Topic: Higher Inflation Is Here to Stay for Years (Read 716 times)

The pandemic has really made the world chaotic, there must be a right solution to overcome the pandemic, in my country the budget for health has increased by more than 10% and many budgets from other fields have to stop, even many companies have stopped because people's purchasing power is very low.

I am not sure whether 2022 will be virus free. 4 months remain in this year, and only 24% of the population is fully vaccinated. Herd immunity requires 70% to 85% of the total population to be fully vaccinated, and as you can see, we are a long way behind this target. And I don't think that the gap can be covered in the remaining 4 months of this year. And there are talks about a third booster shot, to take care of the delta variant. This will further slow down the vaccination program, especially in the third world.

According to the recent basic situation, the pandemic virus is the main reason, and the United States is still a long way from a complete recovery. In terms of inflation, in general, the current epidemic is still spreading, and the supply side is also affected. Although I think there will be particularly high sustained inflation, the overall inflation center may rise in the next two years.

While i use to think about this since the Lock down from 2020 , yet not i am considering changing my mind because the reaction of the world specially my country seems like changing the course from Pandemic to now economic meaning we are recovering and making the best for the betterment of the situation.
maybe in the next next 2022 we will be having the best result after the whole world be vaccinated and ended this damn pandemic Corona Virus.

Higher number of banknotes being printed obviously means lower purchasing power for that particular currency. It will result in higher inflation rate, and commodities and assets with limited supply will witness their prices increasing. For example, the crude oil prices have increased by almost 80% since the beginning of this year. Natural gas prices have gone up by 4 times. Even gold prices are showing an increasing trend. And I believe this was one of the reasons why BTC made such a rapid recovery.

Higher inflation is not the cause of a problem, it is the result of the problem itself. We could have very very little inflation if the money we have in the world was used properly, a tiny bit of increase is healthy because it creates a demand to grow bigger, but these super high ones are a big problem because of what we are doing with the money.

Think about it, do you really believe that Zimbabwe and Venezuela has a problem because they have high inflation, or do they have a big problem already that just has side effect of having high inflation along with it? They are corrupted and problematic places that runs everything horribly including economy and this caused high inflation, but many believe high inflation caused the problems which is false. So if we could use the money we have in every nations economy, we could have a proper inflation to go along with it.

If a country called America can experience inflation, let alone a small country. When it comes to inflation, this cannot be separated from the role of the government. The government can suppress inflation by reducing spending, so that the demand for goods and services decreases which in turn can lower prices. and preferably during a pandemic like this, it can be maximized to empower local companies, that's even better.
although in the end the government will increase the tax rate. and the people will be burdened burdened by taxes.

Indeed, a higher number of notes printed means higher BTC lols.

This scenario can change over the years, if banks go digital in full fledge. What I mean is, complete use of internet banking, Unified Payment Systems, and services like wallets etc. If this happens to be adopted by every single person in the country then we may not need cash at any place. However, this will take big infra structure, network coverage areas everywhere so that we will have online connectivity to pay the money. There is high chance of happening in the in the country like USA, because I can see big change in developing country like India that they are using UPI's at enormous rates, whether it is small hawker to big merchant everyone now has access to digital payment system.

This process will slowly discard the cash system and if "Printing Money" is associated with inflation, then this will get over if we go digital all the way.

So you are saying that the FED has the power to turn down the request from government to print more banknotes? I really suspect that it works in real life scenarios. Theoretically the Federal Reserve is supposed to be an autonomous body, but I really don't think that they have the power to over-rule government demands. And the current chairperson of the Federal Reserve (Jerome Powell), although a Republican has avoided confrontation with the Biden admin and enjoys bipartisan support.

right, bank operations are still controlled by the government, and banks must comply with government regulations, therefore they cannot act alone and must comply with regulations. maybe this is a consideration from the government which until now has not been able to legalize crypto, because the government is more difficult to control it

But the printing bill power is in the hands of FED so they decide how much bills printed every year, if they want they can limit the supply but they won't. Actually banks are individual body if I am not wrong so they are not supposed to be a puppet for the leaders action.

Why blame the banks? They are just following the orders from the government. In recent times, the government attitudes have changed. Many of the governments are trying to win electoral support by distributing freebies. And this requires huge amounts of cash. The tax rates are already high, and they can't be increased further. So the only option left is to print more and more banknotes. For the common people it means that their purchasing power goes down in the near future. But their only focus is on the temporary gains.

Inflation will never stop increasing until the banks stop printing the papers, accumulating bitcoin is a way to save yourself from the inflation trap but bitcoin is not actually created to avoid inflation at all. But inflation can be only stopped with the change in government policies and increase the cash flow in their economy instead of taking money from poor people as tax and give it to the rich people.

