The concept of currency debasement

[Poker Player]

Today I would like to comment on this concept that I am hearing more and more about. Traditionally we talked about inflation as an index that reflects the rise in prices, but with the massive printing of the last few years and knowing that the components of the basket are chosen to manipulate the index I think it is becoming increasingly clear that it is not a reliable concept.

I have calculated inflation for the Eurozone over the last 5 years and according to a inflation calculator it has been 33.1%. As I was not sure how to calculate the currency debasement (although I have some idea) I asked ChatGPT and he tells me that the debasement of those years is between 7 and 8% on average, so when compounded over the 5 year period it gives a debasement of 50%. I don't trust ChatGPT 100% but the comparison is in line with the analysis I have seen of CPI vs debasement in the USA.

In other words, if 100 euros today only buys what 67 euros in July 2019 according to the CPI and only buys what 50 according to the currency debasement, where have the other 17 euros gone?

The answer is they have gone to financial assets and the one that has best attracted that capital has been Bitcoin.

[Findingnemo]

Currency has been the biggest scam of all time since 1933 for euros and 1971 for dollar and everybody understand the gold standard abandoned resulted to these kind of crisis. Government always fool their people with wrong data and sometimes those official numbers can't even be in acceptable level than reality and this is not exception to any government in this world.

The proper way of indexing the currency value will be comparing it with the gold then we realise how much we are trapped in this shitty centralized system which they call it as money.

[WillyAp]

Currency has been the biggest scam of all time since 1933 for euros and 1971 for dollar and everybody understand the gold standard abandoned resulted to these kind of crisis. Government always fool their people with wrong data and sometimes those official numbers can't even be in acceptable level than reality and this is not exception to any government in this world.

Luckily for us you are not in charge of any finance aka money.
Only due to loosing value its a scam?

[franky1]

Currency has been the biggest scam of all time since 1933 for euros

euros didnt exist before 1999

[GeorgeJohn]

Currency has been the biggest scam of all time since 1933 for euros and 1971 for dollar and everybody understand the gold standard abandoned resulted to these kind of crisis. Government always fool their people with wrong data and sometimes those official numbers can't even be in acceptable level than reality and this is not exception to any government in this world.

The proper way of indexing the currency value will be comparing it with the gold then we realise how much we are trapped in this shitty centralized system which they call it as money.

if you don't understand the bases of cryptocurrency and other cryptocurrencies you will not know that scam is every where, if you observe very well you will know that scam is everywhere you're,  so from my ways of understanding the cryptocurrency just make a research about it very well, so I know quite well that cryptocurrency is all about a fast transaction across other nations and that has been the reason while people like to invest in bitcoin.

So scam is everywhere and when looking around it's clear that you can be scam with anything you're interested of, including gold and other things you that can give you money.

[tottong]

Today I would like to comment on this concept that I am hearing more and more about. Traditionally we talked about inflation as an index that reflects the rise in prices, but with the massive printing of the last few years and knowing that the components of the basket are chosen to manipulate the index I think it is becoming increasingly clear that it is not a reliable concept.

It has to do with the value of goods that continue to rise and money loses value for the process of buying and selling.
So people say the value of money never increases for the sake of numbers and in fact money loses its purchasing value for the same goods in 5 or 10 years.
That's why there is a lot of deception from fiat currencies and we are forced to follow their system which in reality loses value.
Why do people see bitcoin as a step change before because we don't lose value when holding it and it's exactly like holding gold for the process used, both buying and selling goods in the past in the sense of barter.

If that is true then there is nothing wrong in saying run to the assets as they are indeed much more reliable there especially for bitcoin which we know very well here.

[Poker Player]

Currency has been the biggest scam of all time since 1933 for euros and 1971 for dollar and everybody understand the gold standard abandoned resulted to these kind of crisis.

  The Euro was born as a currency in 1999. Aren't you mistaking that for the Executive Order 6102?

The proper way of indexing the currency value will be comparing it with the gold then we realise how much we are trapped in this shitty centralized system which they call it as money.

That was the only way we had until recently, now we also have Bitcoin.

Luckily for us you are not in charge of any finance aka money.
Only due to loosing value its a scam?

if you don't understand the bases of cryptocurrency and other cryptocurrencies you will not know that scam is every where...

I don't know what you two are about. Aside from the error I mentioned, what Findingnemo says makes a lot of sense. Since the gold standard was abandoned, currency became a scam, that's why it is called fiat currency, because it is not backed by anything and can be printed as much as it pleases.

What I wanted to focus on here is the difference between CPI and the debasement of the currency, but you two smart guys don't get into it either.

[gunhell16]

Currency has been the biggest scam of all time since 1933 for euros and 1971 for dollar and everybody understand the gold standard abandoned resulted to these kind of crisis. Government always fool their people with wrong data and sometimes those official numbers can't even be in acceptable level than reality and this is not exception to any government in this world.

The proper way of indexing the currency value will be comparing it with the gold then we realise how much we are trapped in this shitty centralized system which they call it as money.

As far as I know, dude, in 1933, euros didn't exist, although in 1971, gold was abandoned by the US during these times. In my understanding, the dollar by this time can no longer be directly exchanged for gold; this is a significant event in global monetary history, as far as I know.

Although those of us who know the centralized system are not really happy with this system, there is nothing we can do but follow in the end. That's all.

[Algominer2]

There is something we can do my friend - hold Bitcoin! 

To be fair, holding just about any asset (other than fiat currency) will do the job, but some assets will move much faster than others. I choose to hold BTC and some tech stocks as the fastest moving horses in the race against debasement.

[Helena Yu]

I feel like both of them are same thing because anything that affects CPI (spend money to buy commodity, which make the commodity scarcer and increase the commodity price), also affects currency debasement. Something that affects currency debasement (printing new money, which increase the money supply and lower the value), also affects CPI.

I choose to hold BTC and some tech stocks as the fastest moving horses in the race against debasement.

Tech stocks seems risky now, AI hype is over.

[Minor Miner]

Currency has been the biggest scam of all time since 1933 for euros and 1971 for dollar and everybody understand the gold standard abandoned resulted to these kind of crisis. Government always fool their people with wrong data and sometimes those official numbers can't even be in acceptable level than reality and this is not exception to any government in this world.

The proper way of indexing the currency value will be comparing it with the gold then we realise how much we are trapped in this shitty centralized system which they call it as money.

Population increases, demand increases, supply and demand are imbalanced. If the gold standard continued today, no government would have enough gold to print more money. That would limit the economy and the poor would be further eliminated from the world because they would not be able to own 1$ if the gold standard remained in place today.
There are pros and cons to getting rid of the gold standard, let's not just look at the bad side and jump to the conclusion that the government is running the world's biggest scam.

For example, during the 2020-2021 Covid pandemic, the entire economy was closed, if the Government did not print money, how could the world survive during that period? How could we have had the crazy price surge that pushed bitcoin to $69k if the government didn't print money? But the price we will have to pay is inflation and the economic crisis we have been facing since 2022.

[WillyAp]

Aside from the error I mentioned, what Findingnemo says makes a lot of sense.

Go ahead tell us what made sense according to you?
That values devalue is kind of logical. That value should grow with age remains to a few items.
Wine to a certain degree and years.

Lets see if Bitcoin is as valuable in 50 Years.