USD Inflation over the last century. Bitcoin can protect you even in the US.

wxa7115

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Quote from: jaysabi on June 24, 2021, 02:59:37 PM

Bitcoin fell 50% last month. What's safer, a 1-3% predictable devaluation over very long periods of time or the unexpected 50% loss that can come at any moment? In bitcoin's short life, it has a well-established history of losing bigger amounts and more frequently than the dollar's worst years throughout history. Honestly, the argument that bitcoin protects against inflation is laughable because bitcoin has to be more stable than the USD to possibly protect against USD inflation, and it's just simply not. And there's no indication it ever will be.

You are purposely taking the recent crash of bitcoin and taking the best case scenario for fiat and this is not a fair comparison, the US dollar has lost 99% of its value during the last 100 years, I do not have the data but how much value do you think the US dollar lost since the creation of bitcoin? 30%? 40%? And how much value has bitcoin won since then?

It is difficult to know this but since the first bitcoin transaction for a product was the 10k coins paid for two pizzas and assuming each pizza had a value 10 dollars then this means that each bitcoin was worth 0.2 cents and now bitcoin is valued at 33k, a growth of 16,500,00%, now that we have a fairer comparison which one would you like to have and hold for the long term?

Porfirii

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The game rules are set so there is no escape for most of us:

- You earn money = you pay taxes.
- You spend money = you lose it + pay more taxes.
- You inherit something (a house...) = you pay taxes twice, already paid by your fathers when earning and spending their capital in it.
- You save money = inflation during time + negative interest rates work as if you spent it.

There is a continuous force against the individual that in the past was tightly associated with slavery, then feudalism and finally debt, but nowadays is almost inevitable even if you manage to not get into debt, so you have to keep working heavily, and your children, and the children of your children... The idea of wealth is not for most individuals anymore.

I agree that Bitcoin, while extremely risky, could work as a counterforce. It is also known as Plan BTC.

jaysabi

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Quote from: bitmover on June 16, 2021, 12:23:03 AM

Quote

Visualizing the History of U.S. Inflation Over 100 Years

Is inflation rising?

The consumer price index (CPI), an index used as a proxy for inflation in consumer prices, offers some answers. In 2020, inflation dropped to 1.4%, the lowest rate since 2015. By comparison, inflation sits around 2.5% as of June 2021.

For context, recent numbers are just above rates seen in 2019, which were 2.3%. Given how the economic shock of COVID-19 depressed prices, rising price levels make sense. However, other variables, such as a growing money supply and rising raw materials costs, could factor into rising inflation.

To show current price levels in context, this Markets in a Minute chart from New York Life Investments shows the history of inflation over 100 years.
....

At the same time, the Federal Reserve is following an “average inflation targeting” regime, which means that if a previous inflation shortfall occurred in the previous year, it would allow for higher inflationary periods to make up for them. As the last decade has been characterized by low inflation and low interest rates, any prolonged period of inflation will likely have pronounced effects on investors and financial markets.

https://advisor.visualcapitalist.com/inflation-over-last-100-years/

We can see by the chart that US has a constant 1-3% inflation over the last decade. Somewhat controlled low inflation, but there were huge spike in the past.

Those spikes (some of them more than 15% in a year) can destroy our economic power within a short period. Also, 1-3% inflation rate every year is also consuming our buying power every year. Will we face another of those spikes soon?

I see that bitcoin rises is bringing up this discussion about inflation again, and I see this discussion all over the place.

Bitcoin fell 50% last month. What's safer, a 1-3% predictable devaluation over very long periods of time or the unexpected 50% loss that can come at any moment? In bitcoin's short life, it has a well-established history of losing bigger amounts and more frequently than the dollar's worst years throughout history. Honestly, the argument that bitcoin protects against inflation is laughable because bitcoin has to be more stable than the USD to possibly protect against USD inflation, and it's just simply not. And there's no indication it ever will be.

perfect999

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Quote from: Flexystar on June 21, 2021, 02:16:53 AM

Not sure if you guys are considering the current drop in prices of crypto or not but that does seem to me worst hit assets. I mean bitcoin itself is half the value of its ATH and the price is not two digit or three digit but it’s whooping five digits guys so it’s highly highly unstable to overcome our inflation?
I am thinking that bitcoin can not protect us in that situation.