Prescription opioids are destroying the rural communities. Pharma giants are making tens of billions every year from it, while huge number of mostly young people die from drug overdose. In addition to prescription opioids, now they have synthetic drugs such as fentanyl and xylazine. On the other hand, the urban areas have witnessed a decline in drug addition (mostly heroin/cocaine), partly as a result of the unavailability of these drugs. But the negative here is that synthetic drugs like fentanyl are much more likely to cause overdose deaths, when compared to drugs like heroin.

For developing and poor countries, inflation will kill everyone's future there.  It puts people under extreme pressure to go to a dead end.  Inflation indirectly increases the rate of theft and social evils.  What is condemnable is that it happened before covid and now everything is just natural process, Hyperinflation will be the flame that burns after covid 19
This increases the odds of bitcoin will hitting an ATH over $100k this year.  It is not an unwarranted prediction.  Just accumulate bitcoins and erase inflation

It is true that some crises come out of nowhere and the coronavirus pandemic is one example of that, this is why they call them black swans, however not every single crises is like that, for example the crisis that happened in 2007 that put the financial system at risk all over the world was something that people have been predicting for at least a decade, however those at the top of the financial system and the governments choose to not listen to them, why? Because it was more comfortable and they believed the control they had over the economy was simply too strong.

It might be true that the stimulus checks helped out a lot of drug addicts but drug addiction in the US has been rising. Not sure if it's something in the water or what the deal is that Americans can't lay off the meth and oxycodone, but I'd make the guess that the poor economic situation and readily available drug dealers on their local corners would be the major contributing factors.

Just watch, once USD starts to collapse, you'll find more and more will turn to drugs when the economic situation turns even more dire than it is. Inflation is not supposed to be the "new normal", but some bureaucrats at the national banking institutions will tell you otherwise.

When money is cheap everyone tries to borrow as much as they can and invest it in assets that they think will appreciate faster than inflation. It's worth remembering though that pretty much every crisis in history has appeared out of nowhere and taken pretty much everyone by surprise. Just look at Covid - Bitcoin fell as much as the stock market in the early days. Inflation is bad news for everyone really, because it will ultimately cause an affordability issue for everyone who owns a mortgage (see: the majority) and will eventually lead on to a recession if ongoing inflation rises turns out to be true into the future. Let's hope supply chains settle down and Covid does not cause too much instability or even crypto holders will not be safe.

Well you said it best, this will be the best possible option in an ideal world, unfortunately we do not live in an ideal world and while there is a big segment of the population that is able to use their money responsibly there is a lot of evidence that shows that there is also a very significant group of people that are unable to do so, and what's worse this latter group is the one that needs the most help precisely because they do not know how to administer their own money.

In an ideal world, the government expects the citizens to behave in a responsible manner. It is best to provide the support in the form of legal tender, because then it is easier for the people to take care of their needs. For example, if you provide food stamps it may be useless for people who don't have cash with them to purchase medicines. So ideally, support should be given in the form of cash. But the startling fact that an addition of 30,000+ overdose deaths have been reported makes me rethink. Perhaps the ordinary citizens are not capable of spending money in a responsible manner.

They just made assumption that people were going to take care of their needs instead of their wants with the money they were given, an expectation that is completely out of place as it is obvious that there is a lot of people that are unable to control themselves and will spend that money in whatever they wanted, so it would have been better to not give that money directly the way they did, also I do not really think that the US government cares that other countries are using their currency as legal tender or as a store of value and if anything they are taking advantage of that fact.

Agreed. The government should have provided the aid in the form of food stamps, or they could have created a mechanism where the landlords would receive the due rent from the authorities. Giving hard cash as handouts has never worked anywhere in the world. It encourages all sort of unwanted behavior, in addition to increasing the inflation rate. And in the US, the government needs to be very carful. Because the US Dollar is one of the few fiat currencies that are used as legal tender by multiple countries.

While it is true that a lot of people receive money that they did not needed at the same time we cannot really say that those people that used the money to buy drugs did not actually needed that money, they just decided to use that money to buy drugs instead of using it to pay rent, which shows why it is such a bad idea to give money away in such fashion, it would have been better for the government to use that money to buy food and to give it directly to people that needed it.

The governments were just looking for an excuse to print unlimited amounts of banknotes and the COVID 19 pandemic gave them exactly that. If you look at the increase in M1 monetary supply of various fiat currencies, it is nothing short of scary. I checked the M1 supply of dozens of nations, and I saw this pattern with each of them. Governments around the world are printing money like there is no tomorrow. And anyone with a minimum intelligence would understand that this will have far reaching consequences to the economy.

Bitcoin must be a great asset to fight against hyper inflation. The simple difference of bitcoin from our fiat helped that to become possible. If bitcoin was designed with unlimited supply then probably you cannot depend on bitcoin to fight against inflation (then bitcoin and fiats may not have big differences as well ). Higher inflation is to stay with us for years as incoming days food production may diminish and economic revolutions may not happen due to lack of innovation and shortage of manpower and many other similar reasons but governments may not stop printing money whenever they need.

