Posted on 09/30/2025 10:11:47 AM PDT by delta7
Since 2007, major currencies have lost roughly 85% of their purchasing power relative to gold.
Whenever gold rises and I get excited as a gold investor, I’m often met with the familiar refrain: “Gold isn’t really going up, the dollar is just losing value.” I used to brush that off as a cliché or a game of semantics, and honestly, it annoyed me. But over time I decided to dig deeper. I started analyzing the data visually, which is my favorite way to learn, and that’s when it finally clicked. They were right. Gold wasn’t truly soaring; fiat currencies were quietly eroding. Since then I’ve made it a mission to help others see this clearly too, using compelling charts that drive the point home. That’s exactly what I’m going to show you today.
Let’s begin with a clear visual. The chart below shows gold’s performance since 2007 across several major world currencies: the U.S. dollar, euro, British pound, Swiss franc, Canadian dollar, Japanese yen, and Australian dollar. While this isn’t an exhaustive list of global currencies, it offers a solid and representative sample to support the points I’ll be making throughout this piece. As the chart reveals, gold has surged by around 450% in most of these currencies, with gains ranging from a low of 270% in Swiss francs to a staggering 748% in British pounds.
Next, I’ll present the same data from a different perspective. This time, I’ll highlight the purchasing power of each currency relative to gold, or in other words, how much physical gold each currency could buy over time.
Since 2007, the major world currencies featured in this report have lost approximately 85% of their purchasing power when measured against gold. On the low end, the Swiss franc has declined by about 73%, while the British pound has suffered the most, with an 88% loss.
This chart offers compelling visual evidence of a critical truth: it’s less about gold rising in value and more about fiat and paper currencies losing purchasing power at an alarming rate.
So why are we using gold as the yardstick? Because it’s the most reliable monetary yardstick in history. For over 6,000 years, gold has served humanity as the premier form of money and store of value. While it temporarily fell out of favor starting in the 1970s, it is now making a powerful comeback as the world begins to recognize the deep flaws in our fiat money and monetary system.
These flaws have led to rampant inflation and growing financial instability. That is why people around the globe are turning back to gold in increasing numbers, helping drive its price to more than double over the past five years. In my view, this move is still in its early stages.
If you’re skeptical about using gold as a yardstick for measuring currency purchasing power, rest assured that its decline is confirmed by other metrics as well. The most widely used is the Consumer Price Index (CPI), which tracks the average change in prices over time for a fixed basket of goods and services.
I calculated the average CPI for the major world currencies referenced throughout this report and found that, on average, they’ve lost 33% of their purchasing power since 2007. The resulting chart closely mirrors the gold-based purchasing power chart shown earlier, with the steepest declines occurring during two key periods: 2007 to 2012 and 2020 to 2024. Both of these were periods of heavy monetary expansion during recessions or crises.
Now, I realize there’s a noticeable discrepancy between the roughly 85% loss of purchasing power when measured in gold and the 33% loss indicated by official CPI data. My working theory is that this gap exists because CPI figures rely on government-reported statistics, and governments have a well-documented tendency to understate inflation in order to make their currencies and economies appear stronger than they actually are.
Most people have noticed that the price increases they experience in the real world don’t line up with the tame inflation numbers coming from economists in ivory towers. Personally, I trust what gold is telling us, and it is saying that official inflation metrics are understating reality. When it comes down to it, I’ll err on the side of gold.
Another likely explanation that can coexist with the previous theory is that savvy players such as central banks and hedge funds, who have superior access to information and a far deeper understanding of the global macroeconomic, fiscal, and monetary situation, have dominated gold buying and have been the main drivers of the gold bull market in recent years, with relatively little participation from retail investors.
Their actions indicate that gold’s surge is not random but is likely anticipating much higher future inflation as a byproduct of today’s excessive global debt levels. That debt burden will almost certainly require aggressive debasement of fiat currencies in the coming years. In this scenario, the inflation reflected in the price of gold is likely leading the official inflation that eventually appears in consumer price indexes.
Now let’s examine why currencies steadily lose purchasing power over time: inflation, or the persistent rise in the cost of living. It’s important to understand that inflation isn’t fundamentally caused by wars, tariffs, supply shocks, strikes, droughts, or energy crises. These factors may contribute to short-term price spikes, but they are not the underlying driver.
