Eroding Purchasing Power
Sometimes it's hard for people to understand the concept of inflation. I think this is partially the reason why when Economists talk about the financial situation of a country, most people tune out thinking it's not that relevant to their life, but of course this is not the case.
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I've also found quite common for people who live in USA to think that they are not affected as much by inflation. Maybe within the communities of crypto this is not the case(most are in crypto because they understand this), but to those who participate of the more common elements of economy, these facts, are completely missed. It's almost as if most operate with a short term memory and can't possibly remember a can of soda costing 0.75 cents just a decade ago.
Having the somewhat unusual life of a working musician, I travel a lot back and forth between USA and Brazil, and this gives me a different look into how the two economies interact. As you might guess, inflation in Brazil is considerably higher, but attempting to think in dollars while working with Reais (the Brazilian currency) is very ineffective to measure purchasing power and vice versa.
Worker salaries are adjusted much faster in Brazil due to the higher inflation (or should, at least) with the idea of keeping the purchasing power of the people within a healthy range while promoting spenditure. However, If hyperinflation takes place eroding the purchasing power too fast, the economic death spiral becomes extremely obvious.
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This delicate system is constantly being corrupted. Banks acting as governments get to do as they please, making up for their mistakes by simply printing more money. How do get away with it? Where does the "money" come from, the overprinting that is? From the people, from their purchasing power.
This is precisely why I believe now more than ever, that despite all the challenges we are facing today on the cryptocurrency ecosystem, we are interacting inside the right system. The only one I'm aware of that has the potential of removing the ability for manipulation and theft (that is exactly what it is) from the people who participate of the economy.
I decided to write about this today, because I think this bit of knowledge is very important, and those who are feeling negative about cryptocurrencies should do an extra effort to remember this. Don't misunderstand me, I would love to see cryptocurrencies rally again right now, but this thing we are doing is not about today, it's not about double digit gains in a week. It's about taking back control, and having a system of true accountability.
Let's not forget the big picture…
I live in Brazil and I know what inflation means and the harm it makes to the entire economy of a country.
You can thank the brilliant government clowns, and the Quantitative Easing Programs (1, 2, and 3) that they insured us was not going to cause inflation. I feel like everything has become sooo expensive and people just act like it is normal.
Thanks for bringing this up!
Nice ..
I liked this way .. great advice from you
Thanks for sharing..
I believe also that we are interacting within the right system, will it be this system that gets us through ? maybe or maybe not , could it be a evolution of this system. who knows , but the system definitely needs changing, Great post , thanks for sharing
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@chbartist I think so indian government ban crypto after 5th july...... 😂😂😂😂😂😂
May be
Why do we believe our governments? Why do we are bound to use existing banking systems? Why we always go for traditional investments and following existing educational systems?
Do you know why?
Because we are brain washed... We here in this world always follow what our ancestors told us to do.. I am not telling that they were wrong.. I respect them very much and also follow them.. But during those days people were unaware of corruption because of less transparency in the system.
With new innovations and technology we are now able to understand and have a better picture of what is happening around us.
Blockchain is the next big revolutionary tech that enables people to bring transparency into the system. One day it will definitely replace the existing banking and governing system....
No matter what happens in the crypto market if you believe in its future then you will definitely want to be a part of it....
Thank you guys ... Keep posting...
No no, the reason is because if you don't you will get stripped from your freedom. " Do as you are told, or fear for your life and/or freedom ". And yes, crypto is the future, and government will try to withhold their citizens from the freedom of use of crypto. Some already are yes.
yes @bibekchandra i think you are extremely right...because our governments are corrupted ..and i think ina few years they will be replaced by blockchain...thanks for your information @bibekchandra
waao excellent post @bibekchandra..i beleive in blockchain and have a strong belief that blockchain will change current traditional banking system and government decisions....
what is thinking on crypto currency relly comming soon and wait hold if any
solution?
Don't sell. Wait! All the best! @indiacrypto.
A wonderful project. I wish the project further prosperity, many subscribers,
who will be satisfied with a generous reward @chbartist
Many governments no longer focus on creating wealth, instead they only print money. This is what happend in Zimbabwe. With the hyper inflation which was faced there, most peoples savings were wiped out creating a major economic tragedy. With blockchain, the future is secured.
Many if not any government is knowledgeable in economics. They try to solve most of the problems by printing more money. Then they see more problems eroding, they print more. By the time they give up, they have made themselves wealthy and most of them don't care about the people, they see it just as a short term job. So in the end, they don't care about the mess they make, that is the next government officials job.