I am able to get the frustrations of those people who bought around ATH but how about all other people who are holding bitcoins since 2011 or even from 2010? For such people, bitcoin must be helping to get protected from inflation, right?

For you, it may be a right approach to consider about ATH with respect to current price levels but for me, I am holding since 2017 and I am still into profits and I never need to worry on recent drop. So, how you are making use of bitcoin will define how much financial freedom you may enjoy against inflation and all other economic related problems.

wxa7115

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Quote from: Wind_FURY on June 18, 2021, 06:35:59 AM

The effect of the Fed’s BRRR money printing is also worse for the countries that hold U.S. Dollars in their reserves, which is ALL countries.

And it is because of this that we have seen some countries to begin to take action as the US is abusing their position of power, it is bad enough that a government can abuse their citizens but when the US government can abuse even other governments by just printing money then this is simply intolerable.

But this plays out in our favor, and it is I think one of the reasons bitcoin is now legal tender at El Salvador, the US is legal tender there as well and I am sure they were not happy with all the money that was printed, so now they took action and I will not be surprised if we see many countries following their footsteps on the near future.

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Quote from: bitmover on June 16, 2021, 12:23:03 AM

We can see by the chart that US has a constant 1-3% inflation over the last decade. Somewhat controlled low inflation, but there were huge spike in the past.

Those spikes (some of them more than 15% in a year) can destroy our economic power within a short period. Also, 1-3% inflation rate every year is also consuming our buying power every year. Will we face another of those spikes soon?

I see that bitcoin rises is bringing up this discussion about inflation again, and I see this discussion all over the place.

I invest into bitcoin basically all because of this reason. Not because it is the only way to make money, of course you can make money in different ways, as long as it is not fiat you could always make money, but fiat is not the way to make money. Buy a house? Sure. Buy gold? Sure. Buy oil/silver other assets? Sure. What you buy that is going up against the inflation works, but having fiat makes zero sense to me.

I will never own fiat as investment, that just doesn't make sense, "money" as investment doesn't make sense. My parents bought a house for 5000 in our currency 22 years ago this month, their house worths 500k in our currency right now, that is 100x in 22 years, and they are no richer now then back then, so bitcoin seemed like a better option for me, I could make 100x in a month if I am lucky with some altcoins.

Flexystar

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Not sure if you guys are considering the current drop in prices of crypto or not but that does seem to me worst hit assets. I mean bitcoin itself is half the value of its ATH and the price is not two digit or three digit but it’s whooping five digits guys so it’s highly highly unstable to overcome our inflation?
I am thinking that bitcoin can not protect us in that situation.

sana54210

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Quote from: bryant.coleman on June 20, 2021, 08:21:08 AM

I have to agree when you claim that the United States Dollar is the biggest financial fraud ever committed. The American government made the other countries to use it, by making the USD reserve and trade currency of the world. And since they are the sole issuer, now they are taking advantage of it by printing unlimited amounts of banknotes and increasing the federal debt to unsustainable levels. They don't really care whether the USD undergoes inflation. Because since it is the global trade currency, the impact of inflation will fall on everyone in the planet.

USD on default wasn't this bad thing, it was the government that made it into something this terrible. Before the second world war there wasn't really that much trouble financially or overseas, USA wasn't killing latin american presidents in 19th century as far as I can remember (I might be wrong) but eventually one by one they either killed (assassinated) the rightful presidents and installed a puppet president, or they just lost and said "I ain't playing by the rules" and put embargo on nations like Cuba and some others, that way the closest big nation would deny working with you and you would end up with a bad nation obviously, if Europe decides to embargo USA today even USA would be in big trouble.

This is just one example, they kept attacking every nation they could sink their teeth into and know they can win, have you seen USA ever declare war on a big opponent? They just financially ruin every place they can find. It is all politics, and a big shame.

bryant.coleman

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Quote from: Karartma1 on June 20, 2021, 05:10:54 AM

Then allow me to comment that you better take another round of lessons around bitcoin Wink

I mean no offence but you can't deny the fact that since bitcoin inception there hasn't been any better protection against inflation. Being deflationary by default and being compared to the biggest fraud on earth (the USD) there's nothing else to say.

