Assets More Expensive... or Money Cheaper?

Major currencies were never just paper and metal; they were reflections of the economic and financial power standing behind them. When that power shifts, a currency does not vanish overnight, but it gradually loses some of its ability to preserve value. Therefore, the most critical question may not be which currency will lead the world, but where wealth settles when holding cash alone is no longer sufficient. What appears as a rise in asset prices partly reflects the declining purchasing power of the currency by which we measure it. If every previous economic era bore the name of a currency, the next phase may bear the name of assets.

The rise of major currencies was tied to the sources of power in their respective eras, each backed by tangible fundamentals. The Spanish peso, known as the piece of eight, spread widely, supported by its silver content and expanding trade. Then the Dutch guilder emerged with the rise of Amsterdam as a hub of commerce and finance, while the British pound carried the weight of British industry and naval power.

The dollar rose alongside the expanding strength of the U.S. economy, and its status solidified after the 1944 Bretton Woods Agreement, which pegged it directly to gold. Leadership was never an inherent, permanent trait of the currencies themselves, but rather a reflection of the power underpinning them.

In 1971, the United States suspended the convertibility of the dollar into gold for foreign monetary authorities. The dollar’s role did not end, but it entered a phase where the status of major currencies was no longer based on their convertibility into gold, but on confidence in the economies, institutions, and policies behind them. For the first time, the sole guarantor of paper money became the state and its power alone. The dollar remained the cornerstone of the global financial system, but the question had since shifted: it was no longer whether an asset would rise, but how much value cash had lost to make assets appear so expensive.

This does not mean the dollar is on the verge of collapse, or that paper currencies will disappear. Cash remains essential for salaries, trade, and settling obligations, and holding liquidity gives individuals and companies the ability to handle emergencies and seize opportunities. However, confusing liquidity with wealth is the problem. What we need in the short term is not necessarily the best way to preserve our purchasing power over the long term.

This distinction becomes increasingly important as public debt rises. The International Monetary Fund estimated global public debt at around 94% of GDP in 2025, projecting it to reach 100% by 2029, a year earlier than its previous forecast. Furthermore, total debt across governments, households, and corporations exceeded $365 trillion in the first half of 2026, according to a report from the Institute of International Finance released last week. The report noted that the decline in the debt-to-GDP ratio from its 2021 peak was largely due to inflation boosting nominal GDP, rather than an actual reduction in debt.

In other words, debt was eroded, not repaid. If the guarantor of a currency is state power, then what burdens the state weakens its currency, especially when inflation becomes the easier political solution to alleviate the debt burden. Here, the full chain becomes clear: as long as debts continue to grow, the state guaranteeing the currency becomes heavier, and its currency’s ability to preserve value weakens. Consequently, every asset measured in that currency appears more expensive, and people shift from holding cash to holding assets with genuine economic utility.

Inflation may reduce the real burden of existing debts, but holders of cash balances pay the cost through the reduced purchasing power of their money. Therefore, it is not enough for a balance to grow in nominal terms; what matters is what it can buy in terms of housing, goods, and services years later. The price of a house or a company may rise in local currency not because the asset has improved, but because the unit of measurement itself buys less. Assets have not risen so much as the currency has fallen relative to the assets that already existed.

The question is not limited to individuals. Central banks themselves, the entities that issue currency, have purchased approximately 1,000 tons of gold annually over the past four years—double the average of the previous decade, according to the World Gold Council—with a record proportion of them planning to increase their reserves. The issuer of the paper retains the metal.

This underscores the importance of assets, not merely as guarantees of profit, but as a return to what originally underpinned currency: a productive company capable of generating profits and keeping pace with rising costs, a property that yields income, resources essential to the economy, or precious metals for diversification. What they have in common is that they possess intrinsic economic utility, independent of the paper currency used to measure them. An asset’s price may also rise because its earnings have grown or its utility has improved, not because the currency has lost value. Moreover, a good asset can become a poor investment if purchased at an inflated price. Therefore, sound selection and risk management remain more critical than simply shifting from currency to any asset.

The major economic epochs have each borne the name of a currency: the peso, then the guilder, then the pound, then the dollar. In my view, the next era will not be named after a currency, but will be the era of assets. The question will shift from which currency we hold to which assets we own. This is not a transition to a world without currencies, but rather a repositioning of everything to its proper place: currency for circulation and liquidity, and carefully chosen assets for preserving and growing wealth. When we see asset prices doubling over the years, we should remember that part of that increase reflects not a rise in the assets themselves, but a decline in the currency by which we measure them. Wealth is not measured by the number of banknotes we count, but by the purchasing power they preserve for us over time.