Really liked this post by Sam Callahan:
A recent working paper from the IMF provides a new dataset for large currency depreciations since 1971.
The authors specifically chose 1971 because "Many consider the Nixon shock on August 15, 1971, as the beginning of the end for the Bretton Woods system."
They meticulously analyzed 163 countries and territories and concluded that there have been 905 large currency depreciations since Nixon severed the monetary system from sound money.
I'd like to highlight three points from the paper here:
1.) Currency depreciation remains as prevalent as ever.
"While 1982 Chile and 1994 Mexico may feel like remote history, large depreciations continue occurring regularly: over the last decade, there have been 131 large depreciation events, with 24 countries registering two or more, according to our dataset."
2.) No matter how seemingly strong or stable, no fiat currency is immune to large depreciations.
"Virtually no one is safe from a large depreciation. While generally associated with less advanced economies, long-industrialized and financially sophisticated economies have experienced large depreciations as well. Not even reserve currencies were spared: Switzerland had two in rapid succession (1988 and 1991), Japan had three (1982, 2012, 2022), and the United Kingdom had four, all in different decades (1976 sterling crisis, the 1992 ERM crisis, the 2008 Global Financial Crisis and the 2016 Brexit)."
3.) Few economic events are as disruptive as large currency depreciations.
"Virtually overnight, it can decimate the value of large swaths of real and financial assets, trigger insolvencies—including by banks and the sovereign—and shred the credibility of the central bank. The ensuing economic turmoil can push an entire decile of the population below the poverty line, spark civil unrest and precipitate a government change."
This dataset effectively serves as the track record of fiat currencies since 1971, and it’s one of instability, crises, and wealth destruction.
One line in particular from the report stood out to me: "Virtually no one is safe from a large depreciation."
I think it’s more accurate to say, "Virtually no fiat holder is safe from a large depreciation." For there is no safety in holding money that isn’t anchored to anything scarce and can be created at zero cost with the click of a button.
The point is, people can protect themselves from currency depreciations today.
They don’t have to sit in fiat and hope their central bank behaves. They can study this history and choose to hold hard, scarce assets that don’t depend on any issuer’s credibility to maintain their value.
People seem to forget that this free-floating fiat system we have today is one giant monetary experiment. It didn't exist before 1971, and after 54 years and more than 900 large currency depreciations, the data speaks for itself.
The Bitcoin experiment didn’t exist before 2009, but after nearly 17 years—about 30% of the fiat experiment—its track record is one of monetary stability and long-term wealth preservation.
TL;DR: Choose your money wisely.
Full paper: https://www.imf.org/en/-/media/files/publications/wp/2025/english/wpiea2025221-source-pdf.pdf
