That’s Inflation For Ya!

The same dollar, twenty-one years apart

The Billion Dollar Homepage: That’s Inflation for Ya!

In 2005, the Million Dollar Homepage sold pixels for $1 each.

In 2026, the Billion Dollar Homepage is doing exactly the same thing.

One pixel.

One dollar.

Same price.

Very different dollar.

That is where this gets interesting.

If Alex had simply indexed his original $1 pixel to US consumer inflation, that pixel would cost about $1.72 today. A $100 minimum block would be about $172. And the original $1 million target would be roughly $1.715 million in 2026 purchasing-power terms. (Bureau of Labor Statistics)

Which raises an obvious question.

Why on earth am I still charging $1?

Partly nostalgia.

Partly simplicity.

And partly because calling this the “$1.715 Million Homepage” would have been commercially disastrous.

So we went the other way.

We added three zeroes to the ambition and none to the starting price.

That’s inflation for ya.

Same pixel, weaker dollar

The US Consumer Price Index for All Urban Consumers was 195.3 on an annual-average basis in 2005. By August 2026, the index had reached 334.980. (Bureau of Labor Statistics)

That works out at roughly 71.5% cumulative consumer-price inflation.

Put another way, the purchasing power of a 2026 dollar is only about 58% of what a 2005 dollar bought on this CPI comparison.

So when Alex sold a pixel for $1 in 2005, he was effectively charging about $1.72 in today’s money.

We’re still charging $1.

In real terms, the starting price of a BDH pixel is therefore about 42% cheaper than the original.

Somewhere, a SaaS pricing consultant has just spilled their coffee.

Here’s the simplest way to look at it:

• 2005: $1 buys what $1 bought.
• 2026: $1 buys about 58 cents’ worth of 2005 stuff.
• The BDH pixel: still $1.

That is the basic inflation story.

But CPI only tells part of it.

Because once you start looking at wages, houses, cash, money supply and assets, the last 21 years become much more interesting.

Britain hasn’t exactly escaped either

As a Brit, I had to check the UK numbers too.

The UK Consumer Prices Index stood at 78.1 in 2005.

By July 2026 it had reached 142.9. (Office for National Statistics)

That is roughly an 83% increase.

So £1 of 2005 purchasing power is equivalent to about £1.83 today by that measure.

The precise experience differs between countries, of course, but the broad direction is familiar.

Over long enough periods, the nominal unit remains the same while what it buys quietly changes underneath it.

A pound is still called a pound.

A dollar is still called a dollar.

The label stays put.

The buying power doesn’t.

Inflation and currency debasement are not the same thing

This is where internet discussions about money often become a little too enthusiastic.

Inflation and currency debasement are related ideas, but they are not identical.

Inflation is about changes in prices.

Currency debasement, in a modern fiat-money context, is usually used more broadly to describe the decline in a currency’s purchasing power, often alongside expansion of the money supply.

You cannot simply say:

“Money supply rose 200%, therefore prices should rise 200%.”

Economies do not work that neatly.

Money can sit in deposits.

It can flow into assets.

Banks can expand or contract credit.

Productivity changes.

Global trade changes.

Population changes.

Money velocity changes.

People save more or less.

So the relationship between money supply and consumer prices is real, but not one-for-one.

That distinction matters because the money-supply numbers since 2005 are enormous.

The money supply grew much faster than CPI

US M2 was about $6.69 trillion in December 2005.

By July 2026 it stood at approximately $23.22 trillion. (FRED)

That is an increase of roughly 247%.

In other words, the broad M2 money stock is about three and a half times its late-2005 level.

Compare that with consumer prices rising about 72%.

Those two numbers are clearly not the same thing.

And that is precisely why the topic is more interesting than a meme about money printers.

Some of the difference shows up in a larger economy.

Some in asset prices.

Some in financial markets.

Some in bank deposits.

Some in credit.

Some in higher nominal wages.

Some in the way modern economies absorb money.

But the scale change is undeniable.

In 2005:

M2: about $6.7 trillion

In 2026:

M2: about $23.2 trillion

That is quite a lot of extra dollars competing for attention.

Even the pile of physical cash got much bigger

The increase is not just sitting invisibly in banking databases.

The value of US currency in circulation was around $758.8 billion at the end of 2005.

By the end of 2025 it was about $2.395 trillion. (FRED)

That is an increase of roughly 216%.

And the humble $1 bill has multiplied too.

There were around 8.8 billion $1 notes in circulation in 2005.

By 2025, that figure had risen to about 15.2 billion. (FRED)

So there are far more dollar bills around than there were when the original Million Dollar Homepage launched.

Apparently none of them were assigned to pay my electricity bill.

Typical.

But wages complicate the doom story

Now for a number that gets in the way of a nice simple argument.

