{"format":"alysly-page/1","url":"https://alysly.com/research/paper-money-and-inflation/","json":"https://alysly.com/json/research/paper-money-and-inflation/index.json","lang":"en-US","title":"Purchasing Power of the Euro Since 1999: Inflation and Savers","description":"€100 from 1999 buys what €57.50 bought back then. Our data on inflation, overnight rates and house prices since 1999, and how the gold standard ended.","published":"2026-11-12T00:00:00Z","modified":"2026-11-13T16:06:51+01:00","alternates":[{"lang":"de-DE","url":"https://alysly.com/de/research/papiergeld-und-inflation/","json":"https://alysly.com/json/de/research/papiergeld-und-inflation/index.json"}],"about":"Machine-readable version of the page at url. It contains the text, tables and key figures published there, but not the interactive charts and tools.","breadcrumb":[{"name":"Research","url":"https://alysly.com/research/"},{"name":"Paper Money and Inflation: What €100 From 1999 Is Worth Today","url":"https://alysly.com/research/paper-money-and-inflation/"}],"content":[{"type":"heading","level":1,"text":"Paper Money and Inflation: What €100 From 1999 Is Worth Today"},{"type":"paragraph","text":"By Alexander Bock, founder and data analyst","links":[{"text":"Alexander Bock","href":"https://alysly.com/about/"}]},{"type":"image","src":"https://alysly.com/research-img/paper-money-and-inflation-photo.webp","alt":"Paper Money and Inflation: What €100 From 1999 Is Worth Today"},{"type":"paragraph","text":"Photo: Pratikxox / Pexels","links":[{"text":"Pratikxox","href":"https://www.pexels.com/@pratikxox-1643052"},{"text":"Pexels","href":"https://www.pexels.com/photo/collection-of-banknotes-with-dollar-bill-on-top-4025825/"}]},{"type":"paragraph","text":"The United States stopped exchanging dollars for gold in August 1971, and the major currencies have floated freely since 1973. What money is worth now depends on central bank policy. Our own series on consumer prices, overnight deposit rates and house prices show what this has meant for cash and savings in Germany since 1999."},{"type":"paragraph","text":"Key finding as of Aug 31, 2026: €57.50 (is what €100 from August 1999 buys in August 2026)."},{"type":"list","ordered":false,"items":["€57.50 is what €100 from August 1999 buys in August 2026","2.1% average yearly inflation in Germany since 1999","2 of 27 years with inflation above 5%: 2022 and 2023","€70.73 purchasing power of €100 kept in an overnight account since January 2000"]},{"type":"heading","level":2,"id":"from-gold-receipts-to-banknotes","text":"From Gold Receipts to Banknotes"},{"type":"paragraph","text":"Paper money started out as a receipt. In 17th-century London, goldsmiths stored their customers’ gold and issued notes for it. Paying with a note was easier than paying with metal, so the receipts soon changed hands as money. They became banknotes that the issuing bank had to redeem in gold on demand."},{"type":"paragraph","text":"Under the classical gold standard, roughly from 1870 to 1914, this rule applied in the major economies. The amount of banknotes was tied to the gold reserves of central banks. Over long periods, prices stayed stable on average, and average inflation was close to zero."},{"type":"paragraph","text":"From year to year, prices swung more than they do today. In Britain and the United States, they fell for about two decades, from the 1870s into the 1890s. That was costly for borrowers, because the real burden of their debt grew every year. Banking crises were more frequent than in the decades after World War II."},{"type":"heading","level":2,"id":"the-gold-standard-in-the-great-depression","text":"The Gold Standard in the Great Depression"},{"type":"paragraph","text":"The Great Depression of the 1930s showed the downside. Central banks had to defend their gold reserves, so they could do little to support the economy with cheaper money. Countries that left the gold standard earlier generally recovered earlier. Britain left in 1931. The United States banned private ownership of gold coins and bars in 1933. A year later, it devalued the dollar from $20.67 to $35 an ounce."},{"type":"heading","level":2,"id":"bretton-woods-and-the-end-of-the-gold-link","text":"Bretton Woods and the End of the Gold Link"},{"type":"paragraph","text":"In 1944, while World War II was still going on, 44 countries agreed at Bretton Woods on a system of fixed exchange rates for the postwar period. Currencies were tied to the dollar, and the dollar was tied to gold at $35 an ounce. Only central banks and governments of other countries could exchange dollars for gold, not private individuals."