Money is not worthless in October 2026, but it is steadily buying less: US consumer prices are about 30% higher than in January 2020, which means a dollar from then now buys roughly 23% less. This article gives 15 reasons why cash keeps losing ground, updated with where the numbers stand today, and what to do about it.
Aluxers, the process started long before the pandemic. But the stimulus years of 2020 and 2021 pushed it into a new gear, and the years since have shown how much of it was real.
As usual, here is the video version of this article:
Money in 2020 vs 2026: the key numbers
| Measure | Early 2020 | 2026 |
|---|---|---|
| US consumer price index | 259.1 (Jan 2020) | 336.3 (Sep 2026), up about 30% |
| US inflation, 12 months | n/a | 3.7% (Sep 2026) |
| US M2 money supply | $15.4 trillion (Jan 2020) | $23.3 trillion (Aug 2026), up about 51% |
| US federal debt | $23.2 trillion (Jan 2020) | $39.5 trillion (Apr 2026) |
| Global debt | $277 trillion (our 2020 figure) | Above $365 trillion (mid-2026) |
| Federal funds rate | n/a | 3.75% (Sep 2026) |
| Bitcoin | n/a | About $79,500 (Oct 26, 2026) |
| Gold | n/a | About $4,000 an ounce (Oct 26, 2026) |
With that said, here are 15 reasons why money is losing value.
1. Interest Rates Often Trail Inflation
When we first wrote this, central banks in Europe and Japan were charging savers through negative rates. That chapter has mostly closed: the European Central Bank deposit rate stands at 2.50% since September 16, 2026, and the US federal funds rate sits around 3.75%.
The problem has simply moved. With US inflation at 3.7% in September 2026, a savings account paying less than that still shrinks your purchasing power every year, just less visibly.
If you put $100,000 in an account that pays 2% while prices rise 3.7%, you end the year with more dollars but less stuff.
2. Every Country Is in Ridiculous Amounts of Debt
Global debt has passed $365 trillion in 2026, a record, after rising by about $10 trillion in the first half of the year alone. Our 2020 figure was $277 trillion.
The US federal government alone owed about $39.5 trillion in April 2026, up from $23.2 trillion at the start of 2020. Debt-to-GDP ratios have eased only because inflation inflated the denominator, not because anyone paid anything back.
Who is it owed to? Mostly to pension funds, banks, insurers and other governments. And the easiest way to shrink a debt is to let the currency it is written in lose value.
3. It Is No Longer Backed by Anything
Until 1971, the dollar was tied to gold. Then Nixon ended that link, and since then currencies have been backed by trust in the issuing government.
That trust has worked well for the US, because the dollar is still the world’s main reserve currency and most countries hold dollars the way they once held gold. But central banks have also been diversifying their reserves for two decades, and gold trading around $4,000 an ounce in October 2026 tells you where plenty of investors want a store of value.
4. They Keep Creating More of It
The US M2 money supply was $15.4 trillion in January 2020 and $19.1 trillion by December 2020. That is a jump of roughly 24% in a single year, which is where our old line came from: a big part of all dollars in existence appeared in 2020.
By August 2026, M2 stood at $23.3 trillion, about 51% above where it was before the pandemic. Supply has grown far more slowly since 2022, but it has not gone back down, and prices have not either.
5. You Are Being Forced Into Inflated Assets
By this point you may think the answer is to move your savings into something safe, like real estate. You are not wrong, but property has been inflated too. Compare a two-bedroom apartment where you live to the same one in 2020. Same walls, much higher price: the change is in the currency, not the building.
The commercial side moved the other way. Offices emptied out when remote work took off, and many big owners were left holding the bag. Money did not stop flowing into housing; it stopped flowing into the buildings people no longer use.
Finance writer Robert Kiyosaki has a great book on the topic, called Fake Money. You can go to alux.com/freebook and sign up: our friends at Audible give you an audiobook for free if this is your first time signing up.
If you are thinking about investing your money smartly, check out 15 BEST INVESTMENTS of 2020-2021.
6. Governments Gave It Away to Buy Time
In 2020 and 2021, the US and plenty of other developed nations did something many people never thought possible: they mailed out money. The US relief package passed in 2021 alone was $1.9 trillion.
There is no free lunch. That money bought a few quiet months, and the price arrived later as the inflation spike of 2021 to 2023 and prices that never came back down. Zimbabwe, Venezuela and Romania show the extreme version of what happens when governments pay their bills by printing.
7. Money Today Is Just Numbers on a Screen
Most money is digital. When you send money from one account to another, real cash does not leave one bank for another. The numbers change in two separate ledgers, and the bank may still charge a fee for it.
That is not a scandal, just a reminder that what you hold is a promise recorded in a database. Treat it as a tool for exchange, not a treasure to hoard.
8. Traders Can Move the System with Borrowed Money
The GameStop episode of early 2021 was a wake-up call about how much borrowed money and short selling sit underneath the market. Whatever you think of hedge funds, they create no product, and they profit from rules that let money move from one column to another.
