Higher Inflation Is Here to Stay for Years

[jossiel]

The inflation, it won't be gone and it's going to happen for each country unless that country will perform very well and won't have that increase in inflation.

It's the cycle, the inflation will increase but to decrease it will be hard or at least won't happen.

While there's inflation, as long as you hold bitcoin, it's one of the ways to beat it.

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[countryfree]

I see 2 causes for the rise of inflation.

The obvious first cause is government' spending. Central banks have been printing money like there's no tomorrow, and this just can't go on forever.

But a second problem is with many shortages. I'm always watching closely the automotive industry, and it's facing hard times because of a shortage of chips. Nobody had seen that coming, but the result is that car prices are on the rise. There's also a home shortage because of scarce supplies in several countries, so houses prices are also on the rise, and much more than 3% per year. I've also noted this article a few days ago:

https://fortune.com/2021/07/08/steel-prices-2021-going-up-bubble/

Steel prices have more than doubled in a single year. Copper price is also red hot because of the surging demand for electric cars. I don't know when this will end, I guess nobody knows, but those are many signs that inflation will only get stronger.

[Lucius]

You're just like me from this side of Europe and even without thinking twice I'm 100% sure you've had at least 2 years of inflation over 100%, so what we should know indeed is that 3% or even 10% is nothing compared to what some have experienced but at the same time that even if this inflation doubles it doesn't mean the end of the world and suddenly everybody will dump the fiat currency and embrace some other kind of monetary policy.

There is something much worse than inflation per se, and that is war - so I can say that I have personally felt both evils on my skin, and if you ever wonder if it is harder to be hungry or to be in constant fear of death coming from the sky, you're actually just wondering what will kill you first. Such experiences help me a lot today to look at the current situation from a completely different perspective, because everything that is happening is so harmless given what I have experienced in the past.

Venezuela and even Salvador are still clinging just above full caveman style poverty because there is still a lot of cash flow from other countries like remittance and a bit of tourism, if the US goes dark that last lifeline is also cut, what will happen then?

I can only say that Europeans are largely responsible for the fate of these people, although some will say that it was a long time ago - but the consequences of Spanish and Portuguese colonization have left an indelible mark. Resource-rich countries like Venezuela should prosper in every way, and that's not the only case when we talk about Central or South America - aside from the corrupt politicians everywhere, it's hard for me to understand that nothing has changed for the better there for centuries.

As for emigrants who send money home, I can only say that some nations in the EU are also recording record inflows of money into domestic banks - even to the extent that they are trying to come up with some extra tax on all that money.

Dependency rates on international remittances are measured by the share of inflows in personal remittances in percentage of the respective country's GDP. According to this, the highest dependency rates on remittances in the EU-27 are observed in Croatia (6.6 % of GDP), Bulgaria (3.4 % of GDP), Latvia and Romania (both 3.3 % of GDP) in 2019 (see Figure 4)...

Of course, people always go for better jobs and opportunities, but small countries pay a big tribute to mass emigration, which is most manifested in the demographic collapse and survival of the pension system in the future.

[zanezane]

You don't know what you're talking about in your title OP, it's going to eventually subside, it's just that at this point we just can't see it so we think that there's no end to it. There's a lot of hyperinflation throughout history and all of them seem to subside in time and the country that was affected did recovered from the damage.

[seramania]

It's not going to be that case for years, it's just there's a pandemic that there's a high inflation rate, read the basics of inflation to know that your claim isn't true, yes there's inflation for years but if that is maintained at a lower point like 1 or 2 percent, it's actually a good thing for the economy since it stimulates economic activity.

yes that's right, I have read several articles about long term inflation due to the pandemic not true. inflation may only be a few years after the pandemic is over inflation will decline. I think this is normal because the market is not developing well and global economic conditions are also affected

[Gyfts]

Federal interest rates are going to stay low for years in the US, but I'm convinced that there is no coming back from this. You can't have the world's largest economy uncontrollably print trillions of dollars and short out the labor market with unemployment checks without any repercussions. Paper money supply is too big right now. US is something at like a 5.4 percent inflation rate according to the CPI -- target is about 2 percent yearly (a 2 percent interest rate is healthy, incentivizes spending so people are not holding onto currency, federal banking institutions consider 2 percent to be good for the economy), so on the road to tripling the target range.

