Inflation expected as high as 4% in Apr in USA

[paxmao]

This is the figure for April, yet still quite a figure to be dealt with for those who live on salaries, that tend to go after the inflation, and great news for those who have a mortgage or own money, since they are on the winning side for now - until interest rates catch up.

How is this going to affect bitcoin? If we make an analogy with commodities and particularly those used on the industrial processes, it will have a lift effect in price, sometimes much higher that what could normally be for other assets. I think is a good moment to stockpile bitcoin, copper... even tin, although is a bit expensive already.

[cabron]

Bitcoin will be a better option. Its volatility will always make money to someone who trades it. As inflation goes high every month, the savers and the ones who live on salaries will have their money but the purchasing power will decline as inflation stays. This is the reason why hedge fund managers are so bullish that they are adding Bitcoin to their balance sheets.

[Darker45]

Winning on the side of having a mortgage cannot make up with losing on the side of having to confront with rising prices or devalued savings. The former is but a minor consolation for a generally unpleasant situation.

Anyway, the fact alone that fiat depreciates in value over time makes Bitcoin more interesting and attractive. The higher the inflation goes, the more attractive Bitcoin becomes. Anything whose value is appreciating or remains constant is much better than fiat. So stocking up copper, tin, and so on is way much better than keeping a fiat savings account.

[Poker Player]

Inflation as calculated in the CPI is one thing; actual inflation is another. If the official data show 4%, the real inflation is surely much more, which means that they cannot hide it as much as they would like to.

In theory, this is going to flow money into Bitcoin and other assets. It doesn't have to be a today-to-tomorrow thing, but in the next few months for sure.

[NeuroticFish]

Yeah, US citizens are no longer used with inflation. Well, things will change now.
On the other hand, I've heard somewhere that various materials for industries (including steel and construction materials too) have become more expensive worldwide lately (start of spring 2021).

[Kittygalore]

Yeah, US citizens are no longer used with inflation. Well, things will change now.
On the other hand, I've heard somewhere that various materials for industries (including steel and construction materials too) have become more expensive worldwide lately (start of spring 2021).

They aren't used to it because it slowly adjusts a little each year so it's not that noticeable plus if people are noticing it then it can induce panic and unnecessary anxiety. Raw materials get expensive because production is getting smaller or limited.

[NeuroticFish]

They aren't used to it because it slowly adjusts a little each year so it's not that noticeable plus if people are noticing it then it can induce panic and unnecessary anxiety.

In my country inflation came under 10% only ~16 years ago and now 2-4% is normal. And these are the official numbers, I believe that the reality is a tad worse.

Raw materials get expensive because production is getting smaller or limited.

That's what I wanted to point out. Yes, the production and transportation got more expensive, especially since that ship was stuck for a while in the Suez channel.

[yhiaali3]

Indeed, storing bitcoin and precious metals would be a much better option than storing fiat, fiat loses its value over time and with the growth of inflation and its purchasing value becomes almost non-existent, so the best option is to buy bitcoin and precious metals and keep them not only as a store of value but also in order to multiply investments and profits because their value increases With time unlike Fiat.

[Leviathan.007]

Not sure how they did this 4 percent prediction, because I expect it even much more than this. As I can see, the inflation rate is rising each year and government tries promises to control it and they will usually try to decrease the rate by unfortunately using federal reserve dollars and printing too much money to increase the funds while they will make a bigger mistake by providing too much money supply which can be the reason for decreasing the value of dollar against gold and other assets.

[ven7net]

This is the figure for April, yet still quite a figure to be dealt with for those who live on salaries, that tend to go after the inflation, and great news for those who have a mortgage or own money, since they are on the winning side for now - until interest rates catch up.

How is this going to affect bitcoin? If we make an analogy with commodities and particularly those used on the industrial processes, it will have a lift effect in price, sometimes much higher that what could normally be for other assets. I think is a good moment to stockpile bitcoin, copper... even tin, although is a bit expensive already.

