Throughout the history of currency, the true value of money has always been changing. Even today, the value of dollar is changing every day.
It is hard to define the value of money, for economists, they may use gold/silver standard to value money; but in order to be closer to everyday life, I will use “milk” as a rule for measuring the purchasing power of money. Milk as an agricultural product, its production does not affect by the improvement of technology very much; there is no good substitutes for milk (no one drinks soy milk); the tastes of consumers toward milk did not change much in the past two hundred years; and clearly, no one expected cows can be milked with more or less milk from the same size cow nipple. So it will be theologically correct to give the conclusion that there was no significant shifting on the supply curve of milk in the past hundred years.
Before 1806, the monetary system used in America was silver standard. In 1806, President Jefferson “kicked out” silver standard from the monetary system and gold standard became the only standard of economic unit of account in United States. At the time of 1900 when the gold standard was first introduced in United States, one dollar equal to 1.5g of gold. However, during World War One, due to the skyrocket spending on military, most countries suspended the gold standard so that they can print as much money as they need. Unsurprisingly, the disconnection between currency and gold caused a great inflation in many countries. In order to keep the value of US dollar and protect the gold reserve, the gold standard was temporarily suspended at July 31, 1914, and it didn’t restore until December, 1914.
On October 24, 1929, the Wall Street Stock market suffered from a sudden fall of share prices on the New York Stock Exchange, the market lost eleven percent of its value. During that weekend, panic spread amount the market, investors lost their faith and decide to pull