The hard arithmetic of lost purchasing power
Based on the US consumer price index, USD 100 in 1971 had roughly the purchasing power of USD 795 in 2025. Put differently, a dollar in 2025 bought only about one eighth of what a dollar bought in 1971. No money needs to disappear from your account. The loss shows up at the checkout.
Your account balance remains visible while its purchasing power declines. Meanwhile, US federal debt passed USD 40 trillion in August 2026. The scale is enormous – a reason to think carefully about purchasing power & tangible assets.
What central banks actually do
Central banks do more than talk about gold: they buy it. Net purchases reached around 1,092 tonnes in 2024 and another 863 tonnes in 2025. Buying slowed but remained historically high. Physical gold continues to play an important role in official reserves.
China is also expanding its officially reported gold reserves. Its central bank reported buying 20.2 tonnes in August 2026. These purchases deserve attention. Gold is a tangible part of central bank reserves – and a physical asset whose opportunities & price risks you should understand.