Fiat framework questioned

A decade of quiet erosion: what $1 in 2016 buys today

The chart below shows the purchasing power across ~80 government currencies since 2016 (IMF data). It's worth a few minutes of your time, to use it as a framework for your portfolio return over thr last 10 years, measured in fiat currencies.

📉 The "strong" currencies didn't hold their value either:

• Swiss franc: -8%

• Euro: -22%

• US dollar: -26%

• British pound: -27%

And the tail is brutal: Nigerian naira -79%, Turkish lira -91%, Argentine peso -99%, Venezuelan bolívar -99.99%.

Developed markets aren't immune. They're just slower.

Why is this happening? Follow the debt.

US federal debt stood at $40.17 trillion at the end of fiscal 2026, and it has more than doubled since 2016. The FY2026 deficit was nearly $2 trillion, and the CBO projects it rising to $3.1 trillion within a decade. Net interest alone is projected to climb from $1.0 trillion in 2026 to $1.8 trillion in 2035. In Europe, the story is similar.

When governments spend more than they collect, the pressure to inflate that debt away is structural, not cyclical. Inflation works as a quiet tax on anyone holding cash, savings, or fixed-income promises. Compounded over ten years, it's the 20-30% haircut you see in this chart.

So what do we do about it?

For policymakers: credible fiscal consolidation, growth-oriented reform, and central bank independence. None of it is easy, and none of it is fast.

For investors and advisors, where there is more control on potential solutions:

1️⃣ Treat cash as a short-term tool, not a store of value

2️⃣ Own productive assets: equities, real estate, businesses

3️⃣ Consider scarce, non-sovereign assets (gold, silver, and increasingly bitcoin) as a diversifier against debasement

4️⃣ Revisit portfolios regularly. The real return is what's left after inflation.

The question is not wether fiat is about to collapse. But wether a 26% loss in purchasing power over nine years should change how we define "safe."

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