Rate cuts money printing inflation

[1Referee]

It's really hard for BTC to be a good hedge because of its volatility. Imagine you wanted to avoid losing your wealth to 2% of inflation per year so you decided to put your life saving in Bitcoin a few weeks.

No one puts his savings in Bitcoin for just a few weeks to hedge fiat's annual inflation.

As you know, Bitcoin might not be the best hedge against inflation short term wise, but if your time horizon is at least a couple of years, the volatile nature of the market in the short term shouldn't be much of a bother with how Bitcoin only needs a couple of months to undo years worth of inflation. Charts don't lie. It's there for everyone to see.

In the end, there is a risk to anything you do. It doesn't matter what asset you choose as hedge against inflation, nothing guarantees that it will work as intended if you only park your capital in that asset for a short period of time.

[Thanasis]

What Will be as the Great hedge?

Or we just follow the circles, When inflation high we should just investing borrowing and selling.


If inflation down we should buy Everything?


This repeating process Will be hedge byself? 
Do any safe hedge actually Existing?

You should buy the things before the inflation and sell it before the deflation,doing it in the opposite will reduce your total amount of money even if the value is still same.But the best thins is to avoid inflation and deflation by investing on something which has more stable value.AFAIK gold is the best solution to get away from these economical instability.

[el kaka22]

Gold will get a profit right away, it is already going great recently (as great as gold can get, not compatible to bitcoin when it is on a bull run) but bitcoin will probably take some time. What you have to realize is that gold is directly pegged to dollars, if dollar loses its value then gold increases in value, they are not separated by anything else, even on price changes, we are talking about a limited number of gold in the world and increasing number of dollars hence by theory as long as humanity sees gold as something valuable there will always be an increase in gold.

On the other hand bitcoin is pegged to dollars only in price calculations, they have nothing else in common and even though we think the price of bitcoin will go up when dollar goes down, there is still the fact that people could simply just sell their bitcoins and drop the price at the same time.

[ShooterXD]

Gold will get a profit right away, it is already going great recently (as great as gold can get, not compatible to bitcoin when it is on a bull run) but bitcoin will probably take some time. What you have to realize is that gold is directly pegged to dollars, if dollar loses its value then gold increases in value, they are not separated by anything else, even on price changes, we are talking about a limited number of gold in the world and increasing number of dollars hence by theory as long as humanity sees gold as something valuable there will always be an increase in gold.

On the other hand bitcoin is pegged to dollars only in price calculations, they have nothing else in common and even though we think the price of bitcoin will go up when dollar goes down, there is still the fact that people could simply just sell their bitcoins and drop the price at the same time.

You are right in this statement.
In the event of a crisis, the best way out would be to invest in metals, which are pegged to the Dollar. In a crisis, everything is subject to falling but metals.
Bitcoin itself can be dumped by many who understand this factor to skip their money for gold or silver.

[DBronze98]

Yes, that's right. I also used to think of the world that only uses bitcoin to pay for services. But it occurred to me that no one wants to hold on to a type of asset that is highly volatile and always manipulated by those with a lot of money.
But I still believe that central banks in countries will solve inflation. The recession is coming but we still have gold to hoard, don't worry about fiat money.

[The Sceptical Chymist]

<snip>
prices specially Property rent and buy prices are going higher.
Do You think its coused by inflation?  

That pretty much is the definition of inflation--prices going up, although the government measures inflation with a "basket of goods" model instead of rent and real estate values (I think).  And if there's too much money floating around, people buy more things and prices rise because of the increased demand.  I'm not an economist, but I would think that the Fed releasing so much new money into the system has to be driving prices up.  Plus interest rates are extremely low, so there's a lot of borrowing going on.

And that makes this currency much better than fiat. Take the case of that 10k BTC pizza. 10K BTC today is already worth approximately $80 million.

I certainly see your point, but there's nothing guaranteeing that in another 10 years a pizza won't cost 10k BTC again.  There has to be demand for bitcoin in order for its price to go up, and based on its volatility I'd say that demand fluctuates wildly.

In the event of a crisis, the best way out would be to invest in metals, which are pegged to the Dollar. In a crisis, everything is subject to falling but metals.

Metals are not pegged to the dollar.  The dollar used to be pegged to gold, but that ended in the 1970s.  Gold, silver, and the rest of the precious and base metals are priced based on open market trading.  Hell, if we were still on the gold standard, there would be no way for the Fed to keep printing money.

[Sithara007]

Here in India, the reverse is true. Retail inflation came down from 14% to 3% during the last 6 years. Property and rent prices are either stable or declining. So I can't readily agree with you when you claim that inflation is making fiat currency worthless. But that may be the case in other countries, I am afraid. But here, if things go on like this then very soon we'll be having negative inflation.

BTW, gold prices have increased recently. But you can't use that argument to support the theory that fiat currency is becoming worthless. The gold price movement is more related to the market dynamics, such as supply and demand. From what I have seen, apart from gold, many of the commodities have become cheaper during the last few years (electronics, vehicles, and even services).

