The US dollar lost 40% of its purchasing power between 1990 and 2010. Monetary devaluation differs from inflation: it happens when the money supply grows without matching economic productivity, not from higher production costs. More dollars in circulation means each one is worth less.
Our US dollar is losing value every day. It's known as monetary devaluation. And why should this concern us? Well, according to the US Consumer Price Index, over the 20-year period from 1990 to 2010, the US dollar lost 40% of its value, which means that we need $1.63 today to buy what we bought for only $1 20 years ago. Of course, the government refers to this as inflation. But inflation is actually an increase in the price of products and services that is due to an increase in the cost of productivity, while monetary devaluation is an oversupply of available credit funded by an increase of money in the banking system, but without an equivalent increase in economic productivity. Yes, that sounds a little complicated, so think about it like this: our money, our US dollar, is worth 40% less than it was 20 years ago. But we didn't lose 40% of our money, and we didn't spend 40% of our money. Our money is worth 40% less today simply because there is 40% more
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