Average hourly earnings for US private-sector production and nonsupervisory employees were about $15.90 in early 2005.

By August 2026 they were about $32.53. (FRED)

That is an increase of roughly 105%.

Which means this particular national wage series rose faster than CPI over the period.

So the common line that “prices doubled while wages went nowhere” is not accurate when applied to this measure.

Reality is messier.

Different occupations experienced different outcomes.

Different parts of the country did too.

Someone who bought a house and invested for 20 years had a very different experience from someone who rented, held cash and watched housing move away from them.

Averages are useful.

They are also very good at hiding individual misery.

Then try buying a house

Housing illustrates that problem nicely.

The S&P Cotality Case-Shiller US National Home Price Index stood at 175.924 in August 2005.

By June 2026 it had reached 336.663. (FRED)

That is an increase of about 91%.

So national home prices, by this index, rose substantially faster than consumer prices.

That matters because housing is not some abstract line in an economics textbook.

It is where people live.

If you were already a homeowner, rising prices may have made you feel wealthier.

If you were trying to buy your first home, exactly the same price movement may have made you feel poorer.

Same economy.

Completely different lived experience.

This is why “inflation” is not one universal feeling.

It depends on what you need to buy and what you already own.

Petrol gives us another very human comparison

Regular petrol in the US averaged about $2.27 per gallon across 2005.

By early September 2026, the national price was about $4.16 per gallon. (U.S. Energy Information Administration)

That is roughly an 83% increase.

Interestingly, that’s not miles away from the broad UK CPI increase over the same period.

But nobody standing beside a petrol pump thinks:

“How reassuring, this appears directionally consistent with long-term monetary aggregates.”

They think:

“How much?”

That is the difference between economic data and lived economics.

Then there is gold

Gold offers a very different lens because it is priced in dollars but is also widely treated as a store of value.

By September 2026, spot gold was trading above $4,000 an ounce, with Reuters reporting around $4,292 on 14 September. (Reuters)

The point here is not that gold provides a perfect inflation measure.

It doesn’t.

Gold moves for many reasons, including interest rates, geopolitics, investor demand, central-bank activity and risk sentiment.

But it is useful because it reminds us that the dollar can be measured against far more than supermarket goods.

And depending on what you compare it with, its long-term loss of purchasing power can look very different.

The stock market is at an all-time high. In dollars.

The S&P 500 closed at 7,619.94 on 14 September 2026. In dollar terms, that is close to record territory.

But the phrase “all-time high” quietly assumes the dollar is the yardstick.

Change the yardstick and the picture changes.

Take gold.

On the same day, spot gold was about $4,312 an ounce.

That means the S&P 500 was worth roughly:

1.77 ounces of gold

Now go back to the beginning of 2005.

The S&P 500 was around 1,181.

Gold was roughly in the $430 to $450 an ounce range at the time.

So the S&P 500 was worth somewhere around:

2.6 to 2.7 ounces of gold

That’s the part that catches people out.

Measured in dollars, the S&P 500 has risen enormously.

Measured in gold, it is actually lower than it was around the time the Million Dollar Homepage launched.

Same stock market.

Completely different chart.

The only thing we changed was the unit of account.

And once you notice that, “all-time high” becomes a much more interesting phrase.

It does not mean the stock market has not created real wealth. Dividends matter. Businesses have grown. Productivity has improved. Companies generate profits and cash flow.

But it does remind us that every price is a ratio.

The S&P isn’t simply “7,600”.

It is:

7,600 dollars.

Or 1.77 ounces of gold.

Or some other quantity of whatever you choose to measure it against.

That distinction matters when the measuring stick itself is changing.

There is another philosophical difference too.

A dollar is part of a debt-based fiat monetary system. It is ultimately a financial claim within that system.

Gold is different.

A physical ounce of gold has no issuer, no borrower and no counterparty who has to make good on it. Whether you call that “money”, a monetary asset or simply an ancient store of value depends on your economic persuasion, but it is fundamentally different from a dollar.

And that is why this comparison can be so mind-bending the first time you see it.

The television says:

Stock market at all-time highs.

The gold chart says:

Not so fast.

Both statements can be true.

That is not a contradiction.

It is a reminder to ask:

High compared with what?

The first trillion took a very long time

Large numbers are another part of this story.

The US federal debt first crossed $1 trillion in 1981.

In 2026, it passed $40 trillion. Reuters has recently reported on the fiscal pressure associated with that level of debt and rising borrowing costs. (Reuters)

That shift fascinates me almost as much as inflation itself.

When I was young, a million dollars sounded enormous.

Billionaires were exotic.

Trillions barely entered ordinary conversation.

Now we casually discuss:

$1 trillion companies.

$10 trillion markets.

$40 trillion national debt.

Hundreds of billions spent on infrastructure.