[Casdinyard]

I do feel that, but the problem is i cant buy groceries food and daily needs with Bitcoin first i have to Exchange my btc to Fiat, so the Bitcoin and gold is Not really Solution for that problem!!  

Definitely that's a long way to go but seriously this issue has been raised all over the community and even the government can't control the inflation rate.

While bitcoin and other cryptos could be our last resort because of its promise of appreciating than deflecting. And we see the first world countries adopting the cryptos and carefully researching how they can innovate more. Don't worry OP, you are in the right track and you'll see in about some years, you will be able to shop with just your phone on your pocket.

This is just the beginning.

[NathanJB]

I do feel that, but the problem is i cant buy groceries food and daily needs with Bitcoin first i have to Exchange my btc to Fiat, so the Bitcoin and gold is Not really Solution for that problem!!  

Definitely that's a long way to go but seriously this issue has been raised all over the community and even the government can't control the inflation rate.

While bitcoin and other cryptos could be our last resort because of its promise of appreciating than deflecting. And we see the first world countries adopting the cryptos and carefully researching how they can innovate more. Don't worry OP, you are in the right track and you'll see in about some years, you will be able to shop with just your phone on your pocket.

This is just the beginning.

Inflation is actually under the control of the government central banks and other financial bodies of the government. However, it is not all the time that the government can successfully control it on a tolerable or even desired level. Sometimes, it goes beyond their percentage target, and moves out of control. And it is during such times that the purchasing power of the fiat currency is getting weak.

It is at these particular times when Bitcoin is the best way to go. Bitcoin is not under any inflation laws or regulation. But the problem is that it is completely under the influence of the public and free market in which a whale could manipulate the prices.

[magneto]

We all ready see this, prices specially Property rent and buy prices are going higher.


Do You think its coused by inflation? 


If so do you think the gold and btc Will be hedge?

I think the assets prices going up in Europe,  USA, Australia Central Banks just started money printing those 3  countries wich i mentioned above


As we Know in canada there is about to start Economic recessions If they dont start rate cuts like USA, EU, AU just did.


Uk Economic situation is 50/50 it can go down.

Do You personally feel that Fiat Currrency losing slowly puraching power? 

I do feel that, but the problem is i cant buy groceries food and daily needs with Bitcoin first i have to Exchange my btc to Fiat, so the Bitcoin and gold is Not really Solution for that problem!! 

Rate cuts are intended to raise inflation towards the inflation target. That's literally what they are for.

I doubt that a single rate cut would have any real long term detriments. Nor is there really any reason to believe that inflation is caused by rate cuts alone - it can be related also to the velocity of money, the money supply, etc. (but of course, interest rates do play a big part).

In regardsr to your point about losing purchasing power, it's not really anything new. There is a reason why a savings account is not considered to be a good store of value, when it's denominated in fiat. When something doesn't have intrinsic value, it's bound to lose value in the long run (except in deflation).

[MonsterV]

I do feel that, but the problem is i cant buy groceries food and daily needs with Bitcoin first i have to Exchange my btc to Fiat, so the Bitcoin and gold is Not really Solution for that problem!!  

The discussion gold and bitcoin as a hedge when crisis comes is still a question mark. Some people consider gold and bitcoin to be a hedge, but some also just say that gold can do it. In my opinion, if you are looking for something definite hedge then choose gold, because gold has been proven as a hedge.

Unlike bitcoin, bitcoin has never been through a crisis before, especially in 2008 so I can't clearly say whether bitcoin is capable of hedging, but I really hope that bitcoin can do that, because it can increase price much higher.

If your problem is that you can't buy daily necessities with gold or bitcoin, I don't think it's a problem. The biggest problem is the crisis itself, you will lose more money if you do not invest your money into gold or bitcoin rather than prioritizing daily needs.

[loyoung]

We all ready see this, prices specially Property rent and buy prices are going higher.


Do You think its coused by inflation?  


If so do you think the gold and btc Will be hedge?

I think the assets prices going up in Europe,  USA, Australia Central Banks just started money printing those 3  countries wich i mentioned above


As we Know in canada there is about to start Economic recessions If they dont start rate cuts like USA, EU, AU just did.


Uk Economic situation is 50/50 it can go down.

Do You personally feel that Fiat Currrency losing slowly puraching power?  

I do feel that, but the problem is i cant buy groceries food and daily needs with Bitcoin first i have to Exchange my btc to Fiat, so the Bitcoin and gold is Not really Solution for that problem!!  

Well, if you consider Bitcoin and gold not a solution to be used as a hedge, then what is the solution to this problem? Will you still only hold Fiat? Obviously not, because fiat will continue to be eroded by inflation.

And maybe Bitcoin and gold are not the perfect assets to be used as hedges. However, Bitcoin and gold can be used as investment portfolio diversification. Under certain conditions, Bitcoin and gold can be the best solution rather than just holding Fiat that's always struggling againt inflation.

[gaston castano]

bitcoin can overcome but not all, for example is the country of Venezuela where they are exposed to massive inflation because their currencies have experienced a very large decline, so people turn it into bitcoin.
and also many other commodities, you can buy gold, goods that are not affected by inflation.
then Fiat will still apply to buying daily needs.
I think it's not too difficult to exchange your BTC to Fiat it doesn't take long. just a few minutes the most important value of your money still even increase.

