Inflation overpowers the value of money

[EarnOnVictor]

Inflation exist because of fiat, for me they are just one.

You must be ignorant of this economics, inflation exists because of an economy, and whether it's fiat or anything else, the price of commodities may still rise. If you heard stories from the olden days when trade-by-barter happened, inflation also happened and it's simply because someone or sector(s) increases the price/value of their commodities/properties to sell and others follow that trend. It might go on like that until the situation is cautioned.

Not even Bitcoin can stop inflation, it's economic-bound. If the whole world stops fiat and starts spending Bitcoin, do you think there will not be inflation? Then you are a joker.

Inflation is induced by the economy and bad policies, not flat, except that people will know the effect through the country's currency (fiat). You guys are only mistaken this because of the investment opportunity in Bitcoin, but this will change if Bitcoin is being spent in place of other currencies.

[Sayeds56]

You left out a very important one: high energy prices, which affect everything. If gasoline and electricity prices go up, you not only pay more to fill up the tank and for the electricity in your house, you will also pay more for groceries, for example.
In fact, the inflation we have been experiencing for a couple of years now is mainly due to energy prices and massive post-covid printing. Then it was exacerbated by the Ukrainian war, but it started earlier.

Indeed, energy prices play vital role in influencing the fluctuation of inflation rate, and it is an important component of consumer price index (CPI). We have witnessed how sharp the prices of energy surged aftermath of Russia Ukraine war due to supply chain disruptions, which subsequently caused rapid increase in inflation. This situation serves as a good example that how fluctuations in energy prices can trigger sharp increase in inflation within short timeframe.

[retreat]

Actually talking about inflation is a complex matter and requires in-depth study on this matter. But as far as I understand that inflation is actually needed by a country to be able to control their economy and their currency. But of course the government's inability to control inflation will be fatal for them, because it will cause chaos in their economy and there will be many people who have difficulty being able to buy their needs because of rising prices. That's why smart governments need to be able to manage inflation and deflation in their countries so that this will not affect the economy and the value of their currency.

[Sayeds56]

Actually talking about inflation is a complex matter and requires in-depth study on this matter. But as far as I understand that inflation is actually needed by a country to be able to control their economy and their currency. But of course the government's inability to control inflation will be fatal for them, because it will cause chaos in their economy and there will be many people who have difficulty being able to buy their needs because of rising prices. That's why smart governments need to be able to manage inflation and deflation in their countries so that this will not affect the economy and the value of their currency.

You are absolutely right, inflation is a complex and multifaceted phenomenon, and its not always bad for the economy. Government often utilize this tool it to stimulate the economy and sustain business activities. In fact, it is better than deflation that slows down the economy and causes job losses. Therefore, it can play a constructive role in maintaining a healthy and dynamic economy when used prudently.

[sunsilk]

FINANCE TIP:  Never keep your cash savings at a regular type bank accounts such as Chase/Wells Fargo/etc. Make sure you use online banks (or some credit unions) which offer much higher interest rates.  Bannkrate.com does a good job of showing who's currently got the best rates.  Just for example Chase banks and Bank of America (the worlds two largest banks)savings accounts have an annual interest rate of .01%.  Ally Bank has an annual interest rate of 4%.  One is keeping up with inflation and one isn't even close..ie you're losing money in it!  INSANITY

I agree, there are online/digital banks that are offering better rates for an annual rate if you ever choose them to deposit your money. And the catch is that you're also free to withdraw it anytime at your own will.

Before, I was a fan of time deposits but I've learned it all along that it's good to get into it if the rate defeats the inflation rate that your country is experiencing. Otherwise, it's much better not to keep it there and find a better asset or investment that will earn more than the inflation rate so that you'll retain your wealth and its value.

[bayu7adi]

How investing in bitcoin helps avoid inflation. The price of bitcoin goes up and down. There is no certainty that the price will constantly recover. The price may reach its limit and bitcoin may be abandoned, pushing cheaper assets into the mainstream

Bitcoin's volatility indeed confirms its potential as a haven against inflation, as it remains impervious to the abrupt impact of inflation in any given country. Instead of allocating 100% of our assets to FIAT, which is inevitably prone to annual inflation, I find it wiser to diversify a portion of our holdings into alternative assets like stocks and Bitcoin. Diversification becomes essential to safeguard the value of our assets, or even better, to witness them grow.