Inflation will always exist, but high inflation will not last long. Government spending keeps the central bank printing money, which creates inflation.
The impact of a pandemic usually causes economic struggles, especially in the form of inflation and hyperinflation. The shortage of labor, raw materials and other restrictive factors may slow down the recovery of the supply chain, thereby pushing up inflation, which may be more lasting than we expected.

The impact of stimulus measures is already visible in the US economy.

https://www.ama-assn.org/system/files/2020-12/issue-brief-increases-in-opioid-related-overdose.pdf

The number of annual deaths from drug overdose is now >90,000, after remaining somewhat stable at around 60,000 for the past many years. The reason is that a lot of people used the stimulus cheques to purchase drugs. The conclusion here is that stimulus measures have left money in the hands of people who don't really need it. And in such a situation it is only a matter of time before the inflation levels jump higher.

I doubt that many countries are going to implement lockdowns as they know the damage that they are going to do to their economy and they are not willing to do that especially when they are so indebted and they know that if they do that their economy may not recover, this means that the economic recovery that people were expecting is probably not going to happen with the intensity that they were expecting, and this is worrying because the economy was in bad shape before the pandemic and now it is even in a worse shape.

And so the reason for real estate properties skyrocketing and the big banks and financial institutions are also the ones buying these properties making the prices higher too. Inflation isn't just deliberately done but it's happening day by day even before the pandemic and the poor get poorer and the rich get richer. It was here a long time ago.

The old way to get a country richer was colonizing by means of war but it had changed these days. China is conquering without war. They just invest in different countries and buying up land.

This actually is pretty true and quite obvious. The amount of fiscal deficits that have been created by governments around the world in the past two years is honestly much more than what was created in years before that which means it would actually take a lot of time for the economy to adjust itself according to this deficit, also covid even until now doesn't look like it's ending which means in some countries there might still be some lockdowns leading to even more fiscal deficits and then the same cycle could continue even further for a longer time frame. But I am sure with an increase in inflation the interest rates would rise too and therefore investing in traditional markets would be profitable. But yes Bitcoin holders will obviously be at an edge.

I can't agree with this statement. For the last two months, the monthly inflation rate in the United States stood at 0.9%, translating to an annual inflation of 10.8%. Even if we take a very conservative scenario and take 5% as the inflation for this year, Bitcoin looks much better. If you had invested in any point of time between 2009 and 2020, you will be in profit with your Bitcoin investment right now. And your argument that Bitcoin is an asset that regularly drops by 10% is completely baseless. Short-term fluctuations are there, but in the long term Bitcoin always give good returns (at least when compared to the USD, whose purchasing power goes down by 5% to 10% every year).

Source: https://www.bls.gov/news.release/cpi.nr0.htm

OP forgot that Central Bank is also watching his activity. We shouldn't be consumed by the volatility of crypto and the immense profits we all have.
Saying hyper-deflation isn't good for everyone even if you are holding a the crypto, what's the essence of high return in profit from investment and inflation chart is linearly increasing, your investment becomes nill.
The system will adjust itself as the economy opens back to its normal state.

And how is something that regularly drops 10% in a single day a hedge against inflation of a currency that has an annual inflation rate of 2-3%?  The USD will never have periods where it devalues anywhere near the drops that bitcoin has on a regular basis.  The point of a hedge against inflation is the the volatility is less, not more.

What I have always wonder is how long is this going to continue? I say this because as you mention this inflation has been going on for decades and yet the system is still in place so while it is obvious that this cannot continue forever at the same time there is not an end in sight, so we are in a kind of a strange place, but even if the system doesn't collapse at the same time the effects can still be felt and as such it's important to hold assets that protect us against it.

This comes to no surprise since the pandemic has hit and is still hitting a lot of the world' economy and by result the finical system, and the only possible solution to immediately solve the problem is to print more money, and i am pretty sure that  this going to go on for a couple of years, so the best solution for us is to keep our trust in bitcoin to be our savoir against this inflation

People are afraid of going against the herd, if most people have a particular belief then they are going to share it as they do not want to be wrong, it takes courage to see what is happening and think that it is all wrong, after all most of the people will tell you that you are the one that is in the wrong as this is the way things are, but it is always the same story, the great discoveries and inventions are not made by the people that think everything is right and instead are made by those not afraid to be called crazy by their peers, so this is nothing new and it will probably continue as long as humanity exists.

Such is the condition of the people now, they are much more worried when the media starts to talk about it while bitcoiners have long been voicing that inflation has undermined the economy of the lower classes.  Meanwhile, crypto has given tangible results that it is going against the old paradigm where governments regulate inflation as they wish.

Isn't it funny how people are worried about inflation now?