I totally agree I believe far too many people go through life with blinders on. They never look at the big picture because they are so distracted by their everyday routine. I think most people when they observe rising prices over the years just blame it on corporate greed (which does occur at times), but for the most part, it is inflation eroding the buying power of each dollar. The only viable alternative, in my opinion, is to use a currency that is not manipulated by the government, who can print dollars at will whenever necessary.
In my country (Ukraine) inflation is destroying our purchasing power, day after day. Prices rise up constantly, but salaries are always the same.
How I would solve that problem. Work for another most trustworthy currency, and spend only that currency. Ignore your country's currency for it is lower value.
another great post @chbartist
I noticed that you're active also on Ezira. would you also mind sharing your view on Ezira in comparison to Steemit?
cheers
Piotr
Thx @crypto.piotr. All the best!
Nice article. It’s tough in countries where they have hyperinflation. If economies are not well managed by government, the people feel the pain of this and have limited control in the matter. Democracy is important to hold governments to account.
Once dollars were backed by gold. Now, this practice has been abandoned. Now everything runs on the governments goodwill. This is illusion. There is no control on printing money. It instigates inflation and inflation reduces the real value of hard earned money of common people.
Inflation is not bad if it remains within a limit because it is the sign of demand that results in expansion of businesses but when it crosses limits, it becomes a menace. Example of Zimbabwe, Venezuela etc are not far away.
Cryptocurrencies definitely can change this scenario. They have potential but a lot of efforts needed to make them replace fiats.
The situation in Venezuela is one for the history books...
I see your point and agree with you. The worse of it all is that we, I mean the most of the people, we are not ready for a change like that. Don't get me wrong, I'm a sagitarian I love changes. But everytime I've tried to talk about cryptocurrencies with someone who doesn't know about it, he or she shout me out. Maybe it's my social milieu, or something like that. I've hope you're right, and we just need a reminder. But also, I wish that everyday someone else get to know more about cryptos and fall in love for it by understanding how it work and the potential of it all.
leodelara, I resonate well with your way of thinking. Most people are afraid of change and therefore feel uncomfortable about cryptos. I believe that the world will benefit hugely by using cryptos instead of fiat. Of course, this transition will take a great deal of time.
Unfortunately, I think that's true @carolynseymour. But I' hope if we talk about it, learn more about as we pass on what we learned, maybe, just maybe, it's going to be a little bit faster. But it's nice to see there are those who think alike.
You're welcome.
Once you get into cryptos, it becomes the only thing you want to talk about. kkk
Right?
yes you are right
Excelente post, @chbartist. Es una alternativa muy positiva el apoyo a la moneda virtual, para muchos ha mejorado su economía. Más aun si somos venezolanos. Mis saludos para ti.
me parece muy curioso que Venezuela esta siendo rescatada por los cryptocurrencies, algo que nadie espero.
Aunque usted no lo crea es así, steemit ha sido una bendición para muchos venezolanos. Mis saludos, @chbartist.
I wholeheartedly agree with you. What are your thoughts on the use of crypto in the greater community. I am not sure about where you are from but are you seeing any merchants taking crypto for goods that you need? Do you think that if we are going to have crypto move us forward that we are going to need to use it as a currency rather than a commodity, or is there another way?
That's the challenge but truth be told, not all cryptos will survive the purge to come, the ones that can make that transition will be the dominant ones, thousands will disappear
can u give me some tip how how i make my steem account more earnable
Is it write to explain?
I strongly agree with you, but over here no one is willing to take crypto for his/her goods which I need.
Greetings brother @chbartist, you are very right, we must support the cryptocurrency, tell me that I live in Venezuela, inflation is ending with all of us, we no longer find what to do to get out of this crisis, apart from praying to God ...
Today in my country the salary has increased again, and that is tragic for us, a coffee, in a bakery it costs twice as much as the daily salary. Here we are. If it were not for this world of cryptocurrency and Steemit, I do not know what would have become of us.
I can only read your post and contemplate, but I can not comment on what I have no power whatsoever, because I have not been there to support me yet, I feel sad when I see someone else who has been successful, why I can not be like them?
Average households are not seeing their arrival. Safety networks are rising interest rates for weak people and will use more than government budget. A little infrastructure is fine, but inflation is taking the average domestic income ahead of the average. As long as the hours of laborers are reduced and the state's least ministries of $ 15 million will also be helped and some jobs will be lost to save the bottom line.
Excellent share mate ! The future of currency & wealth is in cryptos! This goes to show the regulations by so called governments favors those who fall under the 80% on paretos rule. your rant has a deep insight indeed :)
Really this is very difficult for a common people to understand the economy! Therefore banks are taking full advantage if it.
