M2 Money Supply surged 162% in 15 years! The central bank stocks 53 tons of gold to hedge against financial storms

In November 2025, central banks worldwide added a net 53 tons of gold, a quarterly increase of 36%. Gold prices have surpassed previous peaks more than 50 times this year, with a total return of over 60%. Behind these anomalous figures lies a deeper warning: the uncontrolled growth of M2 money supply. During the 2008 financial crisis, the US M2 was only $8 trillion; by 2023, it soared to $21 trillion, a 162% increase over 15 years.

The Monetary Crisis Behind M2 Out of Control

M2 money supply is a key indicator measuring the total circulating money in an economy, including cash, demand deposits, and time deposits. When M2 grows much faster than GDP, it indicates the purchasing power of money is being diluted, which we commonly call inflation. From 2008 to 2023, US M2 skyrocketed from $8 trillion to $21 trillion, a 162% increase, while GDP only grew about 50%. This widening gap means the actual purchasing power of each dollar has decreased by about 70%.

This explosive growth of M2 is not unique to the US. The European Central Bank, Bank of Japan, and People’s Bank of China have all expanded their balance sheets massively over the past 15 years through quantitative easing (QE), injecting liquidity into the markets. After the outbreak of COVID-19 in 2020, central banks worldwide even adopted an “infinite QE” mode, causing the M2 growth curve to rise almost vertically. This unprecedented monetary expansion is a price paid by central banks to rescue their economies.

However, printing money is not without costs. As more money floods the market and supply of goods and services cannot keep pace, inflation becomes inevitable. A more intuitive example around us: in October 2000, 100,000 yuan could buy a house in second- or third-tier cities; now, 100,000 yuan is not even enough for a down payment. In 2010, a bowl of beef noodles cost 5 yuan; now, it costs 15 yuan—tripling in a decade. Can your salary growth keep up with rising prices? Many believe “working hard and saving is enough,” but they fail to realize that savings are quietly being “confiscated” by inflation.

The frantic gold purchases by central banks are precisely a response to the out-of-control M2. When they themselves no longer believe in the long-term value of fiat currency, they turn to tangible assets like gold. The record for a single month’s gold accumulation in November 2025, with an increase of 53 tons, sends a very clear message: central banks with printing presses are selling fiat and buying gold. Should ordinary people still hold on to paper currency?

The 1933 Gold Confiscation: Legal Wealth Transfer

On October 29, 1929, the New York Stock Exchange crashed, with the Dow plunging 12% in a single day. Over the following three years, the index fell from 381 to 41 points, a decline of over 89%. Thousands of banks failed, 15 million people lost their jobs, and unemployment soared to 25%. This was the shockwave of the Great Depression, whose core problem was gold trapping the currency.

At that time, the US was on the gold standard, with the dollar directly pegged to gold at a fixed rate of $20.67 per ounce. As economic panic worsened, people desperately wanted to convert paper money into gold and hide it. In just two years, private hoarding of gold reached $400 million, accounting for one-third of the US currency in circulation. As the money supply shrank, a deflation crisis erupted: prices fell by 50%, companies couldn’t recoup costs, and many had to lay off workers or go bankrupt.

On April 5, 1933, President Roosevelt signed Executive Order 6102: all Americans were required to surrender their gold coins, gold bars, and gold certificates to banks within 30 days in exchange for paper currency. Violators faced fines of $10,000 (equivalent to about $250,000 today), ten years of imprisonment, or both. This “nationalization” of gold resulted in the government reclaiming about 500 tons, worth $2.8 billion at the time, equivalent to roughly $70 billion today.

More astonishingly, only nine months later, Roosevelt issued another law devaluing the dollar against gold from $20.67 to $35 per ounce, a 40% depreciation of the dollar. The government used the devalued dollars to buy back the same gold, which was then used as reserves to print large amounts of new money. As the money supply increased, the market “recovered”: prices rose, businesses resumed operations, and employment returned. By 1937, US GDP had grown by 50%, and unemployment dropped from 25% to 14%.

