08/07/2026
Why Haven't You Become Richer in the Past 10 Years?
Over the past decade, you may have gotten a promotion, a raise, and learned to spend money more wisely—using credit card cashback programs and various "money-saving" techniques to minimize the marginal cost of every purchase. You did everything "right."
But if you convert the numbers on your payslip to the purchasing power of ten years ago, you'll find something very uncomfortable: your salary is rising, your account balance is rising, but the things you can buy—the same down payment for a house, the same family trip, the same dinner that once seemed "a bit expensive but still affordable"—are becoming increasingly difficult to afford.
This isn't an illusion, nor is it due to a lack of financial management skills. It's the result of executing a contract—a contract you've never read, never signed, but are fulfilling your obligations to every day. The other party to this contract is the world's major central banks, and the terms are simple: every year, the currency you hold will depreciate by about 2%. This isn't an accident, nor a mistake, but a policy objective established by almost all major economies worldwide over the past thirty years.
The question is: if we had known the terms of this contract ten years ago and chosen to fulfill the function of "savings" with valuable assets instead of cash, how different would our situation be today? This article aims to seriously calculate this.
2%, an open "devaluation commitment"
Inflation is not a malfunction, it's designed.
In most people's minds, inflation is like an occasional ailment of the economic machine, an imbalance that needs to be "cured." But the actual evolution of monetary policy over the past thirty years has been quite the opposite: major central banks around the world have gradually regarded stable positive inflation (around 2%) as an important target of monetary policy.
This turning point can be traced back to New Zealand in 1990. New Zealand had just emerged from the high inflation of the 1970s and 80s. The Reserve Bank of New Zealand Act 1989 established central bank independence and an inflation targeting framework. New Zealand's first Policy Targets Agreement (PTA), signed in 1990, set a CPI inflation target of 0–2%, thus New Zealand is often considered the birthplace of inflation targeting.
This framework subsequently proved highly contagious. Canada, the UK, Sweden, and other countries followed suit in the early 1990s. However, what truly made "2%" the de facto standard of global monetary policy were the belated yet far-reaching statements from several larger economies:
In January 2012, the Federal Reserve issued its first written statement on Longer-Run Goals and Monetary Policy Strategy, formally establishing 2% (measured by the PCE price index) as its "long-run" inflation target. This marked the first time in the Fed's history that it had officially published a clear long-term inflation target. It's noteworthy that the Fed, founded in 1913, only formally declared this figure nearly a century later, demonstrating that "inflation targeting" is a relatively young institutional invention, rather than an inherent attribute of monetary policy.
In January 2013, the Bank of Japan, in a joint statement with the government, set a 2% "price stability target" as the core anchor of monetary policy within the three arrows of "Abenomics," aiming to end nearly two decades of deflation and slow growth.
In July 2021, the European Central Bank (ECB) completed its monetary policy strategy review, revising its previous vague statement of "below but close to 2%" to a more explicit "symmetric 2% medium-term target"—meaning that inflation above or below 2% is considered a deviation, rather than "the lower the better."
Why did the central bank "have to" make this choice?
Looking only at the outcome, "actively choosing to let the currency depreciate every year" sounds like a dereliction of duty. However, from the perspective of the central bank's own policy logic, this is almost a reluctant but rational choice, underpinned by three layers of practical constraints:
First, to avoid a deflationary spiral. Deflation is more dangerous than mild inflation because of psychological mechanisms: if people expect prices to be lower tomorrow, the most rational choice is to postpone consumption and investment, which further suppresses demand, leading to continued price declines and creating a self-reinforcing spiral. Japan's "lost two decades" from the 1990s to the early 2010s are often cited as the most painful case study of this logic.
Second, to adapt to the rigidity of nominal wages. A recurring phenomenon in economics is that companies find it extremely difficult to directly lower employees' nominal wages (even during periods of business difficulty), as this would severely damage morale and lead to legal/contractual disputes. However, moderate inflation provides an "invisible" adjustment channel—nominal wages remain unchanged, but real purchasing power can be quietly reduced with inflation, allowing companies to flexibly adjust real compensation without triggering employee backlash.
Third, it preserves policy space for interest rate cuts. Nominal interest rates are difficult to lower significantly below zero (the so-called "zero lower bound" problem). If the target inflation is 2%, then nominal interest rates will usually remain at a positive level, meaning that if an economic recession occurs, the central bank still has the "interest rate cut" card to play. If the long-term target inflation is 0%, nominal interest rates may hover around zero for many years, and once a crisis occurs, the central bank will no longer have the traditional room for interest rate cuts.
The Cruelty of Compound Interest: 2% is Not a Small Number
"2% per year" sounds mild and harmless, but compound interest is never mild. According to the compound interest formula, a 2% annual inflation rate means:
Over 10 years, the cumulative price increase is approximately 21.9% (1.02^10 ≈ 1.219), corresponding to a decrease in purchasing power of about 18%.