This delicate system is constantly being corrupted. Banks acting as governments get to do as they please, making up for their mistakes by simply printing more money. How do get away with it? Where does the "money" come from, the overprinting that is? From the people, from their purchasing power.
.....very truly said @chbartist.....you have written the script very nicely..
Bank them selves have full control over your money, without their authorization you can not take a decision of investment of your hard earned money. What is this happening!!
In India also we, "crypto lovers" are very much disappointed.. the Central Bank of India has instructed banks not to do any kind of transaction from crypto to Fiat and vice-versa with citizens as well as crypto exchanges from 5th of July 2018.
This is not like fiat that you can print infinite number of fiat currency...here it is very difficult almost impossible to duplicate the crypto currency/bitcoin .
Hence I feel this technology will help to establish the economies in a fare manner. Govts. Will also think in a positive way to support this outstanding technology. We Indians also optimistically hoping a crypto rally again...
People in the US are just too naive to see the inflation that is going on in their country. Wages have remained stagnant (relative) for decades while prices continue to go up. We are existing in the limelight of an era of opulence, unaware that we are rapidly speeding towards a cliff.
But,...but,..QT 1 is "going to happen" lol
At this point though isnt inflation just a fact of life? Realistically, there is no true way to fix it, unless you just let everything go bust..then start over...I mean there are a ton of theories, but no real evidence that any of them work...
There is a way to fix it, and it worked. For example, lets take the Euro. Lets say the worth of the existing bills all over the world is 1000 Euro, then it should be backed by lets say gold. If you print more money, value of things even your income goes up. If there is less, value of things go down.
The problem is, the money doesn't really have a value because it isn't backed. So you print more, value of things stay the same. But that is way too simplified, you probably knew this. But what I'm trying to get at is, that if it is backed by something, it can be fixed.
Therefore, crypto, it always haves a fixed value, because the can never be printed more.
I feel like I made this whole response way too messy, my apology's for that, I'm quite sleep deprived.
You got a 30.28% upvote from @upme thanks to @chbartist! Send at least 3 SBD or 3 STEEM to get upvote for next round. Delegate STEEM POWER and start earning 100% daily payouts ( no commission ).
If you have small scale industries, do you think inflation will effect the economy of a country??
If you mean by small scale a small country, not really no. They will be influenced by other countries if they do trade yes.
If you mean by, for example the simple jewelry making. They will get affected by inflation, but they wont affect anyone.
Everything that has to happen will happen and in the end we can see that we worry too much, the best thing as you say is to stop along the way, to make the best decisions. In the case of you I think it is important to reduce stress as much as possible and in our hope that this boat will return again while we continue studying and learning from this intricate world fazul
The other way to fix inflation is to set a country's currency to a rare metal or natural item that is not abundant but has intrinsic value like gold.
China has already influenced oil nations to have gold back currency to trade for oil.
Ya sometimes knowledge is important to take appropriate steps at such times
I hope your purchasing power goes to zero and you lose all your money
@havok777 I hope you building your live with much success, peace and be very, very, happy.
No JoGreat news
Great news
You're right, friend, however, despite the inflation in Brazil, the Brazilian has the ability to acquire whatever he wants (with effort). . . There are countries (like mine) that even with the greatest of efforts you can't afford, for example, "A phone". But it doesn't take away your reason. . . . greetings!
I live in India
Please follow me
https://steemit.com/@moneyking1
i sometimes get confused how the resourceful countries like brazil suffers from inflation
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Excelente post ++++++
What do you think will happen to existing Crypto-Currencies, once U.S. Crypto-Coinage is activated...??? I'm the only one writing about it...
Hello 😊 i am new here steemers. nice posts 😀 hope you check out mine in the future hehe
te segui @xion30 saludos
Congratulations @chbartist!
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muy interesante tema creo que la economia no debe ser estudiada solo por economistas va mucho mas alla que solo numeros y digitos depende del funcionamiento de la propia vida hace poco escribi algo de fotosisntesis y economia lo curioso es que este proceso participa directamente en el crecimiento o decrecimiento de la economia pero nunca encontraras el termino en ningun libro de economia considero que la teoria y la vision de la economia esta obsoleta y debe reescribirse replantearse para el bienestar de todos los habitantes de este mundo
Thanks for sharing . Information makes man causious to face and eliminate difficulties
What explains the hyper activity of cryptocurrency? Im still quite reluctant about investing in cryptocurrency.
Enflasyon oranı ülkede yapılan yolsuzluklarin oranına eşittir enflasyon oranı ne kadar yüksek olursa yapılan hırsızlığın o kadar yüksek olduğunu gosterir
Wow cool,Grate and Amazing choice this