Inflation is an invisible tax. It has no tax rate and no tax agency. If you have 100 dollars today, it won't be reduced and still in your wallet tomorrow, but it is shrinking constantly.
How to protect your purse? Before the outbreak of the epidemic, the balance sheet of the United States remained high. In history, the United States raised the debt ceiling nearly 100 times, and the government closed-door show and debt default show were staged alternately. Every time, the money printing machine was started without any suspense, but I want to tell you that compared with the dollars printed by the Federal Reserve after the outbreak of the epidemic, it can only be regarded as dwarfed. In order to express it more intuitively, I looked up a lot of information and got the following data. Nearly 40% of the total US dollar was printed after the outbreak of the epidemic.
It has been more than 100 years since 1913, when the Federal Reserve System and the US dollar were established. There have been many political and economic crises in the past hundred years. The Cold War finally laid the foundation of US dollar credit. However, until the eve of the outbreak, the cumulative issuance of US dollars only accounted for a little more than 60% of the total US dollars, and the remaining nearly half of the US dollars were printed in these two years.
Someone asked Powell, the chairman of the Federal Reserve, "You have printed so much money, aren't you worried about triggering asset bubbles again?" Powell replied, "We don't pay any attention to the change of asset prices in a certain direction at all, we just hope that the market can play a role, which is partly due to our work." What Powell said about the role of the market and the work objectives of the Federal Reserve are actually mainly two data, namely, the data of employment and inflation. In other words, if the employment rate is not up to standard and inflation is not soaring, the Fed doesn't care about asset prices.
This gives us a reminder that employment and inflation in the United States are related to the direction of the Federal Reserve's monetary policy, and will eventually affect our money bag. Because the Federal Reserve releases liquidity, it buys various assets every day. Rich people, big companies and big institutional investors can get cheap credit from the central bank, and then use this credit to buy assets. With the skyrocketing asset prices, the gap between the rich and the poor in the whole society has been widened. The income of ordinary people is affected by prices, and the wages of ordinary people will increase with the rise of prices. You can't starve people to death on a large scale, can you? Look at the performance since the epidemic in the United States, the assets of the rich who possess wealth are turning over, and the poor who create wealth are losing their jobs, but they have to rely on government relief! This kind of wealth flow and the increasing gap between the rich and the poor are commonly known as financial shuffle.
Someone asked Powell, what do you think of the gap between the rich and the poor and social equality? Powell said that equality has been bothering us for more than 40 years, but it has nothing to do with the Federal Reserve's monetary policy! I feel that Powell studied Tai Ji Chuan, and he pushed out 500 meters with one pole, leaving the responsibility clean. Powell said that keeping an eye on employment and inflation, but he didn't know that inflation was tricky. Some wise people worked out a seemingly reasonable calculation method of cpi, which is an index of inflation, that is, the price index. He controlled this inflation to a great extent by choosing which commodities should be counted and which commodities should not be counted. In other words, the inflation data we are seeing now is the data of makeup, which the Federal Reserve wants people to see.
Of course, the Fed also wants people to see that they are trying to control inflation. However, in daily life, people's feelings are not like this. Their feelings are very different. They think that many commodities, that is, prices have risen sharply. There are still some things that are cheap, but their weight is less, or after the company laid off employees, the jobs of the laid-off employees fall into the hands of those who have not laid off employees, and their wages have not changed, which are all disguised inflation.
Why do we talk about dollars today? Because dollars are the world currency, and the expansion and contraction of dollars affects the global economy. The release and collection of water by the US dollar also has the same effect on other countries' economies that caused the directional flow of wealth and widened the gap between the rich and the poor. America's harvest of wealth from other countries is called financial shuffle.
How to avoid being caught by financial shuffle? In September last year, the legislation of El Salvador confirmed that Bitcoin became legal tender. In just a few months, this small country in Central America, which has long been used by American financial shuffle, went further and further on the road of Bitcoin. Supermarkets, restaurants, hotels and even McDonald's in El Salvador have started to pay with bitcoin, as well as atm machines that use bitcoin to send money and so on. El Salvador is the first country to use Bitcoin as legal tender, and its result remains to be seen. But as a self-help method, he played an exemplary role.
Let's talk about bitcoins. The total number of bitcoins is fixed at 21 million. Since its birth, 18.54 million bitcoins have been dug up. Now, the average output is 900 bitcoins a day, which is 328,500 bitcoins a year. 328,500 divided by the current total bitcoin of 18.54 million, the annual inflation rate of bitcoin is 1.77%. No legal tender in the world today has an inflation rate lower than 1.77%. Economic and social development is always achieved under the condition of moderate inflation. The moderate inflation of legal tender can stimulate the increase of production and consumption, and bring about the improvement of living standards and technological progress.
So in the long run, the dollar will be in a downward trend for a long time, and its purchasing power is constantly declining. Although bitcoin fluctuates greatly, it is a long-term upward trend, and its quantity is locked. The fluctuation of bitcoin is mainly due to the instability of people's consensus on it. Because bitcoin was born only 13 years after all, people know that bitcoin is on the rise for a long time, but when bitcoin rises to a certain degree and profit-takers sell it together, it will also resonate, causing great panic and causing bitcoin to fall.
However, the consensus of Bitcoin is always increasing gradually. With the increase of consensus, more people will buy Bitcoin, which will make the price of Bitcoin rise again. Judging from the external environment of Bitcoin now, after the flood, legal tender overflows and prices rise, but the power of Bitcoin is relatively stable, which will lead to price rise. Therefore, in the long run, people will tend to spend dollars, because they will continue to depreciate, and they will buy bitcoin and save it, because the consensus on bitcoin is constantly increasing, and the demand will also increase with the consensus, becoming more and more valuable.
Forbes once predicted that with inflation, workers' real salary and purchasing power will decline relatively, and Bitcoin will become a dollar substitute against inflation, just like gold.