To understand what will happen and what to do, you need to know exactly what is happening and why it is happening. In the US, inflation will reach 4%, even if this is so, and I think that everything is much worse there, then you need to understand why this happened. The US dollar as a global reserve currency has outlived its usefulness, it is also called the international financial system, so inflation is the depreciation of money, but did anyone doubt that there would be no inflation when printing trillions of dollars? Yes, there are those who believe in eternal dollars, but unfortunately everything is not as we are told, but everything is much worse. Is there a solution? Probably, this solution exists for the United States itself, this is Bitcoin and other cryptocurrencies. But how all this will happen and where in the end all this will lead, we will very soon be able to see. But we can already say for sure that inflation in the United States is a signal for the decline of the dollar as an international reserve system.

[Vishnu.Reang]

Not sure how they did this 4 percent prediction, because I expect it even much more than this. As I can see, the inflation rate is rising each year and government tries promises to control it and they will usually try to decrease the rate by unfortunately using federal reserve dollars and printing too much money to increase the funds while they will make a bigger mistake by providing too much money supply which can be the reason for decreasing the value of dollar against gold and other assets.

I guess it takes some time to get reflected in the market. The influx of fiat money during 2020-21 is something unparalleled. The M1 money supply increased by more than $5 trillion during this period in the United States, and by similar amounts in the other countries. Such a huge increase in monetary supply is unheard of, and has never happened in the past. Once the pandemic is contained and the economic growth resumes, the inflation rate is just going to explode. I won't be surprised even if it gets to 20% or more.

[crwth]

Isn't it always have been 4%? Usually, it's 7%, but with all the fees and tax, right? If many people have a lot of extra money to have, they would probably invest in something else, which could be to buy more cryptocurrency. Not affect the only Bitcoin but everything to put the economy back in its rightful place.

[zanezane]

Indeed, storing bitcoin and precious metals would be a much better option than storing fiat, fiat loses its value over time and with the growth of inflation and its purchasing value becomes almost non-existent, so the best option is to buy bitcoin and precious metals and keep them not only as a store of value but also in order to multiply investments and profits because their value increases With time unlike Fiat.

Isn't storing precious metals expensive? In my country, when you buy a gold or something in the realm, the store or banks keep them for safekeeping and you are forced to pay for safekeeping. But you are right that fiat is much worse to be stored compared to other alternatives. Also, the 4 percent is a normal number for inflation and in fact some economists are saying that the number 4 is the perfect number in terms of inflation.

[bryant.coleman]

Isn't storing precious metals expensive? In my country, when you buy a gold or something in the realm, the store or banks keep them for safekeeping and you are forced to pay for safekeeping. But you are right that fiat is much worse to be stored compared to other alternatives. Also, the 4 percent is a normal number for inflation and in fact some economists are saying that the number 4 is the perfect number in terms of inflation.

You can go for gold ETF, which can be stored using a demat account. I have invested in various gold ETFs for the last 15 years, and never faced any difficulty with them. They can be purchased and sold with relative ease, unlike the case with physical gold. But obviously you need to go for the most trusted issuers and even then there is a very small chance that the fund may be confiscated or the issuer may go bankrupt. So you need to decide whether you want to go for physical gold (and the risks related to it), or to go for paper gold (with another set of risks associated with it).

[oHnK]

Isn't storing precious metals expensive? In my country, when you buy a gold or something in the realm, the store or banks keep them for safekeeping and you are forced to pay for safekeeping. But you are right that fiat is much worse to be stored compared to other alternatives. Also, the 4 percent is a normal number for inflation and in fact some economists are saying that the number 4 is the perfect number in terms of inflation.

You can go for gold ETF, which can be stored using a demat account. I have invested in various gold ETFs for the last 15 years, and never faced any difficulty with them. They can be purchased and sold with relative ease, unlike the case with physical gold. But obviously you need to go for the most trusted issuers and even then there is a very small chance that the fund may be confiscated or the issuer may go bankrupt. So you need to decide whether you want to go for physical gold (and the risks related to it), or to go for paper gold (with another set of risks associated with it).

