So I come home from work last night and my daughter tells me she's learning about inflation back during the colonial era and she's got to define the word inflation. She says it is sometimes difficult in class to know when to give the "school" answer or the "Dad" answer. But in this case, since the subject is so important, she says she's always going with the "Dad" answer (this girl knows what side of her bread to butter). She wasn't sure her teacher was real happy with her answer as (she tells me) the "school" answer is when it keeps taking more and more money to buy the same items or that prices keep going up vs the "Dad" answer about the whole government printing press problem of creating more and more dollars from nothing backed by nothing.
I thought maybe she might have been a little to vigorous with her 7th grade answer so I did the math in a way she could explain and . . . well, the way I would teach it to her instructors and classmates:
1933 was the last year a $10 Indian Head gold coin was minted into circulation. It had about .48375 troy oz of gold or put another way you could get .48375 troy oz of gold for $10. On 1/13/15 you can buy .48375 troy oz gold valued at around $595.10.
The Inflation math goes like this, $10/$595.1= $0.0168 or today's dollar is now worth $0.0168 compared to the 1933 dollar based on the price of gold or an inflation induced decrease in the value of the dollar of over 98%! Gold not becoming more valuable but the dollar worth-less.
Here is the good part . . . wait for it . . .
U. S. Dollar value = 1.68 cents
Copper cent value = 1.78 cents based on 1/13/15 price of copper (and other metal,) making a copper penny now more valuable than the dollar.