Imagine a million dollar home.
The price tag is One Million Dollars.
Now, if we go back in time, we can always find that that home at some point in time was priced at $1.
Yes, that is right, one dollar. Now I understand a lot of homes are new and would never have started at $1, but we can find the land at a point in time and likely a home built on top and it was priced at $1.
Now imagine we go back in time, and you was the owner of that home.
You owned that home free and clear and you put it to market. You sold that $1 home and kept the money in your pocket.
You made your will and handed that $1 back to your children because it would be worth something some day - right?
So, let us say that this was the 1700's, and some time goes by and every one of your descendents decided to put it in their will that their children gets this $1, because it is going to be worth something right.
Forward in the descendants of 2017 and they think to themselves it has been 300 years, that $1 is good to go now, we should do something with it.
They go to buy that same home that their ancestors sold for $1 and find it requires 1 million times this stuff to buy that home!
They go to buy a car, a vehicle and the price tag is too high.
They then go into a grocery store and can only come out with a can of coke, a nickel and a few cents.
When I understood this principle, I jumped to the one place that is important to get rid of and that was the change, stored nicely in a jar.
I realized that every day that money sits their, I would better off throw a few cents into the garbage heap because that is what happens with money.
As the governments print up money, you got your lot last week or last month or whenever your pay day is. And soon as you get it, the government is printing some more like it ain't going out of fashion.
No one tells you how much extra has been pumped out, but when you look and see that nice home and see its price tag, and then you buy it and think it has gone up in value, the only thing that went up is peoples desire for more and the governments constant printing of money.
Money then always tends to zero and why crypto currencies like bitcoin and litecoin are essential. Not only do they limit money production by reducing it over time, there is no printing or reprinting ever happening and so is deflationary.
You can trade a whopping 1,252 crypto currencies here
very nice post. from love from steemsea.
So is the cycle of inflation. Interest is supposed to make up for inflation but with common banks it really doesn't. Steem seems to be less vulnerable to inflation caused buy dumping unbacked currency. Voting for witnesses allows you to make the network stronger against manipulation by undesirable individuals. Please consider voting for me as a witness. https://steemit.com/~witnesses @camb
So true. Interest is meant to counteract it but if got money in the bank, can we really say that the interest covers the increase of inflation. It is meant to but does it in comparison with everything else going on. I don't think it can.
I don't think crypto's are directly aligned to combat inflation but anyone holding a position in bitcoin I think are more pleasantly surprised than many other areas. What I am seeing is that many would be entrepreneurs would do better by holding crypto than holding cash, but that is something everyone has to discover for themselves whether true or not.
Thanks for stopping by @camb. Good to hear you a witness helping to keep the site up :)
Create a great day,
@kozan
Very Clear Explanation here... It also means that if we at our generation pass one million dollars down to our children, over time, the same thing happens and over again... Its a circle... Also means that even a can of coke can be sold for $1000 at some point...
Exactly @romchuks because money is inflationary as it is termed but often people don't understand the governments have the printer and can print on demand. Obviously governments are careful with this so they don't flood money because then it becomes noticeable as can be seen in places like Brazil previously - don't know about now.
And yes, if the sell by date can last that long, it probably will have a $1000 price tag! Good observation.
Create a great day,
@kozan
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This type of spam is adding unnecessary load to the blockchain. Please explain if you think I'm wrong. Flagged.
I don't mind the bots and think they should have a space to advertise, etc, but that bot I don't think is adding anything valid lol @camb
bots can be helpful maybe. I am not completely against them completely either. Some I don't like :)
Yes, some can be a total waste like that one hehe