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Comment by thallium205 | Hacker News Reader

The value of the USD still erodes even amidst the many technology advances since then.

Not only that, but I believe the USD is tied to Energy, not Gold. When I was young you could by a lot with just 25 cents. Plus I know people used less energy back then.

But the Oil Embargos hit the US twice in the 70s, during that period inflation spiked and only settled down when the price of Oil stabilized. USD had adjusted to the new prices.

Then in the last 20 years, a few times we had some relativity minor shocks due to OPEC decreasing production among other things. Thus inflation.

People like to point to other things, but to me, our economy is directly tied to the price if energy. And maybe that is why trying to get off of fossil fuels seems almost impossible.

And not counting the price of Energy in our inflation numbers skews our real issues.

How does that square with the US largely energy independent now? With Shale, the US is far less reliant on foreign oil (ala energy).

US is an energy exporter now.

Oil was a big driver of inflation in the 70s, but another factor which tends to be overlooked is population growth: while the US population had been rather stagnant during WW2, the post-WW2 baby boom led to the 70s being filled with the now-adult Baby Boomers entering the workforce and demanding housing, transportation, etc. which really didn't help things. If there was no WW2 (or if there was no baby boom because people kept having kids like normal throughout WW2), inflation would have been much less pronounced during the 70s.

https://russellinvestments.com/us/blog/inflation-pales-to-19...

https://www.epbmacroresearch.com/blog/initial-conditions-for...

The value of the USD, like anything else, depends on the amount of it. If you create a lot of it out of thin air, eventually it's going to be worth less once that money gets into circulation, unless you also created a bunch of goods and services out of thin air so its relative worth (dollars in circulation per good/service in the economy) didn't change.

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