How Inflation is Destroying Your Savings

Introduction: Stop Saving Money NOW

You've probably always been told, save your money, build an emergency fund, and keep your cash in the bank.

It feels safe, responsible, even smart.

But what if I told you this advice might actually be losing you money?

Here’s the uncomfortable truth: The traditional way you’ve been taught to save money is quietly losing you money year after year. And the worst part? You probably didn’t even notice it happening.

If you’re saving money the way most people do, you’re actually getting poorer. And it’s not your fault. You’ve simply been following outdated rules from a financial system that no longer works in your favor.

Why Traditional Saving Doesn't Work Anymore

Today, I'm going to show you exactly why the old-school approach to saving money no longer makes sense—and more importantly, what you can do right now to protect your hard-earned savings.

Hi, I'm Noel Lorenzana. I'm a CPA, and I recently passed the Series 65 securities exam. So let's just say I know a thing or two about money and finance. But more importantly, I’m someone who’s seen too many good people lose out because nobody explained to them how inflation was quietly destroying their savings.

Well, that ends today.

Let's Break This Down. Let me ask you a question: Would you rather have $100 today or $100 back in 1970?

Back then, a $100 filled your shopping cart. You could buy milk, bread, eggs, meat, fruit and veggies—and you’d probably still have some money left over to fill up your gas tank.

Today, a $100 barely covers a handful of essentials.

Am I right?

This is inflation at work—the slow and steady rise in prices that quietly steals your money’s buying power every single year.

Inflation or... Dollar Deflation?

Your money doesn’t physically shrink, of course—but what it can buy, certainly does. Here’s something most people don’t realize:  Inflation is also “dollar deflation.”

Might sound complicated, but it's simple.

Dollar deflation means your dollars become worth less. They’re literally being diluted—watered down by unchecked money printing.

The government floods the economy with new dollars, and basic supply and demand kicks in. The more dollars out there, the less each one is worth.

Think of it like pouring extra water in your morning coffee. Might look full, but it’s weak. The flavor—the value—is gone.

That’s exactly what’s happening with your savings.

Banks Know This—And Profit From It

Banks offer you minimal interest rates, maybe around 1% if you’re lucky, while inflation or dollar deflation averages around 3 to 4% per year, sometimes higher.

You earn pennies while quietly losing dollars.

While you're being responsible, saving money, your dollars are quietly losing their purchasing power.

And the banks? They’re well aware of it.

They’ll gladly pay you tiny returns and lend your money out at higher rates, charge you fees for the privilege of banking with them, and profit while your dollar’s purchasing power keeps shrinking.

Feels unfair, right?
That’s because it is.

Why This Keeps Happening

But why exactly does this keep happening?
Why is inflation—this quiet thief in the night—allowed to slowly drain your savings?

It wasn’t always like this.

Before 1971, every dollar you held was directly backed by real gold.
This was known as the gold standard.

Back then, your money was tied to something solid—something you could physically hold, something scarce, valuable, and trusted worldwide.

The Nixon Shock: So why did this change?

In the late 1960s and early '70s, there was growing instability with the US dollar.
The government was spending more than it could afford—especially because of expensive programs like the Vietnam War.

To cover these expenses, the US began printing more dollars than they had gold reserves to back up.

Other countries noticed. France, in particular, grew worried about the stability of the US dollar and began redeeming large amounts of US dollars for actual physical gold stored in American vaults. They even sent a warship to New York Harbor in 1965 to pick up gold bars.

This alarmed other countries. They began to question the dollar's stability as well.

If countries kept exchanging their dollars for gold, the US gold reserves would rapidly disappear—seriously damaging confidence in the dollar.

To prevent this, in 1971, President Nixon made a dramatic move. He announced the United States would no longer redeem dollars for gold.

This event became known as the Nixon Shock, officially taking the US dollar off the gold standard.

The Rise of Fiat Currency

From that moment on, dollars were no longer backed by gold or anything tangible. Instead, we moved to something called fiat currency, which is really just a fancy way to say money backed only by trust in the government.

No gold. No silver.
Just paper, promises, and ink.

The government can print this fiat currency as much as it wants, and they’ve printed trillions of new dollars into existence since then—especially recently.

When more money floods the economy, each existing dollar becomes worth less.

Simple supply and demand. The more of something you have, the less each unit is worth.

What This Means For You

The flood of dollars directly causes inflation. Prices rise. Your purchasing power falls.
Your savings quietly shrink.

Think of it like tickets to your favorite concert. If there are only 100 tickets available, each ticket is valuable. But if they suddenly print a million tickets, each one becomes pretty much worthless.

That’s exactly what’s happening to your dollars today.
Too many dollars chasing too few goods.

Unfortunately, most people haven’t realized just how serious this problem has become—until recently.

Final Thoughts

We’ve talked about inflation, dollar deflation, and the history behind why your money keeps losing value.

But what about you?

How do you feel about saving money in today’s world?
Is your cash really safe?

Let me know what you think—head over to the YouTube video and comment your thoughts.
I’d love to hear from you.