For example at 3% inflation, 19 dollars 100 years from now will be worth about 1 dollar today. So spending a hundred bucks on a cup of coffee would be possible if inflation just keep happening. Will the government ever reinvent currency to “reset” the clock or will we just have to begin printing 1000 dollar bills?
In: Economics
They could, but why would they need to do it? The value of your cup of coffee stay the same, the 1 dollar today would be the same value as the 19 dollar in the future. That cup of coffee used to cost 16 cent 100 years ago and now would cost 1.81$ today. Do you feel the need to reset the close so that the cup of coffee cost your 16 cent? Of course that would mean that the median income in the US would be 4,900 USD per year, meaning that it would take just as time at work to pay that same cup of coffee. Is it really important to ”reset” the currency, or people in the future will just be fine with a 1,000 USD bill and will find weird that people in the past pay stuff for 1$, just like we find it weird that people in the past used to pay stuff for a couple of cents.
The Japanese Yen smallest bill is 1,000 Yen and their smallest coin is 1 Yen. They don’t have a currency for smaller quantity than 1 Yen, they don’t have cents like we do with the dollar. That doesn’t create problems for the Japanese, it’s just normal for them.
There used to be a half cent coin in the US, they got rid of it eventually. In Canada we no longer have the 1 cents coin and everything is fine.
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