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

[jaysabi]

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.
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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.

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[Porfirii]

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.

[wxa7115]

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?