[oHnK]

yes I agree with you, but in my opinion bitcoin is a store of value. Store of value itself is something that does not depreciate over time. Usually this medium store of value is rare and cannot be easily devalued. This is what causes Bitcoin to be categorized as a store of value. The best thing you can do with bitcoins is store them so you can protect yourself from inflation. Even though bitcoin is volatile, if it is withdrawn over a longer period of time (logarithmic chart), the value of bitcoin has remained or even increased drastically in the last 10 years.

BTC does have the function of storing value, even other functions such as speculation and transactions.  That is the basis of BTC being considered a currency, but what continues to be a problem today is the uniqueness of this currency which lies in a decentralized system and makes economists bothered especially those who are very pro-banking concepts.  If all countries support BTC then their fiat will not sell in society, and people's current wealth will be converted to BTC, won't that disturb many people who are already in their comfort zone.

[mindrust]

Wot? Haven't they recently told us that the inflation was transitory? Maybe what they really meant was it is transitory from low inflation to hyperinflation  What I really know is that you can't trust a damn word coming from a FED chairman's mouth. They are all muppets. How can you expect transitory inflation when you printed 2/3 of the total USD reserves in one year? 

[countryfree]

You don't know what you're talking about in your title OP, it's going to eventually subside, it's just that at this point we just can't see it so we think that there's no end to it. There's a lot of hyperinflation throughout history and all of them seem to subside in time and the country that was affected did recovered from the damage.

I do, and you don't. My title is a citation.

[jaysabi]

I've said it for a long time, but this time, I'm not making this up. It's from the WSJ.

https://www.wsj.com/articles/higher-inflation-is-here-to-stay-for-years-economists-forecast-11626008400

BTC holders shall not worry.

Inflation of 3% over the next several years compared with the extreme volatility of bitcoin isn't even a question.  The dollar wins hands down.  Your bitcoin could be worth $40,000 next month or $20,000.  That's not protection from inflation.  To actually protect against inflation, you need something that holds a steady and predictable value.  Not that I think people shouldn't own bitcoin, but they definitely need to not delude themselves into thinking they're protecting themselves from what is ultimately still a low inflation rate by doing so.

yes I agree with you, but in my opinion bitcoin is a store of value. Store of value itself is something that does not depreciate over time. Usually this medium store of value is rare and cannot be easily devalued. This is what causes Bitcoin to be categorized as a store of value. The best thing you can do with bitcoins is store them so you can protect yourself from inflation. Even though bitcoin is volatile, if it is withdrawn over a longer period of time (logarithmic chart), the value of bitcoin has remained or even increased drastically in the last 10 years.

More people say store of value now than ever before, but my point about that would be the same.  An asset needs to have a reliably predictable and steady value to be a store of value.  Bitcoin I wouldn't say fits due to its extreme volatility.

[Vishnu.Reang]

More people say store of value now than ever before, but my point about that would be the same.  An asset needs to have a reliably predictable and steady value to be a store of value.  Bitcoin I wouldn't say fits due to its extreme volatility.

I slightly disagree. An asset needs to have a value that doesn't go down drastically in the long term to be used as a store of value. If the value goes up in the long-term, then it is not an issue. And I don't think that stability and predictability needs to be there. If that is the case, then even gold can't be termed as a store of value. Because during the 2011-16 period, gold prices went down by 40%. If you talk about US treasury bonds, then in fiat terms the value is stable. But the returns are only around 1.1%-1.2% per year, while the current inflation rate is in the 5%-6% range.

[horrifiedx1]

I've said it for a long time, but this time, I'm not making this up. It's from the WSJ.

https://www.wsj.com/articles/higher-inflation-is-here-to-stay-for-years-economists-forecast-11626008400

BTC holders shall not worry.

