Inflation is a destructive force that can be difficult to understand. We might not notice it at first, but it slowly increases over time, causing our money to lose value. This hidden tax can make it harder for us to save for retirement or emergency funds. Inflation also causes debt to compound more quickly, making it harder to get out of debt later on in life—or ever! Luckily there are ways we can fight back against inflation and even benefit from its inevitable effects by using Bitcoin as an investment vehicle.
So, what is inflation?
Inflation is an increase in the money supply. In other words, it’s when there are more dollars or coins than before. It can be caused by printing more money or by increasing the amount of debt. When you have more dollars to spend, each dollar is worth less.
The opposite of inflation is deflation—the value of a currency goes up because there are fewer dollars available for trade and ownership. Deflation makes goods cheaper and encourages people to save instead of spending money on goods or services (like food).
That has been seen recently with Bitcoin, as its price has increased dramatically. People tend not to buy things now because they think they’ll be able to afford more later on when prices go down again! It’s also known as “hoarding” since many people have started saving their bitcoins rather than spending them immediately as they would with any other currency–which could eventually lead to an economic crisis if everyone does this at once!
It might seem difficult at first glance, but inflation isn’t hard to understand.
Why do governments want inflation to be a little bit positive?
You may be wondering why governments would ever want inflation to be positive. The answer is simple: debt. Governments issue bonds, or IOUs, to raise money for public works like infrastructure and education. The problem is that governments have spent more than they’ve earned over the years and racked up lots of debt.
If inflation were negative—if prices kept rising faster than your income—you’d get paid back with less money each year. That makes it harder for the government to pay back its debts because those payments are measured in dollars, but they’re worth less due to inflation (and thus require more dollars each year).
Suppose you save money by putting it under your mattress instead of investing it elsewhere (like in stocks). In that case, you’re losing out on potential returns because you haven’t invested in anything else that might grow over time like investments do when they provide dividends or interest payments from rent, etc.
Therefore, if you keep all your savings under one mattress, there won’t be enough left over after taxes. Even though we all want more money someday soon enough…
What happens if inflation gets too high?
Inflation is the root cause of all debt. When a government prints money to cover its obligations, it creates inflation in its economy. For example, let’s say your friend owes you $10, and he pays you back with a pack of gum. He has just created 10 cents worth of additional “money” from thin air.
Such a transaction can be seen as both good and bad. It’s good because now you have the extra money that he gave you (and vice versa). However, it’s bad because prices will increase as more people enter the market looking to use this newly-created money. If they’re trying to buy something on sale, they may not be able to do so anymore!
Inflation also goes hand in hand with rising unemployment rates. When there aren’t enough jobs available for everyone who wants one, then prices skyrocket because everyone needs something else besides food/water/shelter–which leads us into another topic entirely…
Why is it important to fight against inflation now?
When you hear “inflation,” what do you think of it? Is a car more expensive? A hamburger costing $2.50 instead of $2?
But inflation isn’t just about the price of goods going up; it’s also about the value of your money going down. Inflation is a hidden tax that silently robs people of their hard-earned savings. It’s the root cause of all debt, the boom/bust cycle (what we’re seeing now), and the wealth gap between rich and poor (who can afford to buy more things). In short: Inflation is why people don’t save money!
Bitcoin offers an alternative way to store value that won’t keep getting worse by default every year as fiat currencies do. And this is important because everyone should be saving for retirement or other goals as soon as possible, and bitcoin can help!
How can Bitcoin help?
What can Bitcoin do for us? Well, it’s a store of value. That means if you buy something with bitcoin today, and tomorrow the value of bitcoin has increased by 10%, your purchase is still worth what you paid (assuming there are no additional fees involved).
Plus, because of its decentralized nature and lack of central control, Bitcoin is not subject to inflation or political manipulation. It’s also safe from market manipulation—no one can raise or lower the price without others knowing about it—and currency devaluation (you see how some countries tend to “print” more money when they get into financial trouble?).
What strategies can we use to increase our wealth?
Dollar-cost averaging, or investing a set amount of money at regular intervals. For example, you could invest $100 in the stock market on the first day of every month, regardless of how that month’s performance has been. The idea is to buy when times are bad, and prices are low, to take advantage of lower costs when it comes time to sell and make a profit later.
Investing in gold or silver bullion coins can be another good way to hedge against inflation because these metals tend not only to hold their value over time but also appreciate as inflation increases (this is why they’re referred to as “inflation hedges”).
In addition, by buying physical bullion rather than futures contracts or other derivatives, you’ll avoid paying settlement charges on top of what you paid for them initially. Plus, there’s no risk associated with being exposed too long.
Once you own it, there’s nothing left for someone else, like an investment bank holding one side up until maturity expires (which can happen if markets change suddenly before full maturity comes into effect).
Bitcoin may see its value increase with age, unlike inflationary fiat currencies like the US Dollar and Euro. So when you hold bitcoin for more extended periods and don’t sell them all at once, you are effectively dollar-cost averaging into Bitcoin because you’re getting more for less each time you buy into or increase your holdings.
Conclusion
There is nothing more liberating than having your money work for you. Inflation has been a hidden tax on the people for decades, and we need to fight back. With Bitcoin, there are ways that we can increase our wealth by investing in something that is not affected by this volatile system.
None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.