It's almost like they have selective amnesia. If they hear inflation fears from bitcoiners (and they have, for 10 years), then they automatically deem us the radicals who are just spewing garbage to fulfill agendas. Whilst if they hear from mainstream media, they panic and start raising their inflationary expectations too.

Anyway, the period of deflation/low inflation is transient and now that is gone. This inflationary period is naturally reflective of the Fed and other central banks' wild policies during the pandemic. I don't know why anyone should be surprised.

BTC is still a great hedge against this, nothing has changed on that front.

Inflation happens because money is hard to trace, so instead of reinstating old banknotes that are still in the system but is left out of the circulation, they will print more banknotes to accommodate the supply needed by the public. Not to mention excessive printing of cash during this pandemic. Until we find a way to make money traceable, or at least irreplaceable, Inflation will always be here to stay. Now in the case of bitcoin, this is where it shines the best because even though there are unused coins that are left in circulation, there is little worry about inflation because no more bitcoins will be created besides the 21 million that are there from the start. I agree, but then again we have to consider the fact that with all the banknotes and currencies that are released in circulation, a huge number of them won't be reinstated into the system, hence prompting the central bank/federal bank to create more banknotes to make up for the lack of supply. This will keep on going.

Not really, the middle class is the one that is the most affected by inflation, I am not saying that those with low income are not affected, they are, but not on the same level as the middle class, the rich are not that affected because a great deal of their wealth is not on cash but in assets that can create a hedge against inflation and in many instances they benefit from it, those with low income are not as affected as they did not had that much money to begin with, but the middle class is the one that losses the most as they are indebted and have most of their equity on their homes which they lose because of the higher interest rates while also losing their savings as the inflation destroy their purchasing power.

I agree, not doing anything won't solve the problem but instead will cause the problem to get bigger to the point that a collapse or long-term fix is the only choices for the government to deal with the hyperinflation.

"An asset needs to have a value that doesn't go down drastically in the long term to be used as a store of value."  If that's your criteria, there's no possibly way you can view bitcoin as a better store of value than the dollar.  The dollar depreciates very slowly and rather predictably.  Bitcoin depreciates very rapidly and without any predictability whatsoever.  There's no possible comparison between bitcoin and the USD in terms of what is a better store of value, it's unequivocally the USD.

The pandemic has caused so many challenges that almost every country in the world faced unprepared. Almost everyone has not anticipated the huge effect a pandemic may bring. Hence, it was such a difficult struggle for the majority, particularly to the developing and third world countries to cope up with the negative impact of the virus on the country's state and to its economy. Inflation is really expected to happen because the safety protocols and measures imposed were a disadvantage to the economic aspect of the country. The lockdowns, social distancing protocols in every place, travel restrictions, the closing of businesses, and job losses contributed a large percentage to the inflation rise after several years. The debt of the country made it even worse because they can hardly pay on time resulting in higher interest rates.

However, despite the negative effects of the pandemic crisis such as higher inflation, it won't last permanently. The higher inflation rate is just temporary - a repercussion of the actions done in response to the pandemic which can later be lowered the moment the economy will bounce back once again. It's just that the burden to the less fortunate ones will be a little heavier compared to those who belong to the upper bracket of the society given that the former barely have the means to survive and the latter are privileged enough to buy all the things they need without breaking their pockets.

If there was a plan, it had to be started way back before the pandemic blew up. It's only now that the Biden administration started planing out something like bringing the jobs back to US. They did have plans for infrastructures now, it's almost too late, carrying that plan out will be a race against time. US have not built a train for years while a train is essential to building a country, in fact, they united east to west by building their first railroad. If they didn't stop innovating just like the Chinese, the devastation isn't this big.

Agriculture should solve almost anything but the drought is adding to the effect of the pandemic. They've adjusted the stimulus to $600 but this will change the way of life.

Low income people have more to do with inflation because they are more affected than this that is why inflation is called the silent killer of the economy. Even if the income does not increase it is also called compulsory tax as it costs more money to buy the same product than before it is inappropriate to impose taxes that are not represented. Inflation is a big obstacle for monetary policy keeping inflation in check could force the economy to withdraw support which could push the economy back into recession.

Inflation in the United States may cause a global economic crisis, but rainbows often appear after storms. As the epidemic continues to develop, Bitcoin’s position will be consolidated. When people panic and worry, I think this is also a great historical opportunity. Heroes often appear in troubled times. Hold the Bitcoin in your hand. Don't wait for the storm to return to calm, but you have nothing to do with the arrival of the digital world.

Well I guess it's now official if the Wall Street Journal said it.  Lol. 

Not that I doubt what they're saying in the least, because I and many others on this forum have been expecting a ramp-up in inflation for quite some time now.  We all knew there were going to be consequences for the money printers going brrrrr, all the unemployment assistance, the stimulus checks, the out-of-control spending, etc.  There's no way we weren't going to see chronic inflation.  And who's going to be the real victims of all this?  Our kids and grandkids.  I don't need the WSJ to tell me that they're fucked and are going to have to clean up the mess made by the politicians of this generation.

