My grandfather used to give me pocket money when I was a child. He told me to save it so that it grows. Not true anymore.
If money supply was limited it would be true. When you use AAVE and you want to borrow money there has to be someone who puts there that money. He does it to make some profit. It's logical, feels natural.