This is the choice we have today.  There are many choices of instruments that can be used to avoid inflation that occurs.  Indeed, 4 percent is still considered normal and not too high.  But if it is not controlled properly then it can exceed normal limits.  This new kind of gold is still not common in society and those who are less literate find it too risky.

[Vatimins]

This is the figure for April, yet still quite a figure to be dealt with for those who live on salaries, that tend to go after the inflation, and great news for those who have a mortgage or own money, since they are on the winning side for now - until interest rates catch up.

How is this going to affect bitcoin? If we make an analogy with commodities and particularly those used on the industrial processes, it will have a lift effect in price, sometimes much higher that what could normally be for other assets. I think is a good moment to stockpile bitcoin, copper... even tin, although is a bit expensive already.

     No matter the case, the devaluation of some assets is never a good thing for anyone, even if we say that they have other things that can doge the effects of inflation. But still though, it is still better than nothing right? Well, to some degree it is, just not enough.

     The way it would affect bitcoin would be pretty positive since the way bitcoin currently is can make anyone interested with it. Specially the paranoid ones who are scared to death on having their assets devalued due to inflation. And yes, the more you diversify, the better. That is, if you put a limit to it so that you can manage your assets well enough to not have losses instead of gains in the long run.

[Theb]

According to this website the US Dollar had a 4.2% inflation rate during the month of April and for May it had 5% which I think is abnormal considering that it is more than what the USD is experiencing during the past months/years. I know that the common concept of an increase in inflation will translate to people will most likely save or invest their money to other hedges and this will most likely be the case however there is no guarantee that people who has US dollars will be focusing their money towards Bitcoin or in the crypto market in general. Other factors such as their risk appetite and other investment opportunities will also be considered and I don't think people in the US have the same way of thinking as the South Koreans where their crypto exchanges have more volume than their own stock market.

[BrewMaster]

since bitcoin is still being adopted and still the large majority of people haven't adopted it the effects of inflation on bitcoin is going to be twice as big. once is because of obvious reasons that as fiat loses its value, bitcoin gains more value against it. but another reason is that as inflation hits the economy hard people will start seeking safe havens to escape their failing economy and one of the very viable options in front of them is going to be bitcoin. with its phenomenal annual performance  there is nothing better to convert your inflating fiat to!

[Fesatmas]

Looking at the current inflation mechanism, only transmission of monetary policy remains within the conventional corridor. Let's look again at economic growth and inflation, which has almost reached even 5% in one year. This is especially clear when the complexity of the transmission mechanism in the US is related to changes in the role of other countries' economies.

Maybe you still remember the explanation from the "Quantity Theory of Money" which said that this messed up the role of the Dollar in the US economy regarding long-term monetary policy which only had an impact on inflation.

[sana54210]

Not sure how they did this 4 percent prediction, because I expect it even much more than this. As I can see, the inflation rate is rising each year and government tries promises to control it and they will usually try to decrease the rate by unfortunately using federal reserve dollars and printing too much money to increase the funds while they will make a bigger mistake by providing too much money supply which can be the reason for decreasing the value of dollar against gold and other assets.

That's the official one, things change individually a lot more. If you took college costs as the inflation rate in USA, there would be 10x and even more increases on average, if you took minimum wage then you would have nearly zero increase for the past 20 years.

Basically it all depends on what you take as your average, they put in this insanely complicated bunch of stuff and then they say it is 4% or less, but there are tons of stuff that got 5%+ more expensive. I am not American so I do not care about that, but in my nation it is said that we have about 7% in inflation whereas I can tell you that it is more than 30% very easily, it is drastic here, we are living a horrible period and I do not know what is going to happen if we keep this up. Long story short the 4% is official number and we may not consider that as the truth, it is just what they tell us but it is really not that low.