},{"type":"paragraph","text":"By the 1960s, foreigners held more dollars than the United States had gold. France converted large dollar holdings into gold from 1965 onward. In the summer of 1971, billions of dollars flowed out again. On Sunday, August 15, 1971, President Nixon announced on television that the United States would “temporarily” suspend the conversion of dollars into gold. The same package included a 90-day freeze on wages and prices and a 10% surcharge on imports."},{"type":"paragraph","text":"The temporary step became permanent. In the Smithsonian Agreement of December 1971, the major industrial countries set new exchange rates, and the official gold price rose to $38 an ounce. A second devaluation followed in February 1973, to $42.22. In March 1973, the major currencies gave up fixed rates. Since then, exchange rates have been set by the market. No central bank redeems its money in gold anymore."},{"type":"heading","level":2,"id":"what-money-is-worth-today","text":"What Money Is Worth Today"},{"type":"paragraph","text":"Money without a gold link is not worthless. Central banks still hold gold and foreign currency. Whether the euro and the dollar keep their value now depends on monetary policy, above all on interest rates. The European Central Bank aims for inflation of 2% over the medium term. Price data for Germany show how close it has come."},{"type":"heading","level":2,"id":"inflation-since-1999","text":"Inflation Since 1999"},{"type":"paragraph","text":"Since the euro was introduced in 1999, inflation in Germany was above 5% in only two years: 8.6% in 2022 and 6.1% in 2023. The trigger was the jump in energy prices in 2022. The lowest rate was 0.2% in 2009. There was no full year of falling prices."},{"type":"paragraph","text":"Loading figure …"},{"type":"paragraph","text":"Inflation in Germany by calendar year since 1999."},{"type":"paragraph","text":"That still adds up, because each year’s price increase builds on the one before. On average, prices rose by 2.07% a year. After 27 years, money has lost 42.5% of its purchasing power. A €100 note from August 1999 bought only as much in August 2026 as €57.50 did back then."},{"type":"paragraph","text":"Even the central bank’s inflation target means a loss for cash. At 2% a year, the same amount buys almost a fifth less after ten years."},{"type":"heading","level":2,"id":"overnight-deposits-after-inflation","text":"Overnight Deposits After Inflation"},{"type":"paragraph","text":"Overnight deposit accounts have paid 0.72% interest a year on average since 2000. Inflation over the same period averaged 2.08%. €100 deposited in January 2000 at the average market rate grew to €121.03 by August 2026. Measured in January 2000 purchasing power, that was €70.73. Kept as cash in a drawer, it would have been €58.44."},{"type":"paragraph","text":"Loading figure …"},{"type":"paragraph","text":"€100 since January 2000: overnight deposit in nominal terms and in purchasing power, cash in purchasing power."},{"type":"paragraph","text":"After the financial crisis, overnight rates fell toward zero and stayed there until 2022. Prices kept rising during that time. Money left in an account lost purchasing power almost without a break. Rates rose again from 2023 but stayed below inflation."},{"type":"heading","level":2,"id":"who-gets-new-money-first","text":"Who Gets New Money First"},{"type":"paragraph","text":"New money does not reach everyone at the same time. The Irish-French banker Richard Cantillon described this around 1730 in his “Essai sur la nature du commerce en général.” He observed that new money first has an effect where it enters the economy. Those who receive it early still buy at old prices. Those who receive it late already pay higher ones. Economists today call this the Cantillon effect."},{"type":"paragraph","text":"Research agrees that monetary policy affects incomes and wealth unevenly. How large the effect is, and in which direction it works overall, is still debated. Low interest rates lift the prices of stocks and real estate, for example. They also support jobs and wages."},{"type":"heading","level":2,"id":"house-prices-and-consumer-prices","text":"House Prices and Consumer Prices"},{"type":"paragraph","text":"Residential property and consumer prices show how differently prices can rise. Until 2010, house prices in Germany barely moved, while consumer prices rose by 9%. From 2011 they picked up, and they overtook consumer prices around 2015. By mid-2022 they had almost doubled compared with 2005."