My advice?  Get out of cash and into some investments or at least something that hedges against inflation.  I'm not sure if precious metals are worth looking into, but bitcoin is certainly an option--even with its notorious volatility.  With all the institutional buying that's been going on, and the price being relatively stable despite its drop from the ATH, I'd bet it's poised to go much higher than it's at right now.  Spend that cash you have, and save only enough to get you through an emergency.  Any excess cash should be converted to other things IMO.

But that is because most of that money went to the markets and did not went to actually buy goods and services, this is why the inflation has not shown its ugly head yet but it will, this is very similar to what happened to Germany during WWI, the German government printed a lot of money and the price of goods went down even with the huge scarcity they had and this was because people were keeping their money under their beds, but when the war ended and they wanted to spend that money and it entered the economy the price of everything went up and something similar could happen here.

You do realize that even if higher inflation exists, the "real" prices of general goods are actually going down or is the same for the consumers, which means that the long term affect of high inflation is actually neutral? Pre pandemic, we had  a low inflation (the good inflation) which was actually more than perfect. Right now we have a high inflation which is mainly due to the spending for economic reliefs such as stimulus and equivalents which has somewhat increased the money supply. This should just be a short term effect.

Yeah, the same bullshit excuse, it's because of the things the US does, the evil US, not because of the morons in charge
If the US was that evil why was Venezuela selling them oil till 2019 and never stopped doing so before the US said no?
If the US was so bad why was the national petroleum company of Venezuela owning refineries and gas stations (CitGo) in the US all the time?


Mexico has oil, Russia has oil, Nigeria has oil, Brazil has oil! I don't see people flocking there to live in those countries.
On the other side, we in Europe have barely any oil, yet...


Of course they will do better because socialism means ruin and poverty for everyone immediately after you run out of the money you have confiscated. Just how many times must this happen over and over to finally understand there is no way to have a rich and socialist country.
Do you know a rich socialist country? And no, Denmark is not socialist, nor is any of the Scandinavian countries!


Back in 1990 two of those African countries were above Romania and Bulgaria, while others were just 2-3 times poorer, now they are 10x, if you're going to tell me colonization has left that deep scars 40 years after independence then...how did others manage to do it?
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=1970&locations=GH-NG-BW-KE-GA-KR&start=1960
Just slide it to current days 

I believe the reason why those nations do not get proper improvement is the fact that USA ends up doing covert coup all the time. They could literally just say "pick this guy or you will starve to death" in a secret way, like just do it, and then they could end up with the one that will do the best for them.

Venezuela is a very very oil rich nation, why do you think they are facing all these troubles when all the other oil rich nations have amazing power? Simply because they have/had president that doesn't want to bow down to USA and that's it, that is the whole reason why they are doing worse right now. Put a person who loves capitalism and USA, suddenly they will do better. So, what you have to ask yourself in their situation is this; should I let USA take over the control and live a better life? Or should have my independence and starve to death? Most of the times, not a tough question to answer.

What country do you live in? you might find some data that circulates on the internet that includes information about your country's inflation rate. If you don't believe the stat that has been provided, you can always look for a better source on the web that can give you a satisfying answer that might give you close and accurate details. But the truth whether they've released that it's only 3%, 4%, or 5%. Inflation is there to stay and it will increase no matter what the situation gets you in your country. It's a good decision that you've chosen bitcoin to beat inflation but there are also other investments that have the same purpose as bitcoin.

It would subside if governments stopped printing money but they do not so and as such it is going to continue, also it can end in two ways, the first one is already mentioned above and that is the best case scenario, the other path is that governments keep printing money and the hyperinflation keeps growing to the point their currency becomes useless and people decide to use a foreign currency or the government needs to create a new currency and do things right by not printing their currency like there is not tomorrow.

There's truth in that.
Official numbers, be it level of employment or inflation, is quite often below reality.

The monetary system of government and central policy design has an immense effect which has birth inflation since the inception of money/fiat system as means of exchange.
It has been neglected for so long which I think even if they plan to provide a solution, it may lead to collapsed as I don't think FED can go without printing of $$ to survive the economy. We all see that during the pandemic when Trump fingers were showering money through pandemic release.
The last brrr has affect a common commodity you find out today. My question now is, what's the solution to cure this problem?

The problem is with the way they calculate inflation. They don't usually give a sector-wise breakup of inflation. So obviously some of the assets that are less prone to inflation (electronics, foodgrains.etc) are grouped together with assets that are prone to inflation (such as crude oil, fruits/vegetables.etc). On top of that, real estate, bullion.etc are also added in, and in times of difficult economic conditions these assets will have a negative inflation. So in general, the inflation remains at 4% or 5%, eventhough groceries and other essentials may have gone up by >20%.

