Why the Dollar Loses Value While Assets Go Up (And What to Do About It)

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Every week I put the same numbers on screen: what cash earns in the bank, what inflation takes away, and what gold, silver, Bitcoin, Ethereum, the Dow and the S&P 500 did over the same stretch. In this show I walk through those charts, explain why the purchasing power line is the only red one, and then give you a warning about getting too excited and skipping the boring step.

I'm not a financial advisor, and I say it on every show: I'm a big dumb animal, don't do what I do. This is information, not advice. But the math on the dollar is worth understanding no matter how much debt you're carrying.

What you'll learn

• What "the dollar is dying" actually means in plain numbers
• Why 2–3% inflation matters more over ten years than it looks over one
• What cash in savings, 3-month CDs and 3-month Treasuries earned versus inflation
• How spot ETFs let you hold gold, silver, Bitcoin or Ethereum without a safe in your closet
• Why an emergency fund comes before assets — and why I moved some money back to cash

Purchasing power is the only red chart

I show four charts over five years: the Dow (30 stocks), the S&P 500 (500 stocks), Bitcoin, and gold. All four go up and to the right. Then I show a fifth chart, and it's red: the purchasing power of the U.S. dollar. You might think if you put $100 in the bank you still have $100 next week, so nothing was lost. But eggs cost more, cars cost more, housing costs more. What your money buys goes down.

The inflation numbers

Inflation printed 2.7% in November and 2.6% in October. Over a single year, 2–3% doesn't feel scary. Pull the chart back ten years and you see something different: before 2021 it ran low, sometimes near zero or below. Then 2021 through 2023 hit 8, 9, 10%. Those prices rose and never came back down. That's why the average car isn't $30,000 anymore, it's closer to $40,000, and the average house isn't $380,000, it's closer to $480,000. For prices to actually fall, that inflation line has to go negative — and it hasn't.

Cash versus assets, side by side

On my weekly table, the top three lines are savings, a 3-month CD and a 3-month Treasury. I use short terms because that's money you can turn back into dollars fast. The rate of return isn't great, and with inflation where it's been, those gains get wiped out or you go slightly backwards.

The next lines are what I'd call stores of value. From early February 2024 to December 20, 2024, gold went from about $2,250 to $2,643. Silver was up close to 30%. Bitcoin and Ethereum were up substantially. The Dow and S&P 500 were up substantially too. And here's a point people miss: when you log into a retirement account and see a dollar value, you don't own dollars — you own whatever asset was purchased. It only becomes dollars when you sell. The truly wealthy don't sit on piles of currency; they hold assets.

You don't have to buy 500 stocks

If buying 30 or 500 individual stocks sounds ridiculous, or you don't want to figure out where to physically buy gold, spot ETFs are the shortcut I point people to. A spot ETF buys the underlying asset at equivalent value and holds it on your behalf. You don't get the physical metal, but you can buy and sell a share quickly and convert back to cash when you need it.

The warning

Here's the part to stick around for. Assets go up and to the right over years, but they also pull back hard. During the week I recorded this, the Dow dropped 1,000 points in a day and Bitcoin went from about $105,000 to about $95,000 — roughly 10% in a day. If everything you own is an asset, a surprise expense or a job loss forces you to sell at the worst possible moment.

On top of that: unemployment was 4.2% and trending up with layoffs in the news, a new administration means volatility, and in my opinion real estate is in a bubble — median home price is running around four-point-something times median household income when it's historically been two- or three-point-something. Governments also need to refinance debt, which usually means more money in circulation, which usually pushes asset prices and inflation up. So next year could be great, could be bad, could be both. I don't know. What I do know is when earnings look stretched and I think the downside is bigger than the upside, I mitigate. I've been selling some gold, some silver and some stocks and moving a little more into cash.

Key steps

1. Build and keep an emergency fund in cash first, so you never have to sell in a down market.
2. Knock out high-interest debt — run your own numbers with the credit card payoff calculator.
3. Track inflation, unemployment, and the 2-year and 10-year Treasury so you know what environment you're in.
4. For money you don't need soon, consider assets rather than sitting fully in currency.
5. Use spot ETFs if you want simplicity and liquidity instead of buying 500 stocks or physical metal.
6. When you think downside outweighs upside, mitigate — move some back to cash. That's what I do.

FAQ

If assets beat cash, why should I hold any cash at all?

Because life doesn't wait for a green chart. Braces, tires, or a lost job can hit the same week the Dow drops 1,000 points. Cash is what keeps you from selling assets at a loss. Read more in savings account vs paying off debt.

Should I invest before paying off my credit cards?

Compare the guaranteed interest you're paying against an uncertain return. A card at 20%+ is a very high bar for any investment to beat. I walk through the comparison in investing while in debt and pay off debt or invest first.

What's a spot ETF in plain English?

It's a fund that actually buys the asset — gold, silver, Bitcoin or Ethereum — in an amount equal to what you bought. You hold shares instead of the physical thing, which makes it easy to sell and turn back into cash. You don't take custody yourself.