IESET.
Hypotheses·monetary·fiat_expansion_erodes_currency_purchasing_power_long_run

Over 50+ year horizons since the 1971 collapse of Bretton Woods, major fiat currencies (USD, GBP, EUR legacy components, JPY, AUD) have lost substantial purchasing power against hard assets (gold, broad commodity baskets, residential real estate).

This is documented fact; the hypothesis re-establishes the pattern using provenanced public data.

SUPPORTEDengine/runs/fiat_expansion_erodes_currency_purchasing_power_long_run

SUPPORTED — 7/7 fiat currencies lost purchasing power against at least one hard-asset benchmark

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

In ordinary language

In plain terms, this asks whether the policy story survives a real-world data check from 1971 to 2025.

plain answer

The data clearly moved in the predicted direction. 7/7 fiat currencies lost purchasing power against at least one hard-asset benchmark

why it matters

This matters because monetary claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 7 country or place units from 1971 to 2025, using a descriptive design, with fixed effects for country.

what was measured
What we checked
  • Currency purchasing power vs gold
  • Currency purchasing power vs real estate
  • Currency purchasing power vs commodity basket
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/fiat_expansion_erodes_currency_purchasing_power_long_run
1007550250197119982025USAGBRDEUFRAITAJPNAUS
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show currency_purchasing_power_vs_gold across 7 sampled countries over 1971–2025.
The shapes above are stylised — none of the lines are real data.
Placeholder for fiat_expansion_erodes_currency_purchasing_power_long_run. Published chart will be generated from engine/runs/fiat_expansion_erodes_currency_purchasing_power_long_run/chart_data.json.

Who has skin in the game — schools predicting on this

3 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if SUPPORTEDschool supportedChicago School Monetarismwins if SUPPORTEDschool supportedClassical Liberalwins if SUPPORTEDschool supported

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-05-17T07:59:46Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Over 50+ year horizons since the 1971 collapse of Bretton Woods, major fiat currencies (USD, GBP, EUR legacy components, JPY, AUD) have lost substantial purchasing power against hard assets (gold, broad commodity baskets, residential real estate). This is documented fact; the hypothesis re-establishes the pattern using provenanced public data.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if any of the seven listed fiat currencies maintained or gained purchasing power against all three reference assets (gold, real estate, commodity basket) across the 1971-2025 period.

formal test & threshold
test:      currency_purchasing_power_trajectory
threshold: End-of-period index < 100 (base 1971 = 100) against at least one of gold/RE/commodities for every currency

Method

Template
descriptive
Fixed effects
country
Clustering
country
Sample
7 countries · 1971 – 2025
Evidence type
descriptive

Descriptive long-run index construction + panel regression of log purchasing-power index on time, by country. No causal claims; objective is to establish the pattern with provenance.

Data

VariableSourceTransform
currency_purchasing_power_vs_gold
outcome
fred:GOLDAMGBD228NLBMtier 1
bis:WS_EERtier 2
real_index_base_1971
currency_purchasing_power_vs_real_estate
outcome
bis:WS_SPPtier 2
shiller:home_price_indextier 3
real_index_base_1971
currency_purchasing_power_vs_commodity_basket
outcome
imf_pcps:PALLFNFtier 1
fred:PPIACOtier 1
real_index_base_1971
gdp_per_capita_real
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
—

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — fiat_expansion_erodes_currency_purchasing_power_long_run

Verdict: SUPPORTED — 7/7 fiat currencies lost purchasing power against at least one hard-asset benchmark

Pre-registration

  • Claim: Over 50+ year horizons since the 1971 collapse of Bretton Woods, major fiat currencies (USD, GBP, EUR legacy components, JPY, AUD) have lost substantial purchasing power against hard assets (gold, broad commodity baskets, residential real estate). This is documented fact; the hypothesis re-establishes the pattern using provenanced public data.
  • Falsification rule: Not supported if any of the seven listed fiat currencies maintained or gained purchasing power against all three reference assets (gold, real estate, commodity basket) across the 1971-2025 period.
  • Falsification test: currency_purchasing_power_trajectory

