The New York Times Points Out That the Dollar's Purchasing Power Has Shrunk by About 30% Over the Past 6 Years
The New York Times reports that the dollar's purchasing power has shrunk by 30% over the past 6 years, primarily due to cumulative inflationary pressures following the pandemic.
Official BLS data shows that from 2020 to mid-2026, the CPI has increased by nearly 29%, peaking at 9% in 2022, with an inflation rate of 4.2% in May 2026 driven by energy prices, significantly reducing consumers' real purchasing power.
In market mechanisms, savers and fixed-income sellers are accelerating their shift towards hard assets like gold and Bitcoin for hedging, with funds flowing from cash and bonds to inflation-protected assets, putting pressure on holders of dollar-denominated assets while benefiting commodity and crypto producers.
Source: Public Information
ABAB AI Insight
The Federal Reserve injected trillions of dollars in liquidity through massive QE and zero interest rate policies during the pandemic from 2020 to 2022, similar to actions taken after the 2008 financial crisis that inflated asset prices but also sowed the seeds for subsequent inflation risks, including rapid CPI increases due to supply chain disruptions and stimulus in 2021-2022.
In terms of capital pathways, the Fed directed liquidity towards the stock market and real estate through asset purchases and interest rate adjustments, motivated by the need to stabilize employment and the financial system, but this led to an expansion of M2 money supply and diluted the value of the dollar, with institutions and the wealthy transferring wealth preservation through commodity and crypto allocations.
Similar cases include the significant depreciation of the dollar's purchasing power during the 1970s stagflation period followed by a gold bull market, as well as the post-pandemic inflation wave in multiple countries in 2021. The current U.S. is in a phase of asset repricing driven by currency depreciation in a high-debt environment.
Essentially, this reflects capital concentration: loose monetary policy transfers wealth from public savings to asset holders and debtors through an inflation tax mechanism, accelerating the concentration of pricing power among a few hard assets and producers, thereby restructuring the distribution of social wealth.
ABAB News · Cognitive Law
Inflation is not evenly distributed; it is an invisible tax that cuts the savings of the poor to benefit asset leverage.
The more aggressive the monetary expansion, the faster wealth concentrates among the early adopters.
When purchasing power shrinks, cash becomes a liability, while hard assets are the true leverage.