Disclaimer
This isn't financial advice, this isn't even really on bitcoin. I wrote this for Twitter, and I figured it might be a solid read for those here interested in hyperinflation, and perhaps the narrative surrounding Bitcoin as the hedge against it. Personally, I view a cure for cancer as the ultimate hedge against hyperinflation (
CVM
), but I also hold and support
GME
, and very small amounts of
BTCUSD
and
ETHUSD
.
Thesis on Taming Hyperinflation
Hyperinflation is the dramatic increase of dollars in the active money market, such that the price of goods and services increase in relation. Hyperinflation is caused by a dramatic increase of dollars into the active money market. Hyperinflation didn't start in 2020 when the money printers went to 11, it started post World War 2 when the United States of America began its quest to become the de facto currency for global trade. The only way to force the world to use Dollars, is if it is forced into their hands (in one way or another). USA has maintained a dollar printing ethos for 70+ years, and now it is all coming home. Every country's treasury was forced to hold massive amounts of US Dollars in order to give it's own currency value, and to actually perform global trade. Now countries don't need all those Dollars, because USA has lost it's role as the de facto center of global trading. This isn't just Trump's moronic economic policies that isolated itself and pushed away every other country. This isn't just the constant rotating coups on third world countries ranging from Latin America to the Middle East, and even into Asia. This isn't just the constant refusal by the Federal Reserve and Treasury Department to embrace evolution of finance mechanics and create a real answer to Bitcoin. This isn't just the fact that USA has allowed the breeding of destructive and evil financial institutions that have caused untold economic devastation across the world. This is just what was always going to happen. Barring USA completely uniting the globe under one banner and one currency, there was always going to come a time when globalization had come full circle and other countries would learn how to live without America's iron grip. Hyperinflation was always going to come.
With that said, hyperinflation isn't something new and it isn't something bad. With every country the US step foot in, they caused massive amounts of hyperinflation as they brought an extreme amount of dollars into a small area (usually the country capital or workforce center, think Nike shoe factories), with a slow rate of diffusion. This caused a sharp increase in the price of goods and services as there was more wealth in the active money/fluid market, which in turn hurt those who were not in this newly-wealthed population. While countries like China still struggle with this issue, this author wishes to point inwards toward the USA. This author comes from the dirty south, the kinds of places where Target moving in is a really big deal. USA has been undergoing hyperinflation since it's inception. The very concept of a spread out economic system that is improperly balanced towards centers of wealth means that there will always be those with, and those very much so without. Thus, the goods and services are far too expensive for their own wealth, but not for the greater fluid money pool. This author can go into the many reasons why this started, and why it continues and will continue until Universal Basic Income becomes more prominent as the main income source for the population, but that isn't the point of this text. The point is this, hyperinflation is coming, but it has also been here.
Hyperinflation drives dramatic development, dude. A new Iphone $729.00 US Dollars. If that doesn't cause a double-take, then the reader has fallen on the right side of hyperinflation. This concept is that simple. If a source argues otherwise, than they too have fallen on the right side of hyperinflation. Minimum wage in America is $7.25 per hour, and hasn't increased since 2009 (from $6.55). With a cumulative inflation rate of 26.64% since than (with that not accounting for the dramatic inflation periods already happening this year), minimum wage equates to $5.72 USD now, or $11,897.6 per year working 40 hours a week, with no vacation days for the entire year. Hyperinflation has allowed the extreme generation of wealth at the top with an increase in goods and services that suffocate the poor and unlucky. This in turn drives development of luxury goods, such that handheld supercomputers capable of accessing an information network existing all around us in the form of energy, can only cost $729.00 USD. Or does it? Rather or does it have to? This author isn't going to make that argument here either, but let the reader reason it out for one's own self.
Hyperinflation comes from a number of sources, depending on the route of the money. In this case, US dollars are coming from the Federal Reserve into the major banks using it in equities via themselves or their hedge funds; USD is coming from other countries reserves in the form of transferring into other global currencies, and Bitcoin. In turn, these other global currencies gain value, including Bitcoin, thus reducing the relative value of the US dollar and the goods and services it can buy. The truth is that the checks the government sent throughout COVID did rush along hyperinflation, possibly accelerating the collapse of the global banks and the US equities market. However, this only rushed it along in a positive manner. Money makes more money. An income of $100k USD is going to become much more than just double that of an income of $50k USD. Basic costs of life, unavoidable, take a larger percent of the lower income, thus leaving less to invest. However, not everyone spends income equally. This author's hypothesis is that because so much of the population is used to living on the very basic level of comfort and income, this group was able to use their checks to their fullest advantage. Sure, $100k USD could allow more investments, but if the individual wants to buy cars more than stocks, $100k USD only goes so far. This population drove a stake right through the heart of the vampire sucking wealth out of the global economy through the equities market, and now there is going to be an even larger wave of wealth driving hyperinflation. This author believes that this will be the greatest wave of hyperinflation (yes, a MOASS, but I feel dirty saying it), and thus should be the wave ridden by all. But truthfully, this author believes that the equities market is the safest place to ride out inflation, period. (This author also believes that cryptocurrencies belong in the same group, but there are more barriers to investing in cryptocurrency - such as fake altcoins).
