🧵 Important to differentiate the term inflation & CPI measurement tool
Inflation is happening nearly every year through banks creating (inflating) a new currency = devaluing the old one
This currency goes straight to real estate, financial assets & so on, however...
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Inflation is happening nearly every year through banks creating (inflating) a new currency = devaluing the old one
This currency goes straight to real estate, financial assets & so on, however...
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... this newly created currency doesn't go straight into circulation inflating the prices of groceries & so forth
That only happens when govs give free checks to everyone (Covid)
For that, u have the CPI tool which measures the yearly difference of certain baskets of items
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That only happens when govs give free checks to everyone (Covid)
For that, u have the CPI tool which measures the yearly difference of certain baskets of items
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It however doesn't measure important ones or (on purpose) only checks those that are getting a lesser price increase
For example the switch of beef meat for chicken meat in this basket
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For example the switch of beef meat for chicken meat in this basket
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Therefore it is common u see the "official" CPI being at "10%" but in reality, many of the items you buy are at a 20-30% increase
The CPI also measures the yearly difference. But it's the effect, not the cause
If we are looking for the cause, it's currency inflation
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The CPI also measures the yearly difference. But it's the effect, not the cause
If we are looking for the cause, it's currency inflation
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When banks create a new currency (through loans in the majority of times) in most cases, as I said, its effect is higher prices of houses, scarce assets, and so forth as that's where this newly created currency goes
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Central bankers/bankers in general often say that many times when they create a new currency it doesn't have always an effect on inflation.
This is wrong, it does. Just not as much on the CPI basket of items. However, the cost of living/houses and so on goes up
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This is wrong, it does. Just not as much on the CPI basket of items. However, the cost of living/houses and so on goes up
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This then directly leads to the fact less & less people are able to afford a new house/car etc and it creates a wealth gap
It causes the Cantillon effect
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It causes the Cantillon effect
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And as always #Bitcoin fixes this because you cannot print it. You have to FAIRLY EARN it
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