Asking this question from an American perspective. At an average of 2% inflation, an equivalent new car that costs $40,000 today would cost $2,000,000 in 200 years. Assuming matching(ish) wage growth (i.e. a household of two married professionals could still afford a $2M car), what are the government’s options? Let things ride? Print new $1,000 or $10,000 bills? Reissue a *NEW* USD that is worth 0.01% of the old one?
Still on the fence about if humanity will be around long enough to have this problem, but just curious about the options for my great-great-great-great-great-grandkids.
In: 4
Yes. In 1200AD in England an average wage would be about a penny a day in old money or 1/240th of a pound. So a yearly income of about £1.50 (or $2)
So to them everything here would be astronomically expensive. To cope with this we have redefined the penny – so there’s now 100 to the pound, but crucially we changed the coinage. That medieval penny was made of Silver and weighed 1.5g and at today’s silver price thats worth about £1. So we effectively created a new pound worth 100x the old pound.
My parent’s bought their house in 1970 for £3,000 and it would now be worth around £300,000, so 100x inflation apparently doesn’t need redefining the currency. On the other hand, the french did revalue to a new franc in 1960 where each new franc = 100 old francs. https://en.wikipedia.org/wiki/French_franc#New_franc
So whether you end up with new dollars or not seems to be random – you might just get million dollar bills
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