Over 35 years, based on the approximate estimate of the "Rule of 72" (72 ÷ 2 = 36), purchasing power is roughly halved every 35 years. In other words, a young person just starting their career will find that upon retirement, the same amount of savings has only about half the purchasing power it had back then.
This is the true weight of the "2%" contract: it's not a one-time loss, but a continuously operating, never-ending devaluation machine. The 10,000 yuan you save today isn't "sitting there doing nothing," but "slowly burning away every day."
Unfulfilled Commitment: A Huge Crack Between Promise and Reality
If the central bank can truly and precisely control inflation at 2%, then the "2%" is at least an honest contract; you know the rules and can plan accordingly. But what has actually happened over the past decade is far more complex and brutal than the "mild 2%" target.
The global inflation shock after 2020 is the most direct manifestation of this crack. Supply chain disruptions, soaring energy prices, and the combined effect of loose fiscal and monetary policies caused the actual inflation rates in major economies such as the US and the Eurozone to significantly exceed the 2% target between 2021 and 2023. The US CPI peaked at 9.1% in June 2022, and the Eurozone HICP peaked at 10.6% in October 2022, reaching three to four times the target level.
Even if inflation declines somewhat by 2024-2025, the cumulative inflation path over the past decade has most likely deviated significantly from the ideal curve of "precise 2% annually." This means that if you plan your savings depreciation solely based on the "officially promised 2%," you will almost certainly underestimate the actual loss of purchasing power.
And this is just an example of a "mild deviation." More extreme examples occur in economies where the credibility of their currencies is structurally flawed:
The Japanese yen experienced a historic currency collapse over the past decade. Influenced by the Bank of Japan's long-term ultra-loose monetary policy and the significant interest rate differential with the Federal Reserve's rate hike cycle, the yen's exchange rate against the US dollar fell to its lowest level in decades after 2022.
The Turkish lira's depreciation over the past decade is an extreme case in monetary history: persistent high inflation and an unconventional combination of low interest rates caused the lira's purchasing power against the dollar to plummet.
The Argentine peso's story is another version of "fiat currency credibility collapse": repeated debt defaults and hyperinflation cycles have made the peso one of the most frequently cited examples in global currency depreciation case studies.
These extreme examples remind us of something easily overlooked: "2%" is never a number guaranteed by physical laws; it is merely a policy commitment—and the credibility of such a commitment depends on the independence and discipline of the institution implementing it, as well as the fiscal and political environment in which it operates.
A promise, but no guarantee. This is the most easily overlooked yet most fatal flaw in the entire logic: the central bank promises 2%, but this promise is completely unsecured.
If you lend money to a company, you usually receive collateral, a priority order of repayment, or at least a contractual clause outlining the consequences of default. But when you "deposit" your life savings in your local currency, there is no collateral, no penalty clause, and no legal recourse between you and the institution that issues that currency. If actual inflation significantly deviates from the target, whether due to external shocks, policy missteps, or fiscal pressure forcing concessions in monetary policy, you have no contractual instrument to claim compensation when the currency depreciates. All you can do is bear it.
This asymmetry stems from the fundamentally different legal enforceability of the three classic functions of money: unit of account, medium of exchange, and store of value.
The first two functions are almost entirely mandated by the system: your salary must be denominated and paid in legal tender, your taxes must be paid in legal tender, and your long-term debt contracts, such as mortgages and car loans, are almost entirely settled in legal tender. This is the infrastructure of the modern economy; you cannot withdraw from it, and there is virtually no room for negotiation.
However, the function of "store of value" is never mandatory. In most countries, the law does not require individuals to hold assets in their local currency as long-term savings. You can legally convert your savings into gold, stocks, real estate, or any other asset form you believe better preserves its value.
Who is "packaging and handing over" to currency? The answer is not because currency is suitable for "store of value"; data from the past decade has repeatedly proven the opposite. The problem isn't that switching savings from "local currency cash" to "other assets" is inherently difficult:
Opening a securities account and an overseas asset account involves cumbersome identity verification and compliance procedures;
The minimum investment threshold for many high-quality assets excludes ordinary wage earners;
When to buy, how much to buy, and whether to time the market require professional knowledge that most people lack;
More importantly, there's a psychological barrier—for decades, "saving money" has been implicitly equated with "putting money in a bank," and switching to "buying assets" is intuitively perceived as "speculation" rather than "saving."
This dual barrier of operation and perception is the invisible wall that truly locks the vast majority of people onto the track of "saving with depreciating currency." But the cost of this wall has been magnified infinitely over the past decade.
Three Types of People, Three Fates Having discussed the theory, let's look at the real numbers. Over the past decade, the differences in outcomes resulting from different "savings vehicle choices" are no longer a matter of "outperforming inflation" or "underperforming inflation," but rather a matter of life and death. Let's rewind to 2015. You have 100,000 yuan. Without making any transactions or trying to time the market, you do just one thing: buy an asset and hold it until 2025. What will be the approximate outcome of that 100,000 yuan ten years later?