[Paecga129]

Inflation is caused by printing Fiat money in unlimited quantities. Cryptocurrency, on the other hand, is deflationary because it can't be printed or created.

[shield132]

We all ready see this, prices specially Property rent and buy prices are going higher.


Do You think its coused by inflation?  


If so do you think the gold and btc Will be hedge?

I think the assets prices going up in Europe,  USA, Australia Central Banks just started money printing those 3  countries wich i mentioned above


As we Know in canada there is about to start Economic recessions If they dont start rate cuts like USA, EU, AU just did.


Uk Economic situation is 50/50 it can go down.

Do You personally feel that Fiat Currrency losing slowly puraching power?  

I do feel that, but the problem is i cant buy groceries food and daily needs with Bitcoin first i have to Exchange my btc to Fiat, so the Bitcoin and gold is Not really Solution for that problem!!  

If you see countries have loans from each other and number of unpaid loans is huge, in overall world has unpaid loan if you see statistics, it's curious. So this means there is worldwide inflation which of course causes rise in prices. When you took loan from me, I do the same from another country and etc, none of them were paid so we printed money, loan is loan in statistics.
Btw nor bitcoin can fix that issue because of it's price calculation mechanism. We need something with really fixed value and limited supply. This way everything will have same price on very long term. But oh, governments don't want that because they can't make money from it.

[akram143]

Inflation is caused by printing Fiat money in unlimited quantities. Cryptocurrency, on the other hand, is deflationary because it can't be printed or created.

If printing of fiat money stops then crypto currencies will not be deflatory only the value of fiat money will get diluted into the decentralized crypto currency.

[ivakar]

We all ready see this, prices specially Property rent and buy prices are going higher.


Do You think its coused by inflation?  


If so do you think the gold and btc Will be hedge?

I think the assets prices going up in Europe,  USA, Australia Central Banks just started money printing those 3  countries wich i mentioned above


As we Know in canada there is about to start Economic recessions If they dont start rate cuts like USA, EU, AU just did.


Uk Economic situation is 50/50 it can go down.

Do You personally feel that Fiat Currrency losing slowly puraching power?  

I do feel that, but the problem is i cant buy groceries food and daily needs with Bitcoin first i have to Exchange my btc to Fiat, so the Bitcoin and gold is Not really Solution for that problem!!  

US started the race by those short repo operations, then continue to 14 days repo.. that means banks are short for cash and the shortage is huge.
Feds printed more then hal of trillion us dollars, in fact those freshly printed dollars in some way will go to the real economy wich will cause some inflation... maybe this is it. and you can see it already..

[abhiseshakana]

Inflation is usually characterized by repeated price increases and over a long period of time, especially for basic needs. Inflation is always used as the main reason for property players to raise property prices every year, even though if carefully calculated the increase in property price is higher than the increase in inflation. Some point which affected the property price increases is: demand, supply availability, investment value and the most important thing, in my opinion, is its location. So the increase in property prices is actually not due to inflation but rather triggered by other market factors.

To overcome the economic recession of each country, have different formulas and policies, by looking at the situation of each country. Not necessarily the method applied in America can be suitable and effective if implemented in Canada.

Gold and silver are still the safest choices for long-term investments even though the current trend is cryptocurrency, and the most important thing for investors is to be able to read when is the right time to invest and where to invest. Investors can see and open the opportunity.

[Pab]

Fiat money are losing purchase power.Irony is that we had deflation in world after massive printing and rates near zero or below zero.Bitcoin is unique alternative because of his low inflation and because bitcoin independent from Central Banks.If now or near future will be inflation then i think we will have hyperinflation
That case bitcoin is great
I also think that dollar will lose his dominance and bitcoin is great dollar hedge.Will be time when bitcoin and gold will rise together

[Kakmakr]

Well actually Bitcoin can be the answer to that problem and it is very evident in countries like Zimbabwe and Venezuela where they are struggling with hyperinflation. In these countries it is not strange for Fiat currencies to lose value daily and people are turning to Bitcoin to protect the buying power of their local Fiat currency.

How? What do you propose? People of Zimbabwe and Venezuela all buying BTC?

If so do you think the gold and btc Will be hedge?

It's really hard for BTC to be a good hedge because of its volatility. Imagine you wanted to avoid losing your wealth to 2% of inflation per year so you decided to put your life saving in Bitcoin a few weeks. By today you'd lose 20% of your wealth already

What about scalability and utility problem?

I do feel that, but the problem is i cant buy groceries food and daily needs with Bitcoin first i have to Exchange my btc to Fiat, so the Bitcoin and gold is Not really Solution for that problem!!  

Nope, not all the people are switching to Bitcoin to replace their local currency, because it will be a bit to premature to do that, because not all the merchants are accepting Bitcoin as a payment option ...yet.    They are converting some of their money to Bitcoin to hedge against the falling value of their local currency.

It is just a question of time until we see some 3rd world countries making a decision to accept Bitcoin as a reserve currency, because they think it will solve their economic problems.