At its core, inflation results from the debasement of currency. In other words, it is the dilution of a currency’s value through creation of new money. As Nobel Prize–winning economist Milton Friedman famously said, “Inflation is always and everywhere a monetary phenomenon.”
As the chart below illustrates, the global M2 money supply, one of the most widely used measures of total currency in circulation, has surged by 205% since 2007, rising from $38 trillion to a staggering $115 trillion. This massive expansion of the money supply is the driving force behind the soaring cost of living worldwide and a key reason why the price of gold has surged in every major currency across the globe.
The next chart demonstrates how gold’s price closely tracks the growth of the global M2 money supply over time. This is the primary reason why gold remains the most effective store of value and hedge against inflation.
Although nearly everyone alive today has lived their entire lives in a world of persistent inflation, it’s important to understand that this condition is not an inevitable feature of life or capitalism. Instead, it’s a direct consequence of fiat money or paper currencies that are not backed by gold or silver as they were prior to 1971.
Once the world abandoned the gold standard, which was the practice of backing currency with gold, governments and central banks gained the power to expand the money supply without restraint. And that’s exactly what they did. The result was a relentless rise in the cost of living.
If you’re interested in exploring this topic further, including some fascinating long-term data showing how the U.S. dollar has lost 97% of its purchasing power since 1913, be sure to check out this report I wrote.
I wish I had more gold but it seems too expensive to buy now.
______________
Estimates of gold ownership:
Percentage of the population:
A 2025 survey by First National Bullion found that 10.8% of respondents owned gold, a slight decrease from a similar 2020 survey, while 11.6% owned silver.
Household value:
Based on a 2024 estimate of Gold Survival Guide , the value of gold in a typical household may range from $600 to $1,800
I thought this was all first day stuff?
My concern is that the value of human labor is plummeting.
I used to think “ how and why are people in restaurants working for 4 dollars an hour?” Only now I ask “why are we all accepting the same wage amounts as we did in the 90s?”
“Gold isn’t really going up, the dollar is just losing value.”
Absolutely right...
In the Roman times a good Horse was equal to one once of Gold.
In the 1800s a good Horse was equal to one once of Gold.
Right now a good Horse is Equal to one once of Gold.
The value of Gold is rock stable.
Gold is a slow haul unless u know how to play options etc
I think silver has had recent run
Gold is for cataclysm investment
Better buy arms
Take the gold
Gold is a slow haul unless u know how to play options etc
I think silver has had recent run
Gold is for cataclysm investment
Better buy arms
Take the gold
For someone that says worldly goods don’t matter you sure spend a lot of effort pumping gold!
For someone that says worldly goods don’t matter you sure spend a lot of effort pumping gold!
[4] Do not weary yourself to gain wealth, cease from your consideration of it.
[5] When you set your eyes on it, it is gone. For wealth certainly makes itself wings like an eagle that flies towards the heavens."
For some odd reason, over the last couple decades my money has lost value MUCH MUCH faster at the gold shop than it has at the horse place. Or the grocery store. Go figure!
Someone just figured this out?☺
Just imagine... In the 1800s $20 would have bought what takes $3,000 to buy now... Even in 1966 my Father bought a brand new Chevelle Super Sport for $3,600 cash...
The Dollar is losing value every day, sure wish Trump would stop that...
As long as Politicians spend your money for free to receive donations to their campaigns it will never stop. That is the road to riches.
Gold in Japan today is 562,364 JPYen per troy oz.
I am sure when gold was much cheaper the Japanese thought it was too expensive, also.
Other nations people can only afford to buy their gold in grams. (1/32 Troy oz) Our future unless Trump can put our money back on a Gold standard.
Same with your house and your car.
I always like to see changes in the consumer price index, and compare salaries from long ago, with costs of products then, vs. salaries now and costs now.
My parents bought our house in 1963 for $31,000, but it was a struggle as Dad made less than $10,000 a year then. That house today is worth about $700,000.
We bought a new car in the mid 60s for about $3000. A similar car nowadays would be about $35,000.
If you want to get more details, start comparing the tax burden nowadays, with the tax rates of yesteryear.
Wealth you have or you don’t and if you have it keeping it is the tricky part.
Kind of like wisdom
Truth
You’re right, I looked it up.
If minimum wage was the same as it was in 1970, adjusted for inflation, it would be over $25/hour.
That’s over $50k a year working full time.
Silver has gone up $15 in the last 6 months. $5 in the last 2 weeks.
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