That’s the view of former Gunners defender Nigel Winterburn.
Boss Unai Emery says the club has no money to sign players on permanent deals this month.
The club are hopeful of landing Barcelona midfielder Denis Suarez on loan with a view to making the transfer permanent.
But Arsenal’s financial situation looks bleak with Mesut Ozil taking home £350,000-per-week and not even playing.
Emery wants rid of Ozil to free up his wages to be used to strengthen his squad in other areas.
Winterburn thinks his former club could find themselves trapped in limbo, below a top four of Liverpool, Chelsea, Manchester United and Manchester City.
“Obviously I don’t know the nitty gritty runnings of the football club,” he told Love Sport.
”But looking from the outside it almost seems to me that Arsenal want to be a self-funding club.
“And I’m thinking that if we want to get back to challenging Manchester City, Liverpool, Manchester United who are going to spend more money and Chelsea who will probably spend again, then we’re going to have find some money from somewhere.
“But we’re going to find ourselves in this frustrating period where we’ve made some progress but we’re still a way off challenging for the title again.”
Next season will be the first full year under sole ownership of Stan Kroenke, the majority shareholder who completed a buyout of the remaining shares in the club last year.
Kroenke’s NFL franchise the LA Rams have reached this year’s Super Bowl, but Winterburn is not optimistic that Arsenal fans will end up seeing much investment from ‘Silent’ Stan regardless of his other team’s success.
”Is the money there?” the former left-back asked.
“That’s the question we want to know because if you hear from the manager that we can only get a loan signing in January then that doesn’t suggest to me that there is lots of money around.
“Unless what they’re saying is ‘January is not the right time to go out and buy, let’s see what happens and we’ll be back in the market for the start of next season’.
“I could understand that. That would make sense. But we’re not hearing that. It’s a guessing game with Arsenal and we’ll just have to wait and see.”