I have to agree when you claim that the United States Dollar is the biggest financial fraud ever committed. The American government made the other countries to use it, by making the USD reserve and trade currency of the world. And since they are the sole issuer, now they are taking advantage of it by printing unlimited amounts of banknotes and increasing the federal debt to unsustainable levels. They don't really care whether the USD undergoes inflation. Because since it is the global trade currency, the impact of inflation will fall on everyone in the planet.

Karartma1

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Quote from: shield132 on June 20, 2021, 05:00:35 AM

I don't understand one thing, how can bitcoin help us in this situation?

Then allow me to comment that you better take another round of lessons around bitcoin Wink

I mean no offence but you can't deny the fact that since bitcoin inception there hasn't been any better protection against inflation. Being deflationary by default and being compared to the biggest fraud on earth (the USD) there's nothing else to say.

shield132

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I don't understand one thing, how can bitcoin help us in this situation? Do you look at bitcoin as an asset that rises every time and its rise will counteract the negative direction of USD?
Why is bitcoin rising? Can you give me a single reason where you can prove that 40K Bitcoin price is logical? Can't bitcoin perform well at 10K? There is just super hype around it and pure manipulation. Don't call me a BTC hater because I am not but I think that it's reality.

Btw it's just very funny, Americans don't like USD and are looking for alternatives and in some countries, people ignore their national currencies and buy as much USD as possible.
It's mostly a psychological factor to my mind. Just show people the fake positive numbers, create the strong hype and positively manipulate with the price, people will be happy but one bad/wrong news and crash will be fatal Cry

Like in Bitcoin, from 60K to 30K, 50% decline in some days. Imagine that on USD...

magneto

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Quote from: gantez on June 17, 2021, 08:11:10 AM

Quote from: magneto on June 17, 2021, 07:50:20 AM

BTC should therefore be in the portfolio of anyone who is serious about preserving their purchasing power over the long run. Gold is clunky and archaic, yet BTC has all of that and more.

But is stocking of bitcoin the solution from suffering from inflation? In the past one month, bitcoin has barely made it profit in investment for those who hodl at around $40,000/36,000. After the ATH, bitcoin has dropped maybe waiting for another round of bull. The point is reinvesting capital in other aspect like manufacturing and running SMEs can also support that an individual can have enough floating liquidity.

If you're concerned about short term volatility like this, go back to fiat and watch your savings steadily yet surely lose value.

The value of bitcoin does not come from any short term gains that it may make due to excessive volatility. Rather, it comes from the fact that it is a long term decentralised store of value and is set up in a way so that no central bank may manipulate its money supply.

You've seen how BTC has steadily appreciated over the past decade. A large portion of the gains were from new adopters, sure, but to a degree it is also showing its strength as a great long term place to park your funds.

ene1980

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Quote from: bitmover on June 16, 2021, 12:23:03 AM

~
I see that bitcoin rises is bringing up this discussion about inflation again, and I see this discussion all over the place.

The price rise in Bitcoin is not the reason some of the financial experts are talking about inflation and how it could lead us to the next recession but the actions by the government in the past one year who took major drastic decisions which will hurt the economy and the recovery process is going to take a long time and during this period some of the government were printing more money which is not going to help either.

It is really difficult to predict what the next 5 years will be, we might see another wave of the virus or a new mutation and then the economic situation is getting worse along and the unemployment rates are rising globally and the recovery wont be easy.

fiulpro

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Not entirely but if you are very much sufficient and you are able to analyze the market considering the Volatility, this makes you much more secure in this market. The general impact is more unpredictable and therefore you have to understand that bitcoins will not 100% save you from the inflation, IT CAN for sure but you have to wait for the right moment. For example people who encashed after the big crash back in 2018 suffered huge losses and if they would have waited for 2021 then it would have been much different. You need *patience*.
It might be misleading to tell someone that "bitcoins will save you from the inflation" it would be right to say "bitcoins can save you from the inflation if you play your cards right"

verita1

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Undoubtedly, the impact of the pandemic changed the consumption habits of American citizens, causing an increase in the percentage of inflation that could be temporary now that the country's economy begins to activate due to the low incidence of Covid19 cases achieved by the massive vaccination plan.
The stimulus checks in the United States have allowed the economy to be maintained, so inflation has not been felt because the prices of the basic basket have remained almost the same in reference to recent years, unlike the real estate sector that has increased.
Fortunately bitcoin is in perspective in the USA in some way to another it will contribute to the economic development in the country.