Many people's choice over the past decade has essentially been to leave their money in the bank, earning stable nominal returns. The problem is that during the same period, the cumulative inflation in the US was about 30%, and Japan's cumulative inflation was also significantly higher than its long-term average. In other words, 100,000 yuan might become 121,900 yuan, seemingly a gain of 21,900 yuan, but the actual increase in purchasing power is likely very limited.
This is the most easily overlooked fact of the past decade: wealth growth depends not only on how much money you earn, but more importantly, on where you put your money. What often creates the difference is not trading ability, but the medium through which you store your money.
Looking at these two sets of data together yields a conclusion far more acute than simply "inflation is awful": Over the past decade, savvy investors have completely decoupled the two monetary functions of "exchange" and "store of value."
The Ten-Year Fates of Three Types of People
If we translate these figures into three real-life choices, we can roughly depict three trajectories:
Type A: Fiat Currency Investors. They are diligent, cautious, and risk-averse, depositing their hard-earned money in bank time deposits or buying "stable" money market funds recommended by banks. Over ten years, the numbers in their accounts have indeed grown slowly, and the nominal return seems to have "outperformed" demand deposits. However, when converted to real purchasing power, their ten years of hard work have largely only barely offset the erosion of inflation, and in years with unexpectedly high inflation, they have even suffered a net loss in real purchasing power. They haven't done anything "conventionally correct," yet they are still the group that has had the hardest time in this ten-year game.
Type B: Asset Players. What they did was essentially very simple: quickly convert their idle fiat currency liquidity into hard assets like gold, quality stocks, and Bitcoin, and hold them long-term without frequent market timing. This group wasn't necessarily professional investors; many were simply "too lazy" to manage their investments, buying and then leaving it alone. But it was precisely this "laziness" that allowed them to fully enjoy the huge premiums brought about by the global asset price expansion cycle of the past decade.
Category C: Altcoin Speculators. This is the most easily overlooked, yet equally important, group. They also attempted to "escape fiat currency devaluation," but chose altcoins—fundamentally lacking in value and purely driven by narrative and liquidity. Over the past decade, the vast majority of altcoins have gone to zero, or nearly to zero. The significance of this group is that while "escaping fiat currency" is rational in itself, the choice of "where to escape" is equally crucial. Not all "non-fiat currency assets" inherently possess value-preserving properties; the scarcity of the asset itself, the strength of consensus, and genuine demand are the core factors determining whether it can weather economic cycles.
The most honest signal: What are central banks buying themselves?
Here's an almost revolutionary perspective: you don't need to trust any analyst or research report; you only need to look at what central banks' own balance sheets have been doing over the past few years.
The official foreign exchange reserve management institutions of central banks worldwide have been continuously increasing their gold reserves at historic levels over the past few years.It is reported that gold prices repeatedly broke historical records in 2025, and the total amount of gold purchased by central banks worldwide reached a considerable scale.
This phenomenon itself is more convincing than any theoretical deduction. Central banks are not unaware of the inherent flaws of fiat currency in its "store of value" function; they are aware of it better than anyone else. They simply haven't, and don't need to, convey this understanding to every ordinary depositor.
From Crash to Asset Accumulation: How Crypto Promises
This evolutionary path can actually be seen in the practices of the crypto world over the past few years. Take U-card cashback as an example: most projects promise users high cashback rates, but this obscures the ultimate fate of the token and its inevitable crash:
Fiat/Stablecoin Cashback: Consumption → Fiat currency consumed → The remaining fiat currency lies in the account, depreciating instead of appreciating. Every time you spend, you are invisibly eroding your savings base due to inflation. You haven't "earned" anything; you've only completed a pure value consumption.
Token Cashback: Consumption → Stablecoin consumed → Merchants or platforms return altcoins as "rewards." This model superficially introduces a "cashback" incentive structure, but if the returned assets lack genuine scarcity and demand support, this "cashback" will most likely be diluted to zero over time, essentially just a different form of value loss.
However, RWA and tokenized US stocks offer crypto another option. Previously, only BTC was truly recognized globally as a crypto asset, but the on-chaining of US stocks and real-world assets has changed everything. For example, if we adopt an asset-back approach, returning genuine hard assets with long-term value support to users, we can bind users to the accumulation of valuable assets.
This is the ultimate conclusion this article aims to demonstrate, and its only intended application scenario: We cannot change the process of central banks setting a 2% inflation target, nor can we change the fact that this commitment is unsecured. But what we can completely change is what assets will absorb the flow of fiat currency from our hands. This may be the simplest yet most effective way for ordinary people to cope with this "2% game" that has lasted for over thirty years and shows no signs of ending.
