If you don’t know that SpaceX went public, I am jealous of how you live your life and want to know your secret. For everyone else, a few quick thoughts on the IPO:

1. Warren Buffett famously never participated in IPOs, with his logic being that the people who know the company best are also the ones who get to pick the timing of the transaction.

2. Warren’s folksy wisdom holds up extremely well empirically (though all but 2 made money on the first day):

3. I’m not going to short SpaceX because I like being able to buy food for my family. I’m not going to buy it because they are burning cash faster than I could with a can of gasoline and a blowtorch. It’s ok to sit one out!

The SpaceX IPO made Elon Musk the world’s first trillionaire. This prompted many a joke about how being a trillionaire is nothing special, Zimbabwe minted millions of trillionaires in the 2000s during their hyperinflation.

Obviously the US is not Zimbabwe. Still, it’s good fodder for a thought experiment. Why do we say the Zimbabwe Dollar fell by 99.something percent (where “something” is a long string of 9s) against the USD? Why don’t we say the USD rallied by a gazillion percent? It’s just an exchange rate - who can say whether one side fell or the other side rallied?

The answer is you need a fixed third reference point. The price of bread is a good one, and the “exchange rate” between bread and USD didn’t change much during that period while the exchange rate between bread and the Zimbabwe Dollar changed a lot. So there’s your answer.

If you start the clock at Jan 1, 2000 and look at what are traditionally thought of as exchange rates, you might say the USD traded in a pretty narrow range against major global currencies. It’s down some against the Euro and Yuan, up some against the Pound and Yen. You could be forgiven for saying that the USD hasn’t changed value much.

But if you look at other reference points - other “exchange rates” - such as goods, services, and financial assets, the picture tells a different story. The “Multiple” column below shows how much the price of each thing in USD has changed since the start of the century.

This century the USD lost half it’s value when compared to a loaf of bread, and against everything else on the table it is worse. A college education, health insurance, and a share of Exxon have all maintained a similar exchange rate versus each other, and all have appreciated 3-4x vs the dollar - which again, is pretty flat against other global currencies. Fiat money is melting in front of our eyes. Sorry Elon, but a trillion bucks isn’t worth what it used to be.

But what is it worth? For that, we need another point of reference. When John Rockefeller became the first billionaire in 1916, his wealth was equal to about ~3% of US GDP. Musk’s wealth…is about 3% of US GDP. The exchange rate between “the richest man in the world” and “the world’s largest economy” has barely changed over the last 100 years!