Why Your Savings Lose Value Every Year, Even at 2% Inflation
Philipp 11:07 Episode 4 of How Money Really Moves
Why Your Savings Lose Value Every Year, Even at 2% Inflation
How money is actually created, why the supply must keep growing, and why a savings account quietly loses ground every year — by design, not by accident.
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Why Savings Lose Value Every Year — Even at 2% Inflation
Commercial banks do not lend out existing deposits — they create new money at the moment they make a loan, as two matching balance-sheet entries. The Bank of England and the Bundesbank both say so plainly. The money supply then has to keep growing, because the system runs on debt that carries interest, and central banks target positive inflation specifically because they are terrified of deflation. The consequence for you is arithmetic: at the ECB's own 2% target, held over a 40-year working life, your money loses about 55% of its purchasing power. That is not the worst case. It is the design case, with everything going to plan.
Full article, with the sources and the numbers →
