If you talk to most gold or crypto fans, you will inevitably hear the story that the US dollar loses value every year. You can see this with the red dotted line below. The reason for this seems to be that there is always some sort of money printing, aka inflation, that debases the currency. But this is only partially true because it doesn't take into account the interest rates that people get for their USD when they save it.
If you look at the blue line, you can see how the value of your USD changes when you consider the red dotted line (inflation only), while adding in interest earnings. The purchasing power of the USD actually went up a lot before the money printing galore after the Great Financial Crisis in 2008. Since then, however, it has been declining for the past 15 years. Nevertheless, it is important to stay intellectually honest and be careful when denying that the USD is actually a pretty good store of value.
I have shared in smaller circles that I have actually locked in some of my purchasing power in USD at a guaranteed 5.5% per year for the next 25 years. Why is that? I would have locked it in even longer, but no one offered to pay me 5.5% per year if I gave them USD now, plus pay me back the USD then. My family and I can easily live on that 5.5% as long as inflation averages less than 5.5% per year. So the basic gamble I am making here is whether inflation stays above or below 5.5% on average over 25 years.
If it turns out to be a bad investment, I am fine because my other investments (stocks, #ethereum) will probably do well. If it turns out to be a good investment, I am ok too. Always a win, regardless of what direction. That's the goal of investing.
