---
title: Your Money Is Worth Less
description: Why does gold appeal to savers in a world of inflation and expanding debt? Matthew Jones explains his case for physical gold and protecting long-term purchasing power.
---

<https://www.britanniabullion.com/blog>

# [Your Money Is Worth Less](https://www.britanniabullion.com/blog/your-money-is-worth-less)

 Written by [Matthew Jones](https://www.britanniabullion.com/blog/author/matthew-jones) | Oct 7, 2026, 11:00:47 AM

 

## Why I favour gold over the promises printed on currency

**By Matthew Jones, Co-founder & Precious Metals Analyst, Britannia Bullion**

We are taught to worry about losing money. We are less often taught to worry about money losing its value.

Yet that second loss can be just as damaging. Your bank statement can show the same balance while the life it will fund becomes smaller: fewer goods, fewer services, less security.

No failed bank. No dramatic market crash. Just a steady reduction in what your money buys.

That is why I favour physical gold. A system that treats rising prices as a policy objective deserves to be questioned by the people expected to save within it.

### The temporary decision that changed money

On 15 August 1971, President Richard Nixon suspended the dollar’s convertibility into gold for foreign official holders. What was described as temporary helped bring the Bretton Woods monetary system to an end.\[1\]

The importance was larger than a change in exchange-rate arrangements. A commitment to redeem dollars in a finite asset had placed a constraint on monetary policy. Removing that commitment gave policymakers greater flexibility.

Supporters regard that flexibility as a strength. My concern is what happens when flexibility becomes a permanent justification for postponing difficult choices.

Gold imposes an awkward limit: it cannot be created to meet a spending commitment. Currency and credit operate under different constraints—constraints that depend heavily on institutions, policy and public confidence.

For someone trying to preserve a lifetime’s work, that distinction matters.

### Even success means your cash buys less

The UK’s official inflation target is 2%.\[2\] That may sound reassuring after a period of sharp price rises, but it is still a target for prices to keep increasing.

If prices rise by exactly 2% a year for 20 years, £100 of cash left without interest will buy roughly what £67 buys today. Around a third of its purchasing power disappears—even with inflation consistently on target.

Interest can offset some or all of that loss. The relevant question, however, is what remains after inflation and any tax, rather than the headline rate.

Lower inflation does not usually restore the purchasing power already lost. It generally means prices are rising more slowly from their new, higher level.

We should stop confusing a slower deterioration with a reversal.

For the saver, monetary stability can therefore contain an uncomfortable contradiction: policy can be judged successful while idle cash steadily loses buying power.

### Borrowing buys time. It does not remove the bill.

Borrowing has legitimate uses. Businesses can finance productive investment; governments can fund infrastructure and respond to emergencies.

My objection is to borrowing becoming a substitute for confronting the gap between what is promised and what can sustainably be paid for.

Debt can push today’s cost into tomorrow. Refinancing can push it further. But the obligation remains, and servicing it competes with other spending.

This is why the response to 2008 deserves continuing scrutiny. The Bank of England introduced quantitative easing in 2009, creating money to purchase assets as part of its effort to support spending and return inflation to target.\[3\]

Those interventions had a purpose. Their existence does not settle the larger question: how much should savers depend on a system whose response to severe stress includes creating additional currency?

Inflation has several causes, including supply shortages, energy shocks and changes in demand. Treating every price rise as a direct consequence of money creation is too simple.

But the saver’s exposure is real regardless of the cause. When purchasing power falls, the number on the statement offers little comfort.

### Gold does not need to make a promise

Physical gold has an advantage that is easy to overlook in a world built around financial claims: the metal itself is not someone else’s liability.\[4\]

A bond depends on an issuer meeting its obligations. A bank deposit is a claim on a bank. Physical gold owned outright does not require an issuer to repay you.

Ownership arrangements still matter. Storage providers introduce practical and contractual considerations, and buyers should understand title, allocation, insurance and access.

But gold itself does not need a finance minister to balance a budget or a company to deliver earnings. Its supply cannot be expanded by a policy announcement.

That independence is the heart of its appeal.

Gold pays no interest or dividend. Its price can fall sharply, and buying, storing and selling it involve costs.\[5\] Those are real limitations.

I nevertheless see a strong case for holding an asset whose scarcity sits outside the decisions of the institutions managing our currencies.

### You do not need to predict a collapse

The argument for gold becomes unnecessarily fragile when it rests entirely on a prediction that the dollar or pound will collapse next month, next year or next decade.

The more immediate concern is already familiar: money buying less while households are told that the system is functioning normally.

A currency can remain widely accepted and still disappoint someone saving for retirement, protecting family wealth or preparing an inheritance.

Nor does every rise in gold prove an imminent crisis. Gold responds to several influences, and it does not track inflation neatly over every period.

My case is about reducing dependence on a single set of promises. Keeping all long-term reserves in currency exposes their future usefulness to the purchasing power that currency retains.

Holding some physical gold provides another foundation.

### What are you trusting?

Cash has a job. It pays bills, meets emergencies and keeps everyday life moving. But usefulness today does not establish suitability for preserving wealth over decades.

For that longer task, I favour an asset that cannot be manufactured to make an inconvenient obligation easier to meet.

Gold will not eliminate uncertainty. It gives its owner a form of wealth that does not rely on a promise to pay.

After a lifetime spent earning, building and saving, that is a quality worth taking seriously.

**You worked for your wealth. The currency you measure it in should not be allowed to quietly undo that work.**

### About the author

Matthew Jones is Co-founder and Precious Metals Analyst at Britannia Bullion. His commentary explores physical gold, monetary policy and the challenges of preserving purchasing power over time.

### Disclaimer

This article expresses the author’s opinions and is intended for general information. Britannia Bullion sells physical precious metals and has a commercial interest in gold ownership. This is not personalised investment advice or a recommendation to buy or sell. Gold prices can fall as well as rise; past performance is not a reliable indicator of future results. Physical gold produces no income and involves purchase, storage and sale costs. It does not guarantee protection against inflation or loss.

### Sources

1. Federal Reserve History: Nixon Ends Convertibility of U.S. Dollars to Gold and Announces Wage/Price Controls — [https://www.federalreservehistory.org/essays/gold-convertibility-ends](https://www.federalreservehistory.org/essays/gold-convertibility-ends)
2. Bank of England: Inflation and the 2% target — [https://www.bankofengland.co.uk/monetary-policy/inflation](https://www.bankofengland.co.uk/monetary-policy/inflation)
3. Bank of England: Quantitative easing — [https://www.bankofengland.co.uk/monetary-policy/quantitative-easing](https://www.bankofengland.co.uk/monetary-policy/quantitative-easing)
4. World Gold Council: The case for a strategic allocation to gold — [https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset](https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset)
5. World Gold Council: Potential risks and challenges — [https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset/risks-challenges](https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset/risks-challenges)

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