Inflation and Deflation of Price and Money Supply

[Yield7]

like in euro zone They keep euro price Up by not printing so much euros.

it Will create artificially higher demand.

[1715259840]

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[1715259840]

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[1715259840]

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[1715259840]

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[Yield7]

in Order to somewhere is life the Other side must Die!!
in Order to Something has value it must come from sacrafices.
btc value is based limited supply??
and what Else?
but the btc price is just manipulated by whales.

so it doesnt matter IF the btc cost 3000 or 4000
or Less More...
btc has high value anyways.

[destroyxbt]

2019 Deflator - 1st Moon

20190101 - 0.00000001 BTC Destroyed - 0.00000001 BTC 2019 Destroyed - 0.00000001 BTC Total Destroyed
20190102 - 0.00000002 BTC Destroyed - 0.00000003 BTC 2019 Destroyed - 0.00000003 BTC Total Destroyed
20190103 - 0.00000003 BTC Destroyed - 0.00000006 BTC 2019 Destroyed - 0.00000006 BTC Total Destroyed
20190104 - 0.00000004 BTC Destroyed - 0.00000010 BTC 2019 Destroyed - 0.00000010 BTC Total Destroyed
20190105 - 0.00000005 BTC Destroyed - 0.00000015 BTC 2019 Destroyed - 0.00000015 BTC Total Destroyed
20190106 - 0.00000006 BTC Destroyed - 0.00000021 BTC 2019 Destroyed - 0.00000021 BTC Total Destroyed
20190107 - 0.00000007 BTC Destroyed - 0.00000028 BTC 2019 Destroyed - 0.00000028 BTC Total Destroyed
20190108 - 0.00000008 BTC Destroyed - 0.00000036 BTC 2019 Destroyed - 0.00000036 BTC Total Destroyed
20190109 - 0.00000009 BTC Destroyed - 0.00000045 BTC 2019 Destroyed - 0.00000045 BTC Total Destroyed
20190110 - 0.00000010 BTC Destroyed - 0.00000055 BTC 2019 Destroyed - 0.00000055 BTC Total Destroyed
20190111 - 0.00000011 BTC Destroyed - 0.00000066 BTC 2019 Destroyed - 0.00000066 BTC Total Destroyed
20190112 - 0.00000012 BTC Destroyed - 0.00000078 BTC 2019 Destroyed - 0.00000078 BTC Total Destroyed
20190113 - 0.00000013 BTC Destroyed - 0.00000091 BTC 2019 Destroyed - 0.00000091 BTC Total Destroyed
20190114 - 0.00000014 BTC Destroyed - 0.00000105 BTC 2019 Destroyed - 0.00000105 BTC Total Destroyed
20190115 - 0.00000015 BTC Destroyed - 0.00000120 BTC 2019 Destroyed - 0.00000120 BTC Total Destroyed

[boumalo]

1800 new btc are mined each day that a 3,81% inflation rate per annum according to https://www.bitcoinblockhalf.com/

Reward drop ETA: Sun, 24 May 2020 13:38:58 GMT according to http://www.thehalvening.com/

==>A lot of the 1800 btc end up beeing sold on exchanges, it's a small factor compared to how much new money is coming in and how many btc from holders are being sold.

As the price rises, the attention on bitcoin increase, it's more positive, more uses are possible, more people are in the money and happy. I think that as the price rises, some want to sell but holders notice we are in a bull market and hold even more because of fomo = fear of missing out. People on the side lines buy, traders go long, miners tend to sell less at first and the price skyrocks in what's still a relatively thin market.

[muhtesem]

The rates are expressed at each point on the curve as though that rate of inflation were constant for a whole year and the money supply at the end of that year were compared to that at the beginning of the year. Inflation is usually expressed as an annualized rate. When you hear that the Federal Reserve is targeting an inflation rate of 2%, that's an annualized rate. its a wrong?

[STT]

The Federal reserve model could easily be considered wrong however thats the wheel spinning beneath the worlds economy as the main global reserve currency and some accept their intent is correct.  
The major obviously incorrect factor right now is an excessive fiscal budget and its not even about picking side in politics.  The forthcoming opposing side to current leadership intend to spend just as much and have no intention of ever returning debt to a surplus situation in the budget.    Its apparent inflation or massive deflation from default is likely, a richter scale graph of volatility is likely to strike US dollar and so the world that will effect everyone reading this.

The most positive take would be to assume creditors will continue to float the bad debt (Greece was 'just fine' at its previous low rates) and we only see low scale inflation, how with trillions more debt being added; its like a game Jenga seems to me with upset inevitable.

https://www.youtube.com/watch?v=uD64owa6xh4
Anyway I posted just to mention this video which has both sides to pro and anti federal reserve policy regarding likely inflation.   I agree with the idea that inflation is the monetary base, BTC is obviously expanding it but its also a fair argument that new users also help to counter this supply.     Any change to block reward is accumulative


also relevant imo https://imgur.com/gallery/2KNvH6J

[Yield7]

Around the world the money supply is lower then it was before.

