Why Does Everything Cost More?

Your grandparents raised a family of five on a factory worker's salary. Your parents bought a house on a single income. You may have a college degree and two incomes in the house, and still feel like the month ends before the money does. Something changed between their lives and yours, and it was not your discipline.

Most people describe the change the same way: prices keep going up. That is what it looks like from the checkout line. But when you lay a hundred years of prices next to each other, a different picture comes out, and it has less to do with the eggs than with the thing we use to price them.

Start With the Things You Actually Buy

In 1970 a gallon of gas cost 36 cents. At the federal minimum wage, that was about 13 minutes of work. In 2024 a gallon averaged $3.50, which is 29 minutes at today's federal minimum wage: more than twice as much of your life for the same gallon.¹ A dozen eggs cost 61 cents in 1970 and $3.20 in 2024. During the 2023 spike they reached $4.82, about 40 minutes of minimum-wage labor for one carton.²

Housing tells the same story in bigger numbers. In 1970 the median home cost about 2.6 years of median household income. In 2024 it cost 5.0 years.³ A family then could plan to pay off a house on one paycheck. A family now signs for thirty years on two.

The Chart Nobody Reads the Right Way

The Bureau of Labor Statistics has tracked consumer prices since 1913. By its own measure, a dollar from 1913 buys about three cents' worth of what it bought when it was printed.⁴ That is a 97 percent loss of purchasing power, and it is the government's number, not a critic's.

We usually read that chart as "prices rose." Read it the other way and it says something sharper: the dollar shrank. Those are not the same claim. If prices rose because eggs became harder to produce, the eggs changed. If prices rose because each dollar represents a smaller slice of the economy than it used to, the eggs stayed the same and the measuring unit changed underneath them.

Imagine a ruler that lost one percent of its length every year for a hundred and eleven years. Every table, door, and floorboard built before would measure larger today than the day it was made. Nothing would have grown. The ruler would simply be lying to you, a little more each year.

Check It Against a Second Ruler

There is a way to test whether the goods changed or the ruler did: measure the same goods with something that cannot be printed. Gold works for this because its supply grows only as fast as miners can pull it out of the ground, about 1.5 to 2 percent a year.⁵ Geology sets that rate, not a committee.

Here is the same century, priced both ways, using 2024 annual averages.

In dollars, oil is up about 8,000 percent. In gold, it is 36 percent cheaper. In dollars, the median home is up more than 16,000 percent, which means it takes 168 times as many dollars to buy one. In gold, it is up 32 percent across 111 years, a modest rise that fits real pressures like population growth and limited land.⁶

Same world, same goods, two rulers. One of them says everything exploded in price. The other says a house costs about what a house has always cost. Only one of those rulers can be extended by decision.

Why the Ruler Shrinks

Until 1971 the dollar was tied to gold at a fixed rate, which limited how many dollars could be created. In August of that year the tie was cut, and the dollar became what economists call fiat currency: money whose supply is set by policy. The steepest part of the dollar's decline comes after that date.

The clearest recent example is 2020. It took more than two centuries for the supply of dollars to reach about $15.4 trillion. Over the following two years it grew by roughly 40 percent, passing $21 trillion by 2022.⁷ When that many new dollars chase the same goods, each one buys less. Official inflation peaked at 9.1 percent in 2022, and most households would say the grocery store felt worse than that.

Economists disagree about whether this is a problem. One school holds that mild, steady inflation keeps an economy moving and gives governments room to respond in a crisis. Another holds that it quietly moves wealth from people who save to people who borrow, and from those who receive new money last to those who receive it first. You do not have to pick a school to see the arithmetic: $10,000 set aside in 2010 bought about $6,900 worth of goods by 2024. Nobody spent it. It was simply measured with a shorter ruler.

An Old Name for It

"A false balance is an abomination to the Lord, but a just weight is his delight."

Proverbs 11:1

The people who wrote that had never heard of a central bank. They did know what a rigged scale does to a marketplace. It cheats the buyer on every purchase, and it does so quietly enough that most buyers blame themselves. A measuring tool that changes without telling you works against everyone who trusts it.

What to Do With This

None of this tells you what to buy. It tells you what question to ask. If you have been working harder and falling behind, the first thing worth understanding is that the unit your wages, savings, and prices are counted in has been getting smaller the whole time. Once you can see that, the next question comes naturally: what would money look like if nobody could make more of it by decision?

That question is where the free first lesson of the course goes next, including what gold got right for five thousand years and why it stopped being enough.