Billions raised by startups.

The numbers got bigger so gradually that we stopped noticing how strange they are.

Maybe one day we’ll all be billionaires.

Not because we’ve all become fabulously rich.

Because a sandwich costs $18,000.

That is a joke.

I hope.

The 2005 million isn't our million

The Million Dollar Homepage did slightly better than its name suggested.

Its final reported gross was $1,037,100.

But even if we just take the round $1 million target, the CPI comparison says that $1 million of 2005 purchasing power is roughly $1.715 million today. (Bureau of Labor Statistics)

So technically, Alex built something closer to a modern $1.7 Million Homepage.

Which sounds dreadful.

And this gets to something I find interesting about wealth language.

“Millionaire” once described extraordinary wealth.

Today, depending on where you live and what assets you include, being a millionaire may simply mean owning a house and having a decent pension.

The word stayed the same.

Its psychological meaning changed.

“Billionaire” became the newer shorthand for almost unimaginable wealth.

Now even trillion-dollar companies barely surprise us.

So the Billion Dollar Homepage is partly a joke about the inflation of ambition itself.

If the Million Dollar Homepage launched today, would anyone even blink at the name?

Probably not.

What if the original pixel had been indexed differently?

This is where the thought experiment gets fun.

Alex’s pixel cost $1.

If it had tracked CPI, it would cost about $1.72 today.

If it had tracked US house prices, it would be closer to $1.91 based on the Case-Shiller comparison.

If it had tracked the change in M2, it would be about $3.47.

If it had tracked average production and nonsupervisory hourly earnings, roughly $2.05.

If it had simply followed petrol prices from the 2005 average to early September 2026, roughly $1.83.

The BDH pixel?

Still:

$1

Here is the comparison:

Those figures are not saying these measures are interchangeable.

They aren’t.

They are simply different ways of showing how much the economic landscape has changed while the number printed on the pixel stayed frozen.

Why keep BDH at $1?

Because the $1 is part of the joke.

And part of the history.

A 10 x 10 block contains 100 pixels.

So the minimum purchase remains $100.

That means a startup can join.

A local business can join.

A band can join.

A club can chip in.

A bunch of mates can decide, for no sensible reason whatsoever, that they deserve 100 pixels of internet history.

If I inflation-adjusted the starting price, I would be fixing something that does not need fixing.

The interesting price discovery starts after the first buyer arrives.

The first price is nostalgia. The second price is the market.

This is the bit I particularly like.

BDH effectively uses two pricing systems.

The first is deliberately stuck in 2005:

$1 per pixel.

After that, nostalgia gets out of the way.

If somebody wants your block, they must bid at least 5% more.

Then somebody can outbid them.

And someone else can outbid them.

There is no CPI adjustment.

No committee.

No clever dynamic-pricing algorithm.

No economist deciding what the pixels ought to be worth.

Just:

What will someone pay?

That means an unwanted block might sit close to its original value for years.

A highly visible or contested block could move very quickly.

The price becomes a public record of attention.

And attention, unlike CPI, is difficult to put in a neat basket.

Could a pixel beat inflation?

Yes.

But that does not make it an investment.

Suppose a $100 block changes hands repeatedly under the 5% rule.

Its headline value might move like this:

$100

$105

$110.25

$115.76

$121.55

$127.63

And so on.

If enough advertisers fight over it, the price could rise much faster than inflation.

But the advertiser does not own an appreciating digital asset.

They are buying advertising exposure.

When someone outbids them, the next advertiser gets the space.

That distinction matters.

BDH is not an NFT.

It is not virtual land.

Nobody should buy pixels because they expect to sell them to somebody else later.

They buy because they want attention now.

The rising bid simply tells us that somebody else wants that attention more.

So what is a dollar actually worth?

There is no single answer.

Against the CPI basket, it buys substantially less than it did in 2005.

Against a house, the story is different.

Against wages, different again.

Against petrol, different.

Against gold or equities, very different.

Against a starting pixel on the Billion Dollar Homepage?

Exactly what it bought in 2005.

One pixel.

For now.

Because once somebody wants your pixels badly enough, inflation is the least of your problems.

You’ve got a bidder to deal with.

That’s inflation for ya

Twenty-one years ago, the Million Dollar Homepage asked the internet for $1 per pixel.

Twenty-one years later, we’re asking for the same thing.

The dollar changed.

The cost of living changed.

Wages changed.

House prices changed.

The money supply changed.

The internet changed almost beyond recognition.

And somehow the pixel price survived untouched.

In 2005, trying to make $1 million from a single webpage sounded ridiculous enough to make international news.

In 2026, a million dollars barely gets a tech founder invited onto the right podcast.

So we added three zeroes to the ambition.

And none to the starting price.

That’s inflation for ya.