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If you go by the official numbers, the inflation spike of 2022 may feel like a thing of the past. But according to legendary investor Rick Rule — former president and CEO of Sprott U.S. Holdings — the U.S. dollar’s erosion in purchasing power is far from over.
The culprit, he says, is America’s massive and growing debt burden.
“The net present value of off-balance-sheet liabilities, which is to say Medicare, Medicaid, Social Security, federal pensions, military pensions — the net present value of unfunded federal promises in the United States exceeds $100 trillion,” Rule said in a recent interview with Kitco.
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While the official U.S. national debt currently stands at $36.22 trillion, some experts estimate that unfunded liabilities are upwards of $70 trillion, pushing the total past $100 trillion.
Rule warns that serving that debt will come at a cost to everyday Americans.
“We will have to allow the purchasing power of the U.S. dollar to decline so that we can honor our nominal debts while not honoring our real debts,” he explained in the interview. “I believe because of this $100 trillion in unfunded entitlement liabilities, that the U.S. dollar will lose 75% of its purchasing power over 10 years.”
It’s a stark outlook — but not without precedent. Rule pointed to the dollar’s steep decline in the 1970s as an example of how quickly purchasing power can evaporate.
After all, $100 in 2025 has the same purchasing power as just $12.05 in 1970, according to the Federal Reserve Bank of Minneapolis inflation calculator.
Rule doesn’t save in dollars — he saves in this asset
If Rule’s prediction of a 75% drop in the U.S. dollar’s purchasing power over the next decade proves accurate, it could mean serious trouble for anyone holding the greenback. So what does he rely on?
“I maintain liquidity in things like the U.S. dollar and the Canadian dollar — I save in gold,” he told Kitco.
Gold has served as a store of value for thousands of years — and for good reason. Unlike fiat currencies, the precious metal can’t be printed at will by central banks, making it a natural hedge against inflation and currency devaluation.
Over the past 12 months, gold prices have surged by more than 40%. But Rule believes that’s just the beginning, given how much real value the dollar is expected to lose.
“I believe that over the next 10 years, gold’s appreciation, at least in nominal terms, will mirror the devaluation of the purchasing power of the U.S. dollar,” he said. “I don’t own gold because I hope it’ll go to $3,500, I own gold because I’m afraid it’ll go to $12,000.”
Considering where gold is trading today, $12,000 would represent a potential upside of roughly 250%.
Rule isn’t alone in turning to gold as a safeguard. Ray Dalio, founder of Bridgewater Associates — the world’s largest hedge fund — also sees it as a key component of a resilient portfolio.
“People don’t have, typically, an adequate amount of gold in their portfolio,” he told CNBC earlier this year. “When bad times come, gold is a very effective diversifier.”
A gold IRA is one option for building up your retirement fund with an inflation-hedging asset.
Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.
With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.
If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.
Read more: You don’t have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here’s how
A time-tested income play
Gold isn’t the only asset investors turn to during inflationary times. Real estate has also proven to be a powerful hedge.
When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts for inflation.
Over the past five years, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index has jumped by more than 50%, reflecting strong demand and limited housing supply.
One way to invest in real estate is by purchasing rental properties and becoming a landlord. But for the average American who wants to avoid the need for a hefty down payment or the burden of property management, crowdfunding platforms like Arrived make it easier to slice yourself up a piece of that pie.
Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.
The process is simple: Browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase, and then sit back as you start receiving positive rental income distributions from your investment.
Another option is Homeshares, which gives accredited investors access to the $35 trillion U.S. home equity market — a space that’s historically been the exclusive playground of institutional investors.
With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.
With risk-adjusted target returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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