However, I must acknowledge that Bitcoin carries substantial risks. As you rightly pointed out, any asset, including Bitcoin, could face the risk of being abandoned by the masses. We cannot prevent people from selling their Bitcoin and potentially deserting it. Undertaking such a venture requires a willingness to assume considerable risk and mental fortitude.

In essence, exploring avenues like Bitcoin can be a prudent strategy to protect against inflation, but it demands a careful balance of risk management and preparedness to face the uncertainties that come with it.

[el kaka22]

This is why we pick bitcoin instead. Because inflation makes bitcoin price go as much down as possible and that is the best thing to do for bitcoin, I believe that it would be best if we avoid using fiat as much as possible since the return is not there and the results are not that great. If you keep on investing into bitcoin instead of fiat stuff, then you are going to end up with a lot of profit in the end.

I bet that it is going to take a while, it is not going to be simple, but if you can make that work then I am sure that it will be not that difficult to make a profit when you can. Bitcoin will surely go up on the long run, and one of the reasons for it is the inflation at fiat as well, hence why bitcoin is much better option.

[someone703]

Borrowing is not a bad economic policy and it is an important part of the financial performance of many countries. Borrowing to finance capital projects such as infrastructure can bring many economic benefits. When a good infrastructure will provide the necessary support and facilities for business activities and investments. Thereby encouraging domestic investment and attracting foreign investors, contributing to economic growth and creating job opportunities.

Mainly how the government manages loans efficiently and fairly. If they use loans wisely in potential projects, it will contribute to creating long-term economic benefits. On the contrary, if the balance is not well balanced, it will cause inflation problems and destroy the country's economy quickly.

[icalical]

Borrowing is not a bad economic policy and it is an important part of the financial performance of many countries. Borrowing to finance capital projects such as infrastructure can bring many economic benefits. When a good infrastructure will provide the necessary support and facilities for business activities and investments. Thereby encouraging domestic investment and attracting foreign investors, contributing to economic growth and creating job opportunities.

Mainly how the government manages loans efficiently and fairly. If they use loans wisely in potential projects, it will contribute to creating long-term economic benefits. On the contrary, if the balance is not well balanced, it will cause inflation problems and destroy the country's economy quickly.

Totally agreed, loans is necessary for certain country especially for a country that has rapid growing economy. The countries that has issue with their loan are mostly because the government is corrupt. If the government use the money to grow the people's economic inflation wouldn't be anything to worry.

[uchegod-21]

Lack of purchasing power which is caused by inflation is encouraging economic uncertainty, and this is because many nations has been found wanting in production capacity, instead they encourage importation of consumable goods from other countries, the country involved will therefore put up a policy, that will compel the consumer country to exchange there currency to the currency of the country, they are purchasing from, this will further weaken and stagnate there currency to trigger high inflation rate.

The causes of high inflation can be attributed to the following:
1. Excessive Government borrowing
2. Unwanted and unstable domestic policy
3. Unsatisfiable or lack of domestic production

As sad as it is, we all should know that inflation has come to stay. Government fiscal and monetary policies have not been able to stabilise the prices of goods and services.
Fiat keeps devaluing as the day goes by. This is why we should engage in investment that will give us multiple streams of income to keep up with the world's current economy state. And also we should try to save in bitcoin or cold which will fight against inflation.
The issue of of inflation is not peculiar to just one country, it is universal.

[odunybiz]

The causes of high inflation can be attributed to the following:
1. Excessive Government borrowing
2. Unwanted and unstable domestic policy
3. Unsatisfiable or lack of domestic production

Yes, excessive borrowing can cause a high inflation to a nation because we have saw how many countries struggle to overcame this attitude of borrowing money that made them to lost some of their expensive resources just to ensure their name be erase among the countries that are in debted. Once there is unwanted domestic production in a country, it hard for such country to overcome inflation because that is some of the road for inflation to have access to a country and put the citizens into hardship through out the year. Bad leaders can also cause inflation in a country because once they have access to loot the government money, it will cause massive inflation that will take the government many years to recover.

Energy price really have great effect on price of commodity. For example here in my country, the price of petrol went up twice recently and this has cause price of commodity to go up causing more inflation. Increase in energy price can't be left out as a factor causing inflation.