Equities were meant to be driven by investment, and a return on that investment. Companies could go directly to investors with a business plan, and sell a portion of themselves to fund their growth (i.e. take on debt). In turn, investors holding a share of that company would get a turn of the profits. These are dividends. If the cost of goods and services increases, the profits increase, the dividends increase. The relative value of the company increases as their profits increase. Equities are a hedge against inflation, but only if the equities market itself is healthy, free from malicious actors. This author has gone at length about these entities, and in some ways how this could be fixed, but that is not the point. The meme phrase "stonks only go up", isn't some sort of joke. It is the very purpose of the equities market to only increase as the relative wealth of the system increases. This is the very fundamental that has caused an increase in the stock market from day 1. In turn, every dip and rise in the rate of growth of the stock market matches the relative fluid money market of the system. Concisely speaking, as soon as the value of wealth was removed from any standard other than good will and faith, there was no longer a hindrance to the growth of this fluid money market. Furthermore, there were never any rules made to control it. At this point, there is no longer a force in existence that could control this process, other than the complete agreement of the participants of the system to accept it. Perhaps that is why Federal Reserve Chairman Powell says he is willing to keep supporting the US economy as long as it needs, knowing full well that the money may never stop flowing, or the system will collapse upon itself searching from a skeleton that never was. Truthfully, it is the very military might of the United States of America that keeps the global economy afloat, until a healthier alternative is agreed upon, as a global economy.
Hyperinflation is coming, it has always been here, and the safest place to ride it is on the equities market in equities that are absolutely essential. Essential doesn't just mean life or death, but it can be in the shape of essential goods and services, or platforms for those. This author wishes the reader the best of luck, and the greatest hope is that we build a greater tomorrow.
This isn't financial advice, this isn't even really on bitcoin. I wrote this for Twitter, and I figured it might be a solid read for those here interested in hyperinflation, and perhaps the narrative surrounding Bitcoin as the hedge against it. Personally, I view a cure for cancer as the ultimate hedge against hyperinflation (
CVM
), but I also hold and support
GME
, and very small amounts of
BTCUSD
and
ETHUSD
. Thesis on Taming Hyperinflation
Hyperinflation is the dramatic increase of dollars in the active money market, such that the price of goods and services increase in relation. Hyperinflation is caused by a dramatic increase of dollars into the active money market. Hyperinflation didn't start in 2020 when the money printers went to 11, it started post World War 2 when the United States of America began its quest to become the de facto currency for global trade. The only way to force the world to use Dollars, is if it is forced into their hands (in one way or another). USA has maintained a dollar printing ethos for 70+ years, and now it is all coming home. Every country's treasury was forced to hold massive amounts of US Dollars in order to give it's own currency value, and to actually perform global trade. Now countries don't need all those Dollars, because USA has lost it's role as the de facto center of global trading. This isn't just Trump's moronic economic policies that isolated itself and pushed away every other country. This isn't just the constant rotating coups on third world countries ranging from Latin America to the Middle East, and even into Asia. This isn't just the constant refusal by the Federal Reserve and Treasury Department to embrace evolution of finance mechanics and create a real answer to Bitcoin. This isn't just the fact that USA has allowed the breeding of destructive and evil financial institutions that have caused untold economic devastation across the world. This is just what was always going to happen. Barring USA completely uniting the globe under one banner and one currency, there was always going to come a time when globalization had come full circle and other countries would learn how to live without America's iron grip. Hyperinflation was always going to come.
With that said, hyperinflation isn't something new and it isn't something bad. With every country the US step foot in, they caused massive amounts of hyperinflation as they brought an extreme amount of dollars into a small area (usually the country capital or workforce center, think Nike shoe factories), with a slow rate of diffusion. This caused a sharp increase in the price of goods and services as there was more wealth in the active money/fluid market, which in turn hurt those who were not in this newly-wealthed population. While countries like China still struggle with this issue, this author wishes to point inwards toward the USA. This author comes from the dirty south, the kinds of places where Target moving in is a really big deal. USA has been undergoing hyperinflation since it's inception. The very concept of a spread out economic system that is improperly balanced towards centers of wealth means that there will always be those with, and those very much so without. Thus, the goods and services are far too expensive for their own wealth, but not for the greater fluid money pool. This author can go into the many reasons why this started, and why it continues and will continue until Universal Basic Income becomes more prominent as the main income source for the population, but that isn't the point of this text. The point is this, hyperinflation is coming, but it has also been here.
