Great Race, to the Devalue Your Money

Remember when a penny could buy a pack of gum? Me neither. But it could, in the '40s.

Today, a pack of gum is over a dollar. Either the gum today is made of space-age material, or that penny somehow lost its value.

But "everyone makes more money today" than they did in the '40s, you say. True, but not after factoring in the devaluation of the dollar. From the '40s to mid-2000s, income doubled in real terms. But since 1971, the dollar lost over 80% of its purchasing power (worse when compared to the '40s).

Don't fret though, it's not just America. We're all in it together!

Gold's purchasing power has done quite well since 1971. Try not to think of it as though gold has increased in value. Instead, think of it as though the dollar has lost a lot of its value and now requires more dollars to buy the same amount of gold.

Source: http://www.financialsensearchive.com/fsu/editorials/dollardaze/2009/0223.html
Source: http://visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/