Actually I can't believe inflation data that provided by government of my country. In my country, if I am not wrong the inflation is not 2% but 3% and even experts said that the inflation is 5% few years ago. I didn't check the inflation update yet but I hope the percentage is decrease. Inflation is my biggest reason to invest in bitcoin and other cryptocurrencies, I just want to safe my wealth. For me inflation is little bit like a silent killer.

save bitcoin and sell it when the bullrun occurs, I think it can avoid the inflation that is happening right now, but if we let it go I think it's still profitable. we can see in the last 10 years, the value of bitcoin is free from inflation, although high fluctuations exist in the nature of bitcoin. but if most countries accept it, I don't think the fluctuation is as big as it is now

I slightly disagree. An asset needs to have a value that doesn't go down drastically in the long term to be used as a store of value. If the value goes up in the long-term, then it is not an issue. And I don't think that stability and predictability needs to be there. If that is the case, then even gold can't be termed as a store of value. Because during the 2011-16 period, gold prices went down by 40%. If you talk about US treasury bonds, then in fiat terms the value is stable. But the returns are only around 1.1%-1.2% per year, while the current inflation rate is in the 5%-6% range.

More people say store of value now than ever before, but my point about that would be the same.  An asset needs to have a reliably predictable and steady value to be a store of value.  Bitcoin I wouldn't say fits due to its extreme volatility.

I do, and you don't. My title is a citation.

Wot? Haven't they recently told us that the inflation was transitory? Maybe what they really meant was it is transitory from low inflation to hyperinflation  What I really know is that you can't trust a damn word coming from a FED chairman's mouth. They are all muppets. How can you expect transitory inflation when you printed 2/3 of the total USD reserves in one year? 

BTC does have the function of storing value, even other functions such as speculation and transactions.  That is the basis of BTC being considered a currency, but what continues to be a problem today is the uniqueness of this currency which lies in a decentralized system and makes economists bothered especially those who are very pro-banking concepts.  If all countries support BTC then their fiat will not sell in society, and people's current wealth will be converted to BTC, won't that disturb many people who are already in their comfort zone.

Federal interest rates are going to stay low for years in the US, but I'm convinced that there is no coming back from this. You can't have the world's largest economy uncontrollably print trillions of dollars and short out the labor market with unemployment checks without any repercussions. Paper money supply is too big right now. US is something at like a 5.4 percent inflation rate according to the CPI -- target is about 2 percent yearly (a 2 percent interest rate is healthy, incentivizes spending so people are not holding onto currency, federal banking institutions consider 2 percent to be good for the economy), so on the road to tripling the target range.

yes that's right, I have read several articles about long term inflation due to the pandemic not true. inflation may only be a few years after the pandemic is over inflation will decline. I think this is normal because the market is not developing well and global economic conditions are also affected

You don't know what you're talking about in your title OP, it's going to eventually subside, it's just that at this point we just can't see it so we think that there's no end to it. There's a lot of hyperinflation throughout history and all of them seem to subside in time and the country that was affected did recovered from the damage.

There is something much worse than inflation per se, and that is war - so I can say that I have personally felt both evils on my skin, and if you ever wonder if it is harder to be hungry or to be in constant fear of death coming from the sky, you're actually just wondering what will kill you first. Such experiences help me a lot today to look at the current situation from a completely different perspective, because everything that is happening is so harmless given what I have experienced in the past.


I can only say that Europeans are largely responsible for the fate of these people, although some will say that it was a long time ago - but the consequences of Spanish and Portuguese colonization have left an indelible mark. Resource-rich countries like Venezuela should prosper in every way, and that's not the only case when we talk about Central or South America - aside from the corrupt politicians everywhere, it's hard for me to understand that nothing has changed for the better there for centuries.

As for emigrants who send money home, I can only say that some nations in the EU are also recording record inflows of money into domestic banks - even to the extent that they are trying to come up with some extra tax on all that money.


Of course, people always go for better jobs and opportunities, but small countries pay a big tribute to mass emigration, which is most manifested in the demographic collapse and survival of the pension system in the future.

I see 2 causes for the rise of inflation.

The obvious first cause is government' spending. Central banks have been printing money like there's no tomorrow, and this just can't go on forever.

But a second problem is with many shortages. I'm always watching closely the automotive industry, and it's facing hard times because of a shortage of chips. Nobody had seen that coming, but the result is that car prices are on the rise. There's also a home shortage because of scarce supplies in several countries, so houses prices are also on the rise, and much more than 3% per year. I've also noted this article a few days ago:

https://fortune.com/2021/07/08/steel-prices-2021-going-up-bubble/

Steel prices have more than doubled in a single year. Copper price is also red hot because of the surging demand for electric cars. I don't know when this will end, I guess nobody knows, but those are many signs that inflation will only get stronger.