AniviaBtc

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Bitcoin is the answer to somehow fight inflation and it is really true because I experienced it in my country.

People are just lazy enough to study bitcoin and understand its importance in the economy and in the market so that we can still make profits.

Money is always inflating so it is good if you will invest something that is valuable.

Wind_FURY

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Around 40% - 50% of TOTAL AMOUNT of U.S. Dollars was printed after Bitcoin went online. YES, that much U.S. Dollars was printed AFTER 2011.

https://fred.stlouisfed.org/series/M2SL

If only someone invented a currency which the supply can’t be inflated on a whim by a cabal. Cool

Similificator

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Yup, inflation indeed is hitting the U.S. pretty bad and is affecting a lot of people in the economy at the process. And with he numbers being as big as they already are, I still think that given the state of the people, businesses and stock, the numbers may be worse than what they are actually showing and that the effects are actually heavier than what they allow to be seen. Although I cannot say this for sure, we just cannot rule out the possibility of them hiding actual numbers to minimize panic and maintain pride. Only time will tell whether this is true or not.

Wind_FURY

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Japan’s economy is probably opening up again, and close to 100%. It’s not Doom and Gloom inflation, and 20% increase of gasoline prices was the cause, but Japan has not seen inflation gains since March 2020, https://www.bloomberg.com/news/articles/2021-06-17/japan-inflation-rises-for-1st-time-since-last-march-as-boj-meets

Quote from: Coyster on June 17, 2021, 01:47:22 PM

Quote from: bitmover on June 16, 2021, 12:23:03 AM

Will we face another of those spikes soon?

Imo, I think the U.S. will, inflation is the direct consequence of most of the actions of the government to control the covid-19 pandemic, printing money is one of such actions, the initial lockdowns were also detrimental to the economy, and the effects are still being felt till date, it's pretty obvious that the inflation rate in the United States is going to go up, definitely higher than in 'normal' years.

The effect of the Fed’s BRRR money printing is also worse for the countries that hold U.S. Dollars in their reserves, which is ALL countries.

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Quote from: el kaka22 on June 17, 2021, 04:09:30 PM

Coca cola could increase EVERY SINGLE WORKERs wage 50% and keep the can of coke price the same and they would still profit, that is just one example, it is like that for almost every company.

Yeah, simply, increase the age and take a chuck out of those profits, the easiest solution available, and the easy way to lead a company to bankruptcy. You pay more wages you pay less your investors, investors dump your stock and nobody is willing to buy as they are not making a penny from it, guess what comes next?
You speak so easily about that because you don't own shares there, isn't it? I'm amazed how people here who embraced bitcoin and keep saying be your own bank, bitcoin is a way of avoiding movement control are at the same so eager to tell others how they should spend their money! Kind of ironic, you don't want a government to dictate what you do with your money but you want to be able to tell others that!
And the easy solution is always achieved by others going up profits, always the others!

Quote from: Kakmakr on June 17, 2021, 08:54:59 AM

Inflation rate is a flawed measurement ... because it is being manipulated by governments. So, what they do is this... they will never measure the inflation on the same goods and services every year.

All the items measured are publically listed, including the ones that are no longer taken into account and the ones that have been introduced.
And if you don't trust those numbers then let's look at some archived flyers:

August 2020 https://www.openingtimesin.uk/offers/lidl/1001493?from=4
May 2021 https://www.openingtimesin.uk/offers/lidl/1002275?from=4

2 pork escalopes were 2.99...new price 2.99
Coffee pack, 6.99 is now 6.99
Peanuts 2.79, now 2.69
Gelatelli almond icecream 2.29 is 2.29

Topic: USD Inflation over the last century. Bitcoin can protect you even in the US. (Read 251 times)