The first months of 2026 have confirmed a trend that analysts have been anticipating: the degradation of the value of currencies is not a homogeneous phenomenon, but it is steadily advancing in the major global economies. We understand monetary degradation as the process by which the purchasing power of a currency is eroded, whether due to domestic inflation, depreciation against other currencies, or a combination of both.
In this article, we analyze the evolution of the last three months (December 2025 - February 2026) based on the most recent data published by central banks, statistical institutes, and international financial organizations.
United States: inflation yields, but the dollar suffers
The most relevant data of this period has been the publication of the Consumer Price Index (CPI) for January in the United States. Year-on-year inflation slowed to 2.4%, its lowest level since May 2025, which represents a relief after the previous two months with rates of 2.7%.
However, this relief in the general data hides some warning signs. Core inflation (excluding food and energy) fell to 2.5%, the lowest since March 2021, but on a monthly basis it rose to 0.3%, indicating that certain pressures persist. This moderation has been mainly due to falling energy prices (-0.1% year-on-year) and a slowdown in housing and food.
At the same time, the US dollar has shown signs of weakness. According to analysis from Bank of America, the dollar index has fallen more than 10% over the past year, and concerns about "affordability" and monetary policy are generating downside risks for the currency. Analysts note that investor positioning remains short on the greenback, although not as extreme as in the first half of 2025.
The structural diagnosis: debt and degradation as a strategy
To understand the context of these three months, the analysis by José Luis Cava is key, pointing to a fundamental problem: the fiscal and debt system of the United States "is broken". With a deficit of 0.7 trillion dollars in just four months and a projected debt of 64 trillion in ten years, monetary degradation is not an accident, but a planned exit.
According to this analysis, the strategy to finance the debt goes through a triple path: monetary degradation, massive debt issuance, and the sale of the narrative of accelerated economic growth supported by artificial intelligence. In this context, gold has experienced "parabolic" rises that have since stabilized, precisely to allow central banks to continue buying.
Latin America: the contrast between deceleration and persistent inflation
The Latin American landscape presents very different realities in these three months. In Mexico, the Bank of Mexico (Banxico) paused its rate-cutting cycle in February, keeping them at 7%. The decision responds to the fact that core inflation is still outside the target range, standing at 4.47% annually in the first half of January, above the upper tolerance limit of 4%.
Banxico has adjusted its forecasts and now expects to converge to the target in the second quarter of 2026, also affected by new taxes on sugary drinks and tariffs on Chinese products that could have inflationary effects.
On the opposite end, Argentina continues to face a scenario of high inflation. Inflation expectations for the next twelve months rose significantly in February, reaching a national average of 35.7%, which represents a jump of 4.2 percentage points compared to January. This increase in expectations coincides with the eighth consecutive month of CPI acceleration and with weekly increases in food prices that in the third week of February reached 0.5% only in that category.
The perception of the population reflects this reality: respondents from the Torcuato Di Tella University perceived a past inflation of an average of 38.4%, and the regions with lower incomes are the ones showing higher expectations, probably due to the greater weight of food in their consumption basket.
The pocket of citizens: when incomes do not reach
Monetary degradation has its most direct translation in the loss of purchasing power of households. In Argentina, a report from the consulting firm Empiria reveals that fixed expenses already represent almost 23% of incomes, an increase of 7.4 percentage points in two years.
In November 2025, disposable income fell by 1% in real terms, the largest decline since February 2024, marking three consecutive months of decline. All wages decreased in real terms: registered ones by 0.6% (third consecutive contraction), and those in the formal private sector by 0.3%.
Additionally, loan payments absorb 26.3% of the recorded wage bill, the highest level in almost two decades, and delinquency in bank loans reached a record 8.8%. This short-term indebtedness evidences households' need for immediate liquidity to sustain their consumption.
Europe: apparent stability with latent risks
In the eurozone, the preliminary data for February shows relative stability. The preliminary CPI indicator in Spain stands at 2.3% for February, maintaining the January rate, although core inflation rises by a tenth to 2.7%. However, the ECB has expressed concern about the risks of geoeconomic fragmentation and its impact on financial stability, which could translate into new tensions on the euro in the coming months.
Conclusion: a scenario of "capital war"
The last three months confirm that we are moving towards a scenario of global competition for capital, where monetary degradation is shaping up as a tool -implicit or explicit- to manage the swollen levels of sovereign debt.
While the United States moderates its inflation but allows some depreciation of the dollar to sustain its manufacturing and facilitate the payment of its debt, Latin America faces the challenge of containing inflationary expectations in a context of weakened real incomes. Europe, for its part, tries to maintain price stability while increasing geopolitical and trade uncertainty.
For the average citizen, monetary degradation is not an abstract concept: it translates into their incomes yielding less, their debts weighing more, and their ability to plan for the future being reduced. And according to all indicators, this trend will continue to be the dominant note in the coming months.