The inflation, it won't be gone and it's going to happen for each country unless that country will perform very well and won't have that increase in inflation.

It's the cycle, the inflation will increase but to decrease it will be hard or at least won't happen.

While there's inflation, as long as you hold bitcoin, it's one of the ways to beat it.

yes I agree with you, but in my opinion bitcoin is a store of value. Store of value itself is something that does not depreciate over time. Usually this medium store of value is rare and cannot be easily devalued. This is what causes Bitcoin to be categorized as a store of value. The best thing you can do with bitcoins is store them so you can protect yourself from inflation. Even though bitcoin is volatile, if it is withdrawn over a longer period of time (logarithmic chart), the value of bitcoin has remained or even increased drastically in the last 10 years.

Inflation of 3% over the next several years compared with the extreme volatility of bitcoin isn't even a question.  The dollar wins hands down.  Your bitcoin could be worth $40,000 next month or $20,000.  That's not protection from inflation.  To actually protect against inflation, you need something that holds a steady and predictable value.  Not that I think people shouldn't own bitcoin, but they definitely need to not delude themselves into thinking they're protecting themselves from what is ultimately still a low inflation rate by doing so.

Totally agree!
The price of Bitcoin a year ago was at $ 9,203.37 and the consumption of my basic basket has remained the same when compared to the price of bitcoin today $ 31,816.34. At least bitcoin was able to save me from inflation and allow me to buy the same groceries. I think that most of us need several sources of income in order to save a little money for the future.
Every day we can see that we need cryptocurrencies as alternatives to FiAT in order to sustain inflation.
I live in Venezuela and my testimony is the contrast of a person who supports a family of four and who eventually has to support two older adults with food. It is a tough battle but the power of God is great.

The effect would differ depending on the countries that got affected by it. The most common effect of inflation would be unemployment and in this case, a 3.2% inflation rate for a higher income country would be a child play but for a lower income country the effect would be huge. Aside from that, there could be other numerous effect that may affect the country as well.


All other currencies has been suffering from the pandemic effect as well though. The whole world needs to go back to normal or else the economy would be declining

Living in Nigeria, I can ascertain that the situation is quite bad and has been for a number of years. The naira has been losing value long before the pandemic and with a widening gap between the elite and lower class, there has been a drop is SMEs and lack of opportunities for businesses leading to higher inflation.

Corruption plays a major factor in this as fiscal policies to rescue the economy are non existent and while some Nations would recover from the effects of the pandemic, some others would not and may experience hyper inflation for a much longer time.

When you read something like this is in a mainstream media website then you know this has already been happening for some time and they are just catching up with the reality of the situation, I think the real question is if the inflation is going to get out of control during the short term? And while I do not think this is going to be the case, the economy is frail, if another black swan came and hit us I doubt the economy is going to have enough strength to resist it.

whether the inflation that will occur or that has occurred in various countries is deliberately designed to restore the economic system from zero and try to restore something that is gradually being updated.

During the pandemic, everyone was aware that big inflation was waiting, but besides that, reformers of the economic system began to be heralded and changed the conventional order to a newer system.

Prices of things would have been worst where I live, if not for people going against unreasonable lockdown to do their businesses and help keep prices of local products from going through the roof. If not for the regular business people here, prices of things would have gone above 30-50%. I was actually surprised that bag of stable food like local rice remained pretty thesame. The hardworking small and medium scale business men/women pretty much saved the situation. Thanks be to the CREATOR for doing it all.

This is a good suggestion to bring inflation down to 1% or 2% but this has not been possible to different government. In Africa for example, the inflation is over on 2 digit for the last 5years. In Nigeria, the government is talking tough on cutting inflation down as price of goods keep rising, the challenge for inflation is corruption. Paying leap service to policies contribute to lead to bad pricing.

You're just like me from this side of Europe and even without thinking twice I'm 100% sure you've had at least 2 years of inflation over 100%, so what we should know indeed is that 3% or even 10% is nothing compared to what some have experienced but at the same time that even if this inflation doubles it doesn't mean the end of the world and suddenly everybody will dump the fiat currency and embrace some other kind of monetary policy.


Maybe or maybe not.
Venezuela and even Salvador are still clinging just above full caveman style poverty because there is still a lot of cash flow from other countries like remittance and a bit of tourism, if the US goes dark that last lifeline is also cut, what will happen then?
Besides, Mexico and Brazil didn't go through a ww1 and ww2 with two atomic bombs on top of that, yet...
https://www.nationmaster.com/country-info/stats/Economy/GDP-per-capita-in-1950
Some have gone through worse times and ended up far better than others.