Comparison

  • shape: fiat_hard_asset_endpoint_check
  • countries_tested: 7
  • countries_passing_any_asset: 7
  • rule: end-of-period purchasing-power index < 100 against at least one hard-asset benchmark
  • rows: [{'country': 'USA', 'assets': [{'asset': 'commodity_basket', 'publisher': 'imf_pcps', 'start_year': 1990, 'end_year': 2025, 'asset_ratio_end_to_start': 3.0656722691538576, 'purchasing_power_index_end': 32.61927277947442, 'passes': True}, {'asset': 'real_residential_property', 'publisher': 'bis', 'start_year': 1971, 'end_year': 2025, 'asset_ratio_end_to_start': 4.584818648896271, 'purchasing_power_index_end': 21.81111351570548, 'passes': True}], 'passes_any_asset': True}, {'country': 'GBR', 'assets': [{'asset': 'commodity_basket', 'publisher': 'imf_pcps', 'start_year': 1990, 'end_year': 2025, 'asset_ratio_end_to_start': 3.0656722691538576, 'purchasing_power_index_end': 32.61927277947442, 'passes': True}, {'asset': 'real_residential_property', 'publisher': 'bis', 'start_year': 1971, 'end_year': 2025, 'asset_ratio_end_to_start': 7.171745106764663, 'purchasing_power_index_end': 13.943607659128347, 'passes': True}], 'passes_any_asset': True}, {'country': 'DEU', 'assets': [{'asset': 'commodity_basket', 'publisher': 'imf_pcps', 'start_year': 1990, 'end_year': 2025, 'asset_ratio_end_to_start': 3.0656722691538576, 'purchasing_power_index_end': 32.61927277947442, 'passes': True}, {'asset': 'real_residential_property', 'publisher': 'bis', 'start_year': 1971, 'end_year': 2025, 'asset_ratio_end_to_start': 1.6634249662849847, 'purchasing_power_index_end': 60.1169286423152, 'passes': True}], 'passes_any_asset': True}, {'country': 'FRA', 'assets': [{'asset': 'commodity_basket', 'publisher': 'imf_pcps', 'start_year': 1990, 'end_year': 2025, 'asset_ratio_end_to_start': 3.0656722691538576, 'purchasing_power_index_end': 32.61927277947442, 'passes': True}, {'asset': 'real_residential_property', 'publisher': 'bis', 'start_year': 1971, 'end_year': 2025, 'asset_ratio_end_to_start': 4.234610494551768, 'purchasing_power_index_end': 23.61492281962168, 'passes': True}], 'passes_any_asset': True}, {'country': 'ITA', 'assets': [{'asset': 'commodity_basket', 'publisher': 'imf_pcps', 'start_year': 1990, 'end_year': 2025, 'asset_ratio_end_to_start': 3.0656722691538576, 'purchasing_power_index_end': 32.61927277947442, 'passes': True}, {'asset': 'real_residential_property', 'publisher': 'bis', 'start_year': 1971, 'end_year': 2025, 'asset_ratio_end_to_start': 4.162785641482327, 'purchasing_power_index_end': 24.022375546676233, 'passes': True}], 'passes_any_asset': True}, {'country': 'JPN', 'assets': [{'asset': 'commodity_basket', 'publisher': 'imf_pcps', 'start_year': 1990, 'end_year': 2025, 'asset_ratio_end_to_start': 3.0656722691538576, 'purchasing_power_index_end': 32.61927277947442, 'passes': True}, {'asset': 'real_residential_property', 'publisher': 'bis', 'start_year': 1971, 'end_year': 2025, 'asset_ratio_end_to_start': 1.548655215321835, 'purchasing_power_index_end': 64.57215202624583, 'passes': True}], 'passes_any_asset': True}, {'country': 'AUS', 'assets': [{'asset': 'commodity_basket', 'publisher': 'imf_pcps', 'start_year': 1990, 'end_year': 2025, 'asset_ratio_end_to_start': 3.0656722691538576, 'purchasing_power_index_end': 32.61927277947442, 'passes': True}, {'asset': 'real_residential_property', 'publisher': 'bis', 'start_year': 1971, 'end_year': 2025, 'asset_ratio_end_to_start': 6.406594383957958, 'purchasing_power_index_end': 15.608917001269646, 'passes': True}], 'passes_any_asset': True}]

Variables resolved

  • fred:GOLDAMGBD228NLBM; bis:WS_EER → currency_purchasing_power_vs_gold (outcome, publisher=bis, n=2922)
  • bis:WS_SPP; shiller:home_price_index → currency_purchasing_power_vs_real_estate (outcome, publisher=bis, n=2272)
  • imf_pcps:PALLFNF; fred:PPIACO → currency_purchasing_power_vs_commodity_basket (outcome, publisher=imf_pcps, n=37)
  • world_bank_wdi:NY.GDP.PCAP.KD → gdp_per_capita_real (controls, publisher=world_bank_wdi, n=14066)

Generated by scripts/run_descriptive.py at 2026-05-17T07:59:46+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Per mega-spec D.1.5 scope decision, this hypothesis does NOT claim that a gold standard would have produced better outcomes than the post-1971 fiat regime — that claim is explicitly out of scope. The descriptive pattern of purchasing-power erosion is compatible with many possible normative conclusions.

Authored framework. Read the transparency note.