Bitcoin and Inflation
Inflation is the most misrepresented financial topic of all time. It is purposely miscommunicated about by media and governments. This is especially true with inflation calculations. The CPI being at 5% today in the US, is laughable. The shadow statistics alternative CPI in the graph below in blue, CPI is in red, shows real inflation is down from 18% last June to 9% now. See the shadow statistics graph below:
Predictably, the Biden administration has attempted to use this slowing in price growth as an excuse to claim inflation is "falling." Last Friday's press release on inflation from the White House reads:
Inflation has now fallen by 45% from its summer peak. Gas prices are down more than $1.40 from the summer, and grocery prices fell in the month of March for the first time since September 2020.
This is a very tortured spin on the statistics. The press release is worded in such a way as to suggest that prices are falling, but this is most certainly not what is going on. Even with energy prices going down, year over year, increases in food and shelter prices are more than enough to ensure that the cost of living continues to go up in real terms. This is especially painful given 24 months of falling real wages.
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Two years of CPI inflation above 5% and Alternative or Real inflation above 9%. Meanwhile, real wages are down over that same two years. Since 1970, real wages (inflation adjusted) are up only 26%. Home real inflation (inflation adjusted). In other words the cost to own a home. This cost is up 103% in that same time, sicne 1970. Contrast this constant debasement in value of the US dollar with Bitcoin. One way to understand this, is look at the value of Bitcoin in countries with worse inflation than the US. Below are graphs showing Lebanon, Argentina, Turkey, and Pakistan. Note the value of Bitcoin in those currencies:
Bitcoin is deflationary compared to all currencies. Regardless of it’s volatility, it gains value in comparison to every fiat currency in the world!
The halving, whereby the miner reward is cut in half. This reward, per block awarded on the blockchain every 10 minutes, is the deflationary aspect to Bitcoin. It’s supply, (miner reward) is halved every 210,000 blocks. Times 10 minutes per block, this comes out to 4 years. When an asset is this deflationary, because it’s production is cut by 50% every 4 years. It has ever increasing scarcity. As fiat currencies are constantly printed with no end in sight, Bitcoin’s deflationary aspect brings it ever growing value priced in a fiat currency. The worse that currency inflates, the higher the price of Bitcoin goes. See this chart below for the Bitcoin halving schedule:
As the US debt service monthly cost crosses beyond $1 Trillion per month to service debt. The incentive is only in one direction. Print more currency, debase it’s value, and pay off the mounting debt with debased currency.
Unfortunately, this also incentivizes private central banks, controlled by very small groups of people, to infiltrate governments and media to avert a mass awakening by the masses to this ponzi scheme! This explains war, open borders, and many social catastrophies that plague society on many levels. Rather than ignore the true problem. Bitcoin solves the double spend problem, and creates digital scarcity, on the most secure blockchain in the history of mankind. Thanks to the speed of the lightening network, Bitcoin is a much faster medium of exchange than fiat currency. Due to the properties Bitcoin posseses, and due to the monopolar world that is created by paper currencies, over time Bitcoin deflates, while these fiat currencies inflate. Eventually, a tipping point will be reached. Regardless of government pushback. A public ledger cannot be stopped. Bitcoin is the true signal. Fiat currency is just noise. Escape from unending inflation, buy Bitcoin! We are not financial advisors and this is not financial advise. We simply see that the Fed will have no choice but to print it’s way out of this, eventually. Even if CBDC’s are introduced, digital fiat currency will inflate just as fast as paper fiat currency. All the digital aspect does is cede human rights from people, to their government. Therefore, use Bitcoin as the hedge against this! Humanity needs this hedge, this insurance against debasement of our way of life!
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