},{"type":"paragraph","text":"Loading figure …"},{"type":"paragraph","text":"Residential property prices and consumer prices in Germany, first quarter of 2005 = 100."},{"type":"paragraph","text":"As interest rates rose, the index fell by 13% from the second quarter of 2022 to the first quarter of 2024. In the second quarter of 2026 it stood 82% above its 2005 level, consumer prices 59%. Besides interest rates, house prices depend on population, land and building costs. A price index also does not measure returns. Purchase costs, upkeep and financing are missing. And a single house can move quite differently from the average."},{"type":"heading","level":2,"id":"putting-it-in-context","text":"Putting It in Context"},{"type":"paragraph","text":"Under the gold standard, prices swung sharply from year to year but stayed stable on average over decades. Since 1999 they have risen more calmly, but every year. Under these conditions, cash loses value by design, and overnight deposits lose it somewhat more slowly. When comparing investments, the return after inflation is what counts."},{"type":"heading","level":2,"id":"method","text":"Data and Method"},{"type":"list","ordered":false,"items":["Inflation: the Harmonized Index of Consumer Prices (HICP) for Germany from Eurostat, year-on-year rates for every month from January 1999 to August 2026. The price level is built by chaining these rates, with the twelve months of 1999 as the base. Purchasing power is its inverse.","Inflation per calendar year: the mean of its twelve year-on-year rates. The average over the whole period (2.07%) is the geometric mean of the price level from August 1999 to August 2026.","Overnight deposits: the ECB interest rate statistics for overnight deposits of households in Germany, January 2000 to August 2026, credited monthly, before tax. Individual offers were at times much higher.","House prices: Eurostat’s residential property price index for Germany, quarterly from the first quarter of 2005 to the second quarter of 2026, both series set to 100 in the first quarter of 2005. The index measures prices, not rents or costs.","The historical account relies on primary sources: the Bretton Woods agreement (1944), President Nixon’s televised address of August 15, 1971, and the International Monetary Fund’s records on the end of fixed exchange rates (1973). All figures as of August 31, 2026."]},{"type":"paragraph","text":"Every figure comes from our own price database and is produced by a script in the repository. Running it again with the same cutoff date returns the same numbers. Not investment advice."},{"type":"heading","level":2,"text":"Further Reading"},{"type":"list","ordered":false,"items":[{"text":"How Banks Create Money where new money comes from and what a loan costs","links":[{"text":"How Banks Create Money","href":"https://alysly.com/research/how-banks-create-money/"}]},{"text":"Living Off Your Returns why only the return after inflation counts","links":[{"text":"Living Off Your Returns","href":"https://alysly.com/research/living-off-returns/"}]}]},{"type":"paragraph","text":"Embed this chart"},{"type":"paragraph","text":"The chart may be embedded with a visible source credit and a link to this page. 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Built on data we collect and keep current.","email":"mail@alysly.com","contactPoint":{"@type":"ContactPoint","contactType":"customer support","email":"mail@alysly.com","availableLanguage":["de","en"]},"address":{"@type":"PostalAddress","addressLocality":"Haltern am See","postalCode":"45721","addressCountry":"DE"},"founder":{"@id":"https://alysly.com/#founder"},"sameAs":["https://www.linkedin.com/company/alyslycom/","https://www.youtube.com/@alyslycom","https://x.com/alyslycom"],"publishingPrinciples":"https://alysly.com/methodology/","correctionsPolicy":"https://alysly.com/corrections/"},{"@type":"Person","@id":"https://alysly.com/#founder","name":"Alexander Bock","jobTitle":"Founder and data analyst","url":"https://alysly.com/about/","sameAs":["https://www.linkedin.com/in/abxk/"]},{"@type":"WebSite","@id":"https://alysly.com/#site","url":"https://alysly.com/","name":"Alysly","inLanguage":["de-DE","en-US"],"publisher":{"@id":"https://alysly.com/#org"}},{"@type":"WebPage","@id":"https://alysly.com/research/paper-money-and-inflation/#webpage","url":"https://alysly.com/research/paper-money-and-inflation/","name":"Paper Money and Inflation: What €100 From 1999 Is Worth Today – Alysly","description":"€100 from 1999 buys what €57.50 bought back then. 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