---
id: "claim-true-inflation-rate"
type: "claim"
source_timestamps: ["00:37:25", "00:37:38"]
tags: ["macroeconomics", "inflation", "metrics"]
related: ["concept-debasement-trade", "concept-50-percent-hurdle-rate"]
confidence: "high"
testable: true
speakers: ["Mark Moss"]
sources: ["markmoss"]
sourceVaultSlug: "mark-moss-debasement-trade-bitcoin-2026Jun25"
originDay: 5
---
# The true inflation rate (M2 growth) is roughly 40% over the last 5 years

## Claim

> The true inflation rate, properly measured as **M2 money supply growth**, is approximately **40% over the last 5 years**. The official Consumer Price Index (CPI) understates real purchasing power loss.

**Implication:** Any asset or investment that has not appreciated by at least 40% in that timeframe has actually **lost purchasing power in real terms**, regardless of its nominal gains.

## Reasoning

- Money is created via debt issuance ([[concept-debt-based-money]]).
- The denominator (money supply) is the right thing to measure if you want to understand currency debasement.
- CPI measures a politically defined consumption basket and is subject to hedonic adjustments and substitution effects.
- The 40% number is the basis for the [[concept-50-percent-hurdle-rate]] — anything below ~8% CAGR (compounded) is real-terms negative.

## Confidence: HIGH (Moss's own)

**Testability:** YES — M2 data is published by the Federal Reserve.

## Validation

- U.S. M2 surged ~25–30% in 2020 alone due to pandemic stimulus.
- Cumulative M2 increase over a 2019–2024 window is roughly in the order Moss cites (~40%+), depending on start/end dates.
- Monetarist frameworks (Milton Friedman) link sustained inflation to money supply growth.

## Counter-Perspectives

- Since the 1980s, the empirical relationship between M2 and CPI has weakened — velocity changes and financial innovation disrupt the link.
- Major central banks **do not target M2 explicitly** for this reason.
- Inflation is understood as a function of demand, supply constraints, expectations, and policy — not solely money aggregates.
- Using M2 growth as *the* 'real inflation' metric conflates currency expansion with consumer price changes — empirical CPI over the same period is substantially lower (~20%).