Anyhow, we all knew inflation was coming, even without the money printing it was clear it would happen simply because of the lack of goods, taking lumber, for example, that spike of 400% didn't happen because of money printing, it happened because of the whole manufacturing and logistic chain was almost destroyed. Inflation is here to stay, especially if we're going to experience the 4th wave with lockdowns but it's nowhere near the point of making a country collapse.

A good Store of Value and a good hedge against inflation and uncertainty, due mainly to its ideals. Best for storing values long-term rather than short-term, and the values also benefits from its "inflation-proof/deflationary" feature especially long-term.  You can also use it to exchange value with peers short-term. It should be used for what it was made for rather than to get rich quick.

It would need hyperinflation (not just "high" inflation) for fiat to fail. How much?

Source.

That said 3.2% annually is a child play.

With constant inflation, over a long period of time, the government can simply erase one digit (zero), called re-denomination. And our life will be as usual, the poor will be poorer, the rich will be richer lul.

Hate to disagree with you but I don't think so, yes inflation will stay forever but high inflation won't last for a long time unless they do something stupid or disregard the issue altogether, I think that's the only time we are going to see high inflation rate stay but governments all over the world no matter how crooked they are, they will always find a way to alleviate inflation to get it back to a normal level.

When we look at things from that perspective then maybe we can try to understand how bad the situation is in some countries, compared to what is happening in the US or the EU. Of course, it should be borne in mind that we cannot compare people in Venezuela who are accustomed to an extremely difficult life, and say the countries of Western Europe that have a standard of living unimaginable to people living in third world countries.

It is a question of survival and whether someone will be able to go on a luxury vacation or will not be able to buy a new car every 5 years. I believe they have a much better chance of surviving there despite all the challenges - anything like this in the western world would turn into a nightmare from which most would never wake up.

And who else can say that money does not grow on trees?


Source

It's not going to be that case for years, it's just there's a pandemic that there's a high inflation rate, read the basics of inflation to know that your claim isn't true, yes there's inflation for years but if that is maintained at a lower point like 1 or 2 percent, it's actually a good thing for the economy since it stimulates economic activity.

The global financial elite wants to devalue all debts by increasing inflation.
Nobody wants low inflation,because sooner or later the banks and governments with high debt rates/high budget deficits will go bankrupt.Increased money printing will give more fiat money in the hands of governments with big deficits/debt.This will postpone the upcoming financial disaster,but the standard of living of the working and middle class will go down in the next few years.
Keep on buying BTC.

Inflation is temporary:
"https://www.reuters.com/business/feds-bowman-bottlenecks-high-inflation-may-take-time-ease-2021-06-23/"
https://www.cnbc.com/2021/06/10/inflation-hotter-than-expected-but-transitory-wont-affect-fed-policy.html
https://www.youtube.com/watch?v=cI1TyZF9KA4
https://www.bloomberg.com/news/articles/2021-07-13/fed-s-daly-says-inflation-temporary-taper-may-start-by-year-end

Fun fact. Last time I was reading book called "When Money Dies" about hyperinflation in Germany after WW1. People were being scammed with the same statements. That the inflation its temporary, that its not caused by money printing. That they print more and more money because there is lack of money. That prices goes up because of greed of speculants. Because of Jews. Because of .... Never because of money printing



The fact is that if FED will say truth "inflation will kill almost ALL FIATS in next 10-30 years" it would speed up the process to 1-5 years. They have to lie.

I imagine the disappointment if people from Venezuela/Iran/Tukey are reading this!
The inflation will reach 3.2% YTD in Q4.

A full 3.2 % percent, guess it's time to pack up the shotgun and head for the woods as it's clear no economy would be able to survive this. Just to understand the magnitude of the disaster, 3.2% means in 100 years we will experience the same inflation Venezuela had in 2020 (alone) just before they were wiped out from the surface of the earth by that. Or did they survive?

The policies employed to control the pandemic were no doubt inflation-bound, such as lockdowns, printing more money etc, but I consider most of those policies to be inevitable as at when they were implemented. The effects of the pandemic generally was always going to cause economic struggle, especially in the form of inflation and hyperinflation. The thing is, diverse economies will react to this situation differently, Bitcoin serves as a hedge to inflation/devaluation in fiat currencies, but imo being a Bitcoin user doesn't mean we'll celebrate inflation, cause we're all citizens/residents of a particular country and if inflation gets worse, it'd definitely affect us all.

Having said that, I don't think countries with a really functioning economy, especially prior to the lockdown will face inflation constantly for a very long time, measures will definitely be put in place to curtail it sooner than later, underdeveloped countries would face most of the brunt of this pandemic, I mean, for some of them their economic situation was already in the mud before the pandemic kicked in, it has made things a whole lot worse, and they may have to cope with inflation for quite a long while.

I've said it for a long time, but this time, I'm not making this up. It's from the WSJ.

https://www.wsj.com/articles/higher-inflation-is-here-to-stay-for-years-economists-forecast-11626008400

BTC holders shall not worry.