Also we are in the situation when Banks Don't lend out any money.
IF we Can't borrow any money anymore it means Government dont create new money in to circlelation anymore.

for example: 
in UK years ago People use to get credit and loans biggest and many People borrowed a lot.
But now Nothing no loans no credit.

We are right now in situation when its good for the money but not good for the people. 
My Next question is:

If the goverments around the world burning cash..., Yes they really do that If anyone are surprised here then yes governments fight against inflation to physically destroy fiat currency! 

But Still we need to pay back the old loans.... but even we work harder or what ever  there is not enough fiat currency to sadisfy our cash needs.

Results will be that we lose homes assets and so coz nobody really cant pay their debt.
If You are not in debt... the Way how it will affect You is that :

If we dont have enough money in circlelation then many business or shops specially local small business Organizations need to close...
Simply coz there is not enough money in cirlelation... People Can't buy or consume so much as before... and that will couse higher unemployement numbers.


Right now is Fiat collecting process

the Only question is:

Are we gona see the new beginning?  new boom in Economy?

If not then we will see that Fiat currency will be most valueble asset we have.

Even crypto market is down.
. crypto market is a lot to do with real Economy If the real Economy is bad like right now we not gona see any good bull market anytime soon!!!
Crypto need a lot fiat to enter into crypto market... but If we dont have enough fiat in the world then crypto market will stay down.

ONLY way the cryotocurrency really Can go high when the banks will create other boom... but the boom is not here.





so is hope is did explained all about Economy and markets  

[BitcoinFani]

i think inflation also affects the performance of the crypto currencies. To avoid confusion, There is no monetary deflation in the sense of money supply contraction. This should be taken into account when investing in bitcoin  that every year inflation will take a certain percentage and should be included in we calculations

[Crypto$tar]

i think inflation also affects the performance of the crypto currencies. To avoid confusion, There is no monetary deflation in the sense of money supply contraction. This should be taken into account when investing in bitcoin  that every year inflation will take a certain percentage and should be included in we calculations

But we should take into consideration marketmaker’s job and other speculators

[navneet kaur]

If we talk about Inflation, it occurs when the prices of goods and services rise, while deflation occurs when those prices decrease. This is the balance between the two economic conditions, opposite sides of the same coin are delicate and an economy can quickly swing from one condition to the other.

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Punjabi Newspaper

[leif22]

If we talk about Inflation, it occurs when the prices of goods and services rise, while deflation occurs when those prices decrease. This is the balance between the two economic conditions, opposite sides of the same coin are delicate and an economy can quickly swing from one condition to the other.

Except, where has there been deflation in the Western world in the last 5 years?

[Gravel Coin (GRV)]

In a simple view, if the mean of payment has its unities multiplied in excess of a balanced relation to goods/services in a given market, then it is obvious that its intrinsic value will decrease; that would drive inflation upwards. In the exact opposite way, we may think of deflation.

[elisabetheva]

i think inflation also affects the performance of the crypto currencies. To avoid confusion, There is no monetary deflation in the sense of money supply contraction. This should be taken into account when investing in bitcoin  that every year inflation will take a certain percentage and should be included in we calculations

maybe we can disagree about inflation that is directly related to the crypto currency, in fact I feel that crypto is very independent of the development of fiat currencies. crypto stands alone and experiences different things if you want to also invest.

[yohananaomi]

In a simple view, if the mean of payment has its unities multiplied in excess of a balanced relation to goods/services in a given market, then it is obvious that its intrinsic value will decrease; that would drive inflation upwards. In the exact opposite way, we may think of deflation.

It is true what you say is that inflation is happening because more demand is compared to the existing supply, so if it happens the opposite will be deflation.

[STT]

in Order to somewhere is life the Other side must Die!!
in Order to Something has value it must come from sacrafices.

This doesnt have to be true, its true in zero sum trading but the wider world actually allows for real growth to occur and it does.    The Federal reserve have a strange policy of confusing growth with inflation and so they always require and want inflation to be occurring and believe they have achieved their target so long as that is true.
I can appreciate they want an orderly market not sharply changing prices but always inflation in fact represents instability like as if Bitcoin only ever went up every day, it show as massive volatility from an always changing price where as normally we retract and even go sideways and hold prices so its not the positive people might expect

Comparative advantage says we gain genuinely where both parties have a lower means of production for exchanged items.   There is no sacrifice in this trade, its part of the headlines now.   Is what Trump doing actually correct for the country in trying to reduce the flow of goods from China and other places or not.
The immediate effect is to deny or to raise good price to the country raising tariffs which is a negative.    

Value can actually rise for all, many countries can benefit from trade.   Its one of the most positive things about Bitcoin that it might allow trade that otherwise would be restricted or too costly and cumbersome to take place.  

[cipherer]

the enlargement of crypto-currencies (in case of Bitcoin the forks?!) will result in dilution. From an economic point of view = inflation.
Did I miss this in the analysis?

[Rishblitz]

come to think maybe that reason the price has going straight down it is because a lots of people have bought some bitcoin, and hold 'em for sometime, If no one uses a crypto then they won’t have any value like that.

