How often have I heard the sentence, “we need inflation so prices can increase”? Uncountable times. Inflation is seen and understood as a good thing in many economists’ and politicians’ minds. Inflationists institutionalized our economies for 100 years and have twisted the average consumer’s mind. The indoctrination of the inflationist mind has blinded the consumer and robbed him of his principles. Let me explain.
The psychology behind the Inflationist economies is that the government tries to prevent economic recessions by inflating the domestic currency to help people that need money. Money printing since 2008 has not stopped. The fact is that since the recession of 2008, we never fully recovered. In 2008 we started to realize how easy it is to print more money. Quantitative easing and negative interested rates basically led to the government’s movement handing out money for free to the public because “they needed it”. Do not understand me wrong here. Helping people is very good. However, that should not be the only action taken. The government is effectively doing by giving out money to everyone that asks for it is making everyone dependent on the government. We become addicted because as soon as a problem arises, we run to the government and ask for help. The government is happy to hand out money since that means that they can effectively control everyone by doing so. This has been going on for too long that consumer nowadays does not even understand the concept of money. You need a Bachelor of Finance to grasp the complexity of the markets created around the inflationist spirit.
By inflating the money supply, the long-term value of the money decreases, not only reducing your purchasing power but also the promised increases in salary loses its value. Inflationists have managed to teach a contradiction and make it seem as if it would be normal. The human exchange has never worked on Inflationist money schemes. The most recent example for that would be the Venezuelan currency that hyperinflated. Another good example is the Weimar Republic. Inflation is preached as the only possible solution to a problem that needs a far more complex solution than just inflation. Governments effectively rob you of your financial freedom and take away your purchasing power. They make us reliant on them and call it normal.
This is no secret, though. Investors as traders know this for ages and see investments as a store of value that might even promise appreciating purchasing power in the future. However, ordinary folks that can not afford investments are left to the inflationist greed.
Bitcoin promises a solution by unifying all the properties of an investment with the ability to be a medium of exchange. But many inflationists argue that the volatility of Bitcoin is a bad deal in comparison to the fiat currencies since they offer more price stability. However, if you look at the facts, while Bitcoin promises long-term appreciation in value, fiat currencies offer a depreciation in value in the long run. I ask you again, what sounds like a better deal to you? Bitcoin is not the perfect solution to all our problems, and I respect that, but it still is an alternative that offers a traditionalist approach in comparison to the current monetary system we are bound to use. Inflation is just as natural as deflation in a market and human beings need to understand that they should not try to change that. Whenever we tried to change the economies’ natural cycles by installing inflationary tools, we drove our economies against a wall.
Bitcoin matters because it will help educate everyday people and help them find the right way on how monetary systems should work. Imposing economic tools such as inflation are short term solutions to short term problems, and they should be regarded as such.
Printing more money and packaging a new stimulus packet are the solutions to all our problems in the inflations mind. But what the world actually needs is discipline if it comes to money.
For further posts on that kind of topic, check out my other ones:
The battle against consumerism – Bitcoin:
What makes bitcoin special?
Why is Bitcoin bullrunning?
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