Hyperinflation drives dramatic development, dude. A new Iphone $729.00 US Dollars. If that doesn't cause a double-take, then the reader has fallen on the right side of hyperinflation. This concept is that simple. If a source argues otherwise, than they too have fallen on the right side of hyperinflation. Minimum wage in America is $7.25 per hour, and hasn't increased since 2009 (from $6.55). With a cumulative inflation rate of 26.64% since than (with that not accounting for the dramatic inflation periods already happening this year), minimum wage equates to $5.72 USD now, or $11,897.6 per year working 40 hours a week, with no vacation days for the entire year. Hyperinflation has allowed the extreme generation of wealth at the top with an increase in goods and services that suffocate the poor and unlucky. This in turn drives development of luxury goods, such that handheld supercomputers capable of accessing an information network existing all around us in the form of energy, can only cost $729.00 USD. Or does it? Rather or does it have to? This author isn't going to make that argument here either, but let the reader reason it out for one's own self.
Hyperinflation comes from a number of sources, depending on the route of the money. In this case, US dollars are coming from the Federal Reserve into the major banks using it in equities via themselves or their hedge funds; USD is coming from other countries reserves in the form of transferring into other global currencies, and Bitcoin. In turn, these other global currencies gain value, including Bitcoin, thus reducing the relative value of the US dollar and the goods and services it can buy. The truth is that the checks the government sent throughout COVID did rush along hyperinflation, possibly accelerating the collapse of the global banks and the US equities market. However, this only rushed it along in a positive manner. Money makes more money. An income of $100k USD is going to become much more than just double that of an income of $50k USD. Basic costs of life, unavoidable, take a larger percent of the lower income, thus leaving less to invest. However, not everyone spends income equally. This author's hypothesis is that because so much of the population is used to living on the very basic level of comfort and income, this group was able to use their checks to their fullest advantage. Sure, $100k USD could allow more investments, but if the individual wants to buy cars more than stocks, $100k USD only goes so far. This population drove a stake right through the heart of the vampire sucking wealth out of the global economy through the equities market, and now there is going to be an even larger wave of wealth driving hyperinflation. This author believes that this will be the greatest wave of hyperinflation (yes, a MOASS, but I feel dirty saying it), and thus should be the wave ridden by all. But truthfully, this author believes that the equities market is the safest place to ride out inflation, period. (This author also believes that cryptocurrencies belong in the same group, but there are more barriers to investing in cryptocurrency - such as fake altcoins).
Equities were meant to be driven by investment, and a return on that investment. Companies could go directly to investors with a business plan, and sell a portion of themselves to fund their growth (i.e. take on debt). In turn, investors holding a share of that company would get a turn of the profits. These are dividends. If the cost of goods and services increases, the profits increase, the dividends increase. The relative value of the company increases as their profits increase. Equities are a hedge against inflation, but only if the equities market itself is healthy, free from malicious actors. This author has gone at length about these entities, and in some ways how this could be fixed, but that is not the point. The meme phrase "stonks only go up", isn't some sort of joke. It is the very purpose of the equities market to only increase as the relative wealth of the system increases. This is the very fundamental that has caused an increase in the stock market from day 1. In turn, every dip and rise in the rate of growth of the stock market matches the relative fluid money market of the system. Concisely speaking, as soon as the value of wealth was removed from any standard other than good will and faith, there was no longer a hindrance to the growth of this fluid money market. Furthermore, there were never any rules made to control it. At this point, there is no longer a force in existence that could control this process, other than the complete agreement of the participants of the system to accept it. Perhaps that is why Federal Reserve Chairman Powell says he is willing to keep supporting the US economy as long as it needs, knowing full well that the money may never stop flowing, or the system will collapse upon itself searching from a skeleton that never was. Truthfully, it is the very military might of the United States of America that keeps the global economy afloat, until a healthier alternative is agreed upon, as a global economy.
Hyperinflation is coming, it has always been here, and the safest place to ride it is on the equities market in equities that are absolutely essential. Essential doesn't just mean life or death, but it can be in the shape of essential goods and services, or platforms for those. This author wishes the reader the best of luck, and the greatest hope is that we build a greater tomorrow.
