Holding cash is a losing strategy because governments consistently respond to economic crises by printing money. This devalues savings, effectively forcing individuals to invest in assets like stocks simply to protect their purchasing power against inflation.

Traditional analysis links real GDP growth to corporate profits. However, in an inflationary period, strong nominal growth can flow directly to revenues and boost profits even if real output contracts, especially if wage growth lags. This makes nominal figures a better indicator for equity markets.

In an economy where currency is being systematically devalued through money printing, holding cash is a losing strategy. The only way to preserve wealth is to own a diverse basket of 12-15 uncorrelated assets (e.g. stocks, commodities, real estate) that are subject to different economic pressures.

In an economic system with persistent currency debasement, holding cash in a savings account guarantees a loss of purchasing power. Prosperity is no longer achievable through simple saving; it requires actively "betting" on assets that can't be inflated, such as stocks, real estate, or crypto.

Printing money doesn't create value; it inflates the price of finite assets like stocks and real estate. Those who own these non-inflatable assets see their net worth skyrocket, while those holding cash or earning wages are robbed of purchasing power, creating a widening wealth gap.

While stock markets appear to be reaching all-time highs in dollar terms, this is an illusion created by currency devaluation. When the S&P 500's value is measured in a stable asset like gold, it has actually declined since the pre-COVID era. This reveals that gains are not from value creation but from a weaker dollar.

Despite official CPI averaging under 2% from 2010-2020, the actual cost of major assets like homes and stocks exploded. This disconnect shows that government inflation data fails to reflect the reality of eroding purchasing power, which is a key driver of public frustration.

Despite its reputation, gold is not a reliable strategic inflation hedge, working only about 50% of the time. In contrast, U.S. equities have historically provided a 100% effective hedge against inflation over the long run, making them a superior asset class for preserving purchasing power in a diversified portfolio.

Media headlines of 10% stock market returns are misleading. After accounting for inflation, fees, and taxes, the actual purchasing power an investor gains is far lower. Using real returns provides a sober and more accurate basis for financial planning.