The Three Layers of Wealth Transfer

First layer, forced centralization: The government consolidates dispersed gold holdings from citizens into the national treasury via executive orders.

Second layer, currency devaluation: The dollar-to-gold exchange rate is devalued by 40%, causing immediate loss of purchasing power.

Third layer, money printing dilution: Using gold reserves as collateral, large amounts of currency are printed, further diluting the value of money.

A tailor in New York, John, saved 10 ounces of gold, which could have exchanged for $206, enough to support his family for a year. After being forced to convert to paper money, within nine months, his purchasing power shrank by 40%. Meanwhile, the Morgan and Rockefeller families moved large quantities of gold overseas through foreign companies, and after the dollar devalued, they bought more assets with the devalued dollars, widening the wealth gap.

Invisible Confiscation: M2 Growth Equals Wealth Dilution

Today, 90 years later, we no longer worry about the government confiscating gold, but a more subtle form of “wealth harvesting” is happening—it’s inflation. “Printing money to stimulate the economy” has become a routine response of governments worldwide. During the 2008 financial crisis, US M2 was only $8 trillion; by 2023, it soared to $21 trillion, a 162% increase; during the same period, gold prices rose from $800 to over $2000, reflecting the continuous decline in paper currency’s purchasing power.

This is fundamentally similar to Roosevelt’s gold confiscation 90 years ago—governments shifting economic crises through monetary means. Some say “buy stocks and funds to resist inflation,” and indeed, they sometimes perform well, but more often they decline, leading to losses. In 2022, the Nasdaq plunged 33%, and average investors chasing gains and panic selling often lost everything. Conversely, wealthy individuals can hedge risks through hedge funds, offshore trusts, and complex tools, while ordinary people can only passively suffer the erosion of wealth.

In November 2025, central banks added 53 tons of gold—an abnormal behavior sending a clear signal: central banks with printing presses are selling fiat and buying gold. When those responsible for monetary policy are fleeing their own currencies, this vote of distrust is more convincing than any economic data.

Three Strategies for Ordinary People to Protect Wealth

Over 90 years have passed, and the world has changed, but the rules of the wealth game have never changed. When economic crises hit, ordinary people’s wealth often becomes the price of “stability,” with the means shifting from “direct confiscation” to “inflation dilution.” Complaining is useless; understanding the logic and planning ahead is key. Based on M2 growth trends and current environment, here are three practical suggestions:

First, on the defensive side, build a “risk-resistant core.” Don’t put all your money into high-risk markets, and don’t keep everything in banks earning interest (since inflation will eat into returns). It’s recommended to keep 3 to 6 months of living expenses as emergency funds, stored in money market funds for liquidity. Then allocate 20% to 30% of assets into low-risk investments such as stable insurance products, serving as a “safety cushion.” Also, ensure basic insurance coverage: health insurance, million-dollar medical insurance, and accident insurance—illness and accidents are the most common black swans that can break your wealth stability.

Second, on the offensive side, replace “blind speculation” with “moderate diversification.” Don’t expect to get rich overnight from stock or fund trading, and avoid leverage. Allocate 30% to 40% of funds for aggressive investments: dollar-cost averaging into broad-based index funds to spread risk over the long term; include small amounts of gold ETFs as hedges against inflation and extreme risks. For real estate, abandon the mindset of “buying houses must rise in value,” and focus on core urban properties for preservation, but be cautious with suburban or third/fourth-tier city properties.

Third, at the core level, invest in “your irreplaceable self.” The essence of the wealth game is never about “protecting a certain asset,” but about “keeping up with changing rules.” Ninety years ago, gold was confiscated; today, deposits are diluted; stocks and funds may be trapped. In this changing world, the real risk is not fierce competition but being stuck in algorithms, unaware of world changes.

What we need is not just theories but executable experience and skills. Success = Luck + Skill. We cannot control luck, but we can improve decision quality through skill development and win back more initiative from the hand of the probability god. When M2 continues to spiral out of control, the only moat is your ability that cannot be replicated by printing presses.