Inflation of 3% over the next several years compared with the extreme volatility of bitcoin isn't even a question.  The dollar wins hands down.  Your bitcoin could be worth $40,000 next month or $20,000.  That's not protection from inflation.  To actually protect against inflation, you need something that holds a steady and predictable value.  Not that I think people shouldn't own bitcoin, but they definitely need to not delude themselves into thinking they're protecting themselves from what is ultimately still a low inflation rate by doing so.

yes I agree with you, but in my opinion bitcoin is a store of value. Store of value itself is something that does not depreciate over time. Usually this medium store of value is rare and cannot be easily devalued. This is what causes Bitcoin to be categorized as a store of value. The best thing you can do with bitcoins is store them so you can protect yourself from inflation. Even though bitcoin is volatile, if it is withdrawn over a longer period of time (logarithmic chart), the value of bitcoin has remained or even increased drastically in the last 10 years.

More people say store of value now than ever before, but my point about that would be the same.  An asset needs to have a reliably predictable and steady value to be a store of value.  Bitcoin I wouldn't say fits due to its extreme volatility.

save bitcoin and sell it when the bullrun occurs, I think it can avoid the inflation that is happening right now, but if we let it go I think it's still profitable. we can see in the last 10 years, the value of bitcoin is free from inflation, although high fluctuations exist in the nature of bitcoin. but if most countries accept it, I don't think the fluctuation is as big as it is now

[Ausgewielt]

Actually I can't believe inflation data that provided by government of my country. In my country, if I am not wrong the inflation is not 2% but 3% and even experts said that the inflation is 5% few years ago. I didn't check the inflation update yet but I hope the percentage is decrease. Inflation is my biggest reason to invest in bitcoin and other cryptocurrencies, I just want to safe my wealth. For me inflation is little bit like a silent killer.

[Vishnu.Reang]

Actually I can't believe inflation data that provided by government of my country. In my country, if I am not wrong the inflation is not 2% but 3% and even experts said that the inflation is 5% few years ago. I didn't check the inflation update yet but I hope the percentage is decrease. Inflation is my biggest reason to invest in bitcoin and other cryptocurrencies, I just want to safe my wealth. For me inflation is little bit like a silent killer.

The problem is with the way they calculate inflation. They don't usually give a sector-wise breakup of inflation. So obviously some of the assets that are less prone to inflation (electronics, foodgrains.etc) are grouped together with assets that are prone to inflation (such as crude oil, fruits/vegetables.etc). On top of that, real estate, bullion.etc are also added in, and in times of difficult economic conditions these assets will have a negative inflation. So in general, the inflation remains at 4% or 5%, eventhough groceries and other essentials may have gone up by >20%.

[Dragonfund]

I've said it for a long time, but this time, I'm not making this up. It's from the WSJ.

https://www.wsj.com/articles/higher-inflation-is-here-to-stay-for-years-economists-forecast-11626008400

BTC holders shall not worry.

The monetary system of government and central policy design has an immense effect which has birth inflation since the inception of money/fiat system as means of exchange.
It has been neglected for so long which I think even if they plan to provide a solution, it may lead to collapsed as I don't think FED can go without printing of $$ to survive the economy. We all see that during the pandemic when Trump fingers were showering money through pandemic release.
The last brrr has affect a common commodity you find out today. My question now is, what's the solution to cure this problem?

[countryfree]

Actually I can't believe inflation data that provided by government of my country. In my country, if I am not wrong the inflation is not 2% but 3% and even experts said that the inflation is 5% few years ago. I didn't check the inflation update yet but I hope the percentage is decrease. Inflation is my biggest reason to invest in bitcoin and other cryptocurrencies, I just want to safe my wealth. For me inflation is little bit like a silent killer.

There's truth in that.
Official numbers, be it level of employment or inflation, is quite often below reality.

[Silberman]

You don't know what you're talking about in your title OP, it's going to eventually subside, it's just that at this point we just can't see it so we think that there's no end to it. There's a lot of hyperinflation throughout history and all of them seem to subside in time and the country that was affected did recovered from the damage.

It would subside if governments stopped printing money but they do not so and as such it is going to continue, also it can end in two ways, the first one is already mentioned above and that is the best case scenario, the other path is that governments keep printing money and the hyperinflation keeps growing to the point their currency becomes useless and people decide to use a foreign currency or the government needs to create a new currency and do things right by not printing their currency like there is not tomorrow.