[Lifestudent38]

come to think maybe that reason the price has going straight down it is because a lots of people have bought some bitcoin, and hold 'em for sometime, If no one uses a crypto then they won’t have any value like that.

Or perhaps its market makers taking profits?

Think about it - I own a shop and buy a tomato for $1.00, now I need to sell for $1.35

In the case of market makers its a bit on the reverse side - I sold a tomato for $1.35 now I need to repurchase it for $1.00


Also read the top post - something about supply and demand and all that jazz.... uhm If someone is buying a BTC does that warrant demand > supply because to actually demand and buy 1 BTC there has to be an equal supply of 1 BTC sold... so demand always equals supply 

[kannikaamudee]

If youre living in the developing nation, Inflation is just a normal thing 

[Steven123301]

An area dedicated to discussing the differences of these two terms and the theories supporting them.

I'm looking forward to an in-depth discussion on the subject! I've noticed that confusion between the two seems to come up quite a bit on the forum, and thought it may be reasonable to dedicate a thread on the matter.

Pulled from a discussion in Wall Observer


Price-Deflation is what you are used to hearing about in Bitcoin. That term is used to describe the prices of goods/services as they decrease, because the value of Bitcoin goes up.

Price-Inflation is the opposite. When prices of goods/services increase because the value of Bitcoin goes down.

So, when dealing with Price-Inflation or Deflation, there is an inverse relationship of price and value, in regard to goods/services and Bitcoin.

Example: As the Bitcoin price goes from $10 to $20, the prices of goods/services goes down from 20BTC to 10BTC. As the Bitcoin price goes from $20 to $10, the prices of goods/services goes from 10BTC to 20BTC!

Why does the price of Bitcoin go up and down? The price of BTC goes up and down based on the exchange rate, or market price, which is set by buyers and sellers, or traders. They directly trade the Bitcoin currency with all sorts of other currency, and even some with gold; the most popular being the USD (US dollar). They set the price when executing orders to buy or sell. I will get into the actual reason of why the price fluctuates in the last section.


Now that we've gone over PRICE Inflation and Deflation (which honestly, to me, is a term made popular by Keynesian's to hide the real facts, as price inflation/deflation is simply the market exchange rate, reflective of the money supply into a currency from itself and other currencies), let's go over the REAL inflation/deflation of a currency (otherwise known by many as Monetary Inflation).

MoneySupply-Inflation is when the value of Bitcoin decreases when the total supply of Bitcoin increases. In our current state, this is at a generation rate of 25 BTC every 10 minutes.

MoneySupply-Deflation will essentially never occur. It is when the value of Bitcoin increases when the total supply of Bitcoin decreases. This may happen, say, when someone loses their private key and all the BTC associated with it are lost. This effectively "makes the rest of us richer". That being said, there is a SET DECREASE in the generation rate of BTC, so you have sort of a "deflationary effect" in the value, as long as more exchange occurs for BTC at a rate which is faster than that set generation rate.

When all 21 million coins are produced, the MoneySupply will be neutral, and the value will continue to increase (prices will decrease, consequently), as long as people continue to exchange in BTC.

This leads me to the last section.


What determines the PRICE of Bitcoin? The VALUE of Bitcoin at a particular moment.

What determines the VALUE of Bitcoin? The SUPPLY and DEMAND of Bitcoin in the economy.

What determines the SUPPLY of Bitcoin? Currently, the MoneySupply-Inflation rate of 25 BTC every 10 minutes, and traders willing to SELL Bitcoin to BUYERS in exchange for other supplies of money (currencies).

What determines the DEMAND of Bitcoin? Traders willing to BUY Bitcoin from SELLERS in exchange for other currencies.


Therefore: BUYERS, SELLERS, and MONEYSUPPLY-INFLATION (miners) determine the VALUE of Bitcoin, which determines the PRICE of BTC as BUYERS and SELLERS trade based on that VALUE (or supply and demand) of Bitcoin.


We don't exactly know the totality of the supply and demand. Sure, we could try and aggregate data from all the exchanges, but we will never be accurate as there are exchanges which can not be accounted for (OTC). The cool thing is that we DO know the MoneySupply rate, and we DO know the exchange rate. From this, we can determine a real value of Bitcoin when simply multiplying the two factors; a sort of inflation-adjusted view of the currency.

Effectively, the quantitative analysis of supply and demand is really what the currency exchange traders attempt to accurately determine which is conveyed through buying and selling of Bitcoin, setting a VALUE via the PRICED exchange rate of the currency. On a side note, most of the big Market Makers (FX Traders) use this price movement as a way to make a profitable living, as well. Especially when price fluctuations are a consequence of hype or fear (bubbles, cliffs), not factual supply/demand data, and are wildly out of the real price range.

Thus, if you analyze the proper macroeconomic data in an attempt to forecast future DEMAND for more Bitcoin (price increase), you will realize some very interesting things, and have a more accurate picture of where the price is going...

Happy trading!

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