Since then, the same dynamic has moved into options trading and leveraged crypto bets. When trading is the game, the price of real things can drift away from the value of real things.
9. Universal Basic Income
Universal basic income keeps coming back as a utopian fix. Our view has not changed: when a majority can vote itself a raise, politicians compete to promise more, and the money behind the promise gets thinner.
The pandemic payments were a live test of how quickly cash handed out at scale turns into prices.
10. Bitcoin Is a Different Kind of Money
When we first wrote this in 2021, companies were just starting to move treasury cash into Bitcoin. Tesla bought $1.5 billion that year, and Strategy (then MicroStrategy) began buying in August 2020 with $250 million. By November 2025 Strategy reported holding over 650,000 bitcoins.
The picture is bigger now. The first US spot Bitcoin ETFs began trading in January 2024, Bitcoin hit $100,000 for the first time in December 2024, and a March 2025 executive order set up a US strategic bitcoin reserve. In July 2025 the GENIUS Act created a federal framework for dollar stablecoins. On October 26, 2026, one Bitcoin trades around $79,500.
Honest caveat: Bitcoin is volatile and has had deep drops. Its case is a fixed supply, not a smooth ride. It works as a hedge against money creation, but it is not a place for money you will need next month.
The better question is not whether Bitcoin beats the dollar this week. It is what you want a slice of your wealth to be priced in over the next 20 years.
11. The Stock Market Is Not the Economy
The S&P 500 closed around 7,624 on October 23, 2026. When the market rallied through the shutdowns of 2020, it was a sign that prices of financial assets follow money and interest rates more than they follow everyday life.
Wages, rents, groceries and the stock index are on different clocks. Retirement is also now largely a do-it-yourself project: unless you build the assets, nobody else will carry you.
12. The Rich Are Setting the Price
Many markets are seller’s markets, and the sellers of the things that matter (homes, land, companies) are mostly people who already hold a lot of assets.
When you hold the asset, you can say no to a price. When you hold only cash, you must find someone to say yes. That is why housing in particular keeps outrunning wages.
13. Banks Create Money When They Lend
Banks do not lend out your deposit like a cashier handing over your envelope. When a bank issues a loan, the loan itself creates a new deposit. This is how fractional-reserve banking lets the supply of money grow beyond the cash held in vaults.
One update: the US kept formal reserve requirements until 2020. The old “banks lend ten times what they hold” rule of thumb is therefore a textbook simplification today, and what limits lending is capital rules and demand for loans.
14. Infinite Growth Is a Myth
We are big fans of index funds at Alux, but even they rely on a growing economy. Imagine every person on Earth invested in the same fund and expecting 15% a year, while the world economy grows in the low single digits. The math does not close.
Returns have to come from somewhere, and in the long run that source is productivity: better tools, better systems, and now AI. Money that earns less than productivity gains is the money that loses.
15. We May Need New Kinds of Money
The last reason is the speculative one. If humans ever settle on other planets, they will not bring stacks of paper cash with them. Money has always changed form, from shells to coins to ledgers to code, and the next form is already being built.
Bitcoin gets the job done as a store of value, though you will not pay for coffee with it and wait for confirmations. Stablecoins are the part of the new system that is aimed at spending, and with the 2025 US law now in place, they are going mainstream.
What can you do about it?
You do not need to panic, and you do not need to bet on a collapse. You need to avoid holding more cash than your next 6 to 12 months of needs, own productive assets (a business, skills, index funds, property you can afford), and keep a small, deliberately sized slice in a hard asset such as gold or Bitcoin if you believe in them.
Keep reading
- What actually happens when you deposit money in a bank: the plain-English version of reason 13
- 7 ways to invest money, ranked from worst to best: where to put money that is not cash
- Who gets access to cheap money: the other side of the debt story
- Where does the money disappear to in a recession?: what happens when the cycle turns
FAQ
Is money really becoming worthless?
No, but it is losing purchasing power. US prices are up about 30% since January 2020, so a 2020 dollar now buys roughly 23% less.
How much has the US money supply grown since 2020?
US M2 went from $15.4 trillion in January 2020 to $23.3 trillion in August 2026, an increase of about 51%.
How big is global debt in 2026?
It has passed $365 trillion, a record, after growing by roughly $10 trillion in the first half of 2026.
What is US inflation right now?
The 12-month rate was 3.7% in September 2026, with the federal funds rate around 3.75%.
Are negative interest rates still a thing?
Not in the major economies we checked: the European Central Bank deposit rate is 2.50% as of September 16, 2026. The bigger issue for savers is rates that trail inflation.
Is Bitcoin a good hedge against a weaker dollar?
Many investors use it that way, and it trades near $79,500 on October 26, 2026. It is also volatile, so treat it as a sized bet, not a savings account.
How we put this list together
We checked each claim against official statistics, central bank rates and market prices as of October 2026. Where a point is our opinion, it is written as one.
Last updated: October 2026.