[blockman]

Actually I can't believe inflation data that provided by government of my country. In my country, if I am not wrong the inflation is not 2% but 3% and even experts said that the inflation is 5% few years ago. I didn't check the inflation update yet but I hope the percentage is decrease. Inflation is my biggest reason to invest in bitcoin and other cryptocurrencies, I just want to safe my wealth. For me inflation is little bit like a silent killer.

What country do you live in? you might find some data that circulates on the internet that includes information about your country's inflation rate. If you don't believe the stat that has been provided, you can always look for a better source on the web that can give you a satisfying answer that might give you close and accurate details. But the truth whether they've released that it's only 3%, 4%, or 5%. Inflation is there to stay and it will increase no matter what the situation gets you in your country. It's a good decision that you've chosen bitcoin to beat inflation but there are also other investments that have the same purpose as bitcoin.

[SquallLeonhart]

Venezuela and even Salvador are still clinging just above full caveman style poverty because there is still a lot of cash flow from other countries like remittance and a bit of tourism, if the US goes dark that last lifeline is also cut, what will happen then?

I can only say that Europeans are largely responsible for the fate of these people, although some will say that it was a long time ago - but the consequences of Spanish and Portuguese colonization have left an indelible mark. Resource-rich countries like Venezuela should prosper in every way, and that's not the only case when we talk about Central or South America - aside from the corrupt politicians everywhere, it's hard for me to understand that nothing has changed for the better there for centuries.

As for emigrants who send money home, I can only say that some nations in the EU are also recording record inflows of money into domestic banks - even to the extent that they are trying to come up with some extra tax on all that money.

I believe the reason why those nations do not get proper improvement is the fact that USA ends up doing covert coup all the time. They could literally just say "pick this guy or you will starve to death" in a secret way, like just do it, and then they could end up with the one that will do the best for them.

Venezuela is a very very oil rich nation, why do you think they are facing all these troubles when all the other oil rich nations have amazing power? Simply because they have/had president that doesn't want to bow down to USA and that's it, that is the whole reason why they are doing worse right now. Put a person who loves capitalism and USA, suddenly they will do better. So, what you have to ask yourself in their situation is this; should I let USA take over the control and live a better life? Or should have my independence and starve to death? Most of the times, not a tough question to answer.

[stompix]

I believe the reason why those nations do not get proper improvement is the fact that USA ends up doing covert coup all the time. They could literally just say "pick this guy or you will starve to death" in a secret way, like just do it, and then they could end up with the one that will do the best for them.

Yeah, the same bullshit excuse, it's because of the things the US does, the evil US, not because of the morons in charge
If the US was that evil why was Venezuela selling them oil till 2019 and never stopped doing so before the US said no?
If the US was so bad why was the national petroleum company of Venezuela owning refineries and gas stations (CitGo) in the US all the time?

Venezuela is a very very oil rich nation, why do you think they are facing all these troubles when all the other oil rich nations have amazing power?

Mexico has oil, Russia has oil, Nigeria has oil, Brazil has oil! I don't see people flocking there to live in those countries.
On the other side, we in Europe have barely any oil, yet...

Put a person who loves capitalism and USA, suddenly they will do better.

Of course they will do better because socialism means ruin and poverty for everyone immediately after you run out of the money you have confiscated. Just how many times must this happen over and over to finally understand there is no way to have a rich and socialist country.
Do you know a rich socialist country? And no, Denmark is not socialist, nor is any of the Scandinavian countries!

I can only say that Europeans are largely responsible for the fate of these people, although some will say that it was a long time ago - but the consequences of Spanish and Portuguese colonization have left an indelible mark.

Back in 1990 two of those African countries were above Romania and Bulgaria, while others were just 2-3 times poorer, now they are 10x, if you're going to tell me colonization has left that deep scars 40 years after independence then...how did others manage to do it?
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=1970&locations=GH-NG-BW-KE-GA-KR&start=1960
Just slide it to current days