[Aanuoluwatofunmi]

Not even Bitcoin can stop inflation, it's economic-bound. If the whole world stops fiat and starts spending Bitcoin, do you think there will not be inflation? Then you are a joker.

I think there's a need to understand this inflation from the perspective of currency and asset values, once it's all talking about fiat economy system, inflation must set in because the value of fiat currency cannot sustain the economy without being affected, that's the running of the policies right from time, regarding bitcoin since the introduction of cryptocurrency, bitcoin has a separate network and run a different system incomparable to the centralized fiat economy runnings, bitcoin cannot change the inflation from fiat currency but can exist independently without being affected by inflation, so if anyone could want to have a different experience outside the inflation role then adoption of bitcoin could be a preferred solution because as inflation continue to occurs the value of bitcoin keep increasing over time because bitcoin is a volatile currency while fiat Wil keep loosing value over time when inflation looms in.

[bussybuddy]

Overall, fiat provides users with flexibility and convenience when it comes to trading and storing value. It has a high level of liquidity, making it easy for users to convert to different currencies and make daily purchases.

But while good, fiat also has disadvantages because it is prone to inflation and loses value over time. Besides that is heavily dependent on the central bank, to maintain its value. Therefore, a stable economic environment and public confidence in the currency will help reduce the risks associated with fiat.

[AnonBitCoiner]

You left out a very important one: high energy prices, which affect everything. If gasoline and electricity prices go up, you not only pay more to fill up the tank and for the electricity in your house, you will also pay more for groceries, for example.

In fact, the inflation we have been experiencing for a couple of years now is mainly due to energy prices and massive post-covid printing. Then it was exacerbated by the Ukrainian war, but it started earlier.

That's true because with the increasing price of petrol every other materials also get expensive so if the price of petrol and gasoline  are under control then inflation will also be able to Control.

Inflation does not effect only poor but its also a big threat for wealthy people and everything is of higher cost instead of vast amount of resources present in our country. May be the country's leader do not have any idea about the uses of these resources or may be they are scarcity of these resources but what I know is that here is abundant of gas, petroleum and water resources so they should worked on it to provide for each and every individual of a country.

[usekevin]

That's true because with the increasing price of petrol every other materials also get expensive so if the price of petrol and gasoline  are under control then inflation will also be able to Control.

Inflation does not effect only poor but its also a big threat for wealthy people and everything is of higher cost instead of vast amount of resources present in our country. May be the country's leader do not have any idea about the uses of these resources or may be they are scarcity of these resources but what I know is that here is abundant of gas, petroleum and water resources so they should worked on it to provide for each and every individual of a country.

Actually every one had their own reasons for borrowing,So we can’t blame the people who borrowing money.But borrowing will steal your peace and happiness,after borrowing money you are forced to pay certain amount on a fixed date.In a meanwhile you get any financial problems,but the borrowers will not consider it mostly.Because their fully motive will be getting additional money as an interest at your hard situation.So my suggestion is only borrow the money at the emergency,don’t borrow money for your luxuries life.

[Ultegra134]

Indeed, energy prices play vital role in influencing the fluctuation of inflation rate, and it is an important component of consumer price index (CPI). We have witnessed how sharp the prices of energy surged aftermath of Russia Ukraine war due to supply chain disruptions, which subsequently caused rapid increase in inflation. This situation serves as a good example that how fluctuations in energy prices can trigger sharp increase in inflation within short timeframe.

The issue with inflation measures is that they're highly inaccurate in presenting the broader picture. As you've already mentioned, energy, and I'll also add fuel prices, play a vital role in inflation. Higher electricity and fueling costs mean an increased cost of production, which means an increase in the price of goods, which the consumer is faced with paying. However, inflation measures don't take into account the increase in energy and fuel; thus, when we hear about 10% inflation, it's actually a lot higher. Personally, I'm having to pay a lot more money for fuel and energy bills than I used to.

I agree, there are online/digital banks that are offering better rates for an annual rate if you ever choose them to deposit your money. And the catch is that you're also free to withdraw it anytime at your own will.

Before, I was a fan of time deposits but I've learned it all along that it's good to get into it if the rate defeats the inflation rate that your country is experiencing. Otherwise, it's much better not to keep it there and find a better asset or investment that will earn more than the inflation rate so that you'll retain your wealth and its value.

All banks offer poor interest rates that can't compete with the increasing inflation, even at normal periods when it isn't spiking like it currently is. The only way to counter inflation is by investing in assets, such as stocks or bonds.

[STT]

fiat provides users with flexibility and convenience

It is convenience and that rule of law which makes it so dominant but its all lost if you cant go to sleep and retain most of your value you had when you saved it there.   Savings that lose value are a horrible irony and waste of time when it really slips out of control.   There is point where every FIAT currency just has to give up, they cannot pay their debt and printing more is pointless.
  Many modern countries are in a similar situation to Greece with overwhelming debt spent on projects not yielding any benefit long term just spent money that cannot be expected to be returned.   The difference being they have retained the ability to print off new money to pay off the old debtors, its a soft default not hard but all the same value is lost in the process and many countries have repeated that loss to debt holders many a dozen or hundred times.   Eventually we require an alternative despite government mandating usage of their particular branding to paper transfer of value, the fungibility and liquidity I think fails to maintain the status of any modern FIAT currency, very few retain the ability to actually back their paper with a promise to exchange for worth on demand.

In Venezuela or similar its a weight of 10 lbs of paper to buy  1 lb of meat and its probably become worse since I saw that video.   All countries do this and all the Federal reserve promises to do for example is maintain orderly markets, they give no promise to keep value retained only not let slip entirely the rope holding up the façade .

[tbct_mt2]

fiat provides users with flexibility and convenience

It is convenience and that rule of law which makes it so dominant but its all lost if you cant go to sleep and retain most of your value you had when you saved it there.   Savings that lose value are a horrible irony and waste of time when it really slips out of control.   There is point where every FIAT currency just has to give up, they cannot pay their debt and printing more is pointless.

They as governments have no limits, no governmental restrictions to prohibit themselves in printing more fiat currencies. Their fiat currencies can be printed more and more, no caps. Do they consider their printings as risk of their fiat currency value?

I believe they do know about that risk but they don't mind because if they don't print more money, their governmental operations will be halted and more political problems will occur in their societies. The wealth of their citizens and purchasing power of their national fiat currency are not what they care most.

In Venezuela or similar its a weight of 10 lbs of paper to buy  1 lb of meat and its probably become worse since I saw that video.   All countries do this and all the Federal reserve promises to do for example is maintain orderly markets, they give no promise to keep value retained only not let slip entirely the rope holding up the façade .

The Covid-19 pandemic and massive QEs in many nations came very suddenly but they gave us many red flags. The story of Venezuela is very old and hyper inflation in that nation started years ago, long time before the pandemic outbreak but I agree that it is a classic story about failure for fiat currency and central bank.

[khiholangkang]

Basically, yes, the value of a currency will decrease in price due to inflation. Inflation is an event where there is too much money in circulation, but the ecosystem uses it a little, which makes the exchange rate lower. In my opinion, there is actually no term "inflation beats the value of money" because Inflation is another word for the decline in currency value.

And this is related to monetary policy, economic policy, taxes, and others related to the rise and fall of money productivity in terms of usability, control of supply and demand, which results from policies that are set into the economic system.

If the policies issued do not have calculations that meet the needs and standards of macro and microeconomic developments, it will cause uncontrolled currency failure, as happened in Zimbabwe.

[tygeade]

Actually talking about inflation is a complex matter and requires in-depth study on this matter. But as far as I understand that inflation is actually needed by a country to be able to control their economy and their currency. But of course the government's inability to control inflation will be fatal for them, because it will cause chaos in their economy and there will be many people who have difficulty being able to buy their needs because of rising prices. That's why smart governments need to be able to manage inflation and deflation in their countries so that this will not affect the economy and the value of their currency.

Well, there is a need for growth, and there is also too much growth over short period of time. If you have 2-3% inflation that's not bad, that means growth and that should happen, people can get that much in their salary increases as well and could grow in position until they are a bit late, that way everyone lives a happy life and all goes well.

However, because there are situations like 2008 and 2020, we end up with high inflation that ruins peoples money and investments, and that causes people to be falling short of what we are talking about here, and that should be important to remember. I know that it takes time to handle all of this, but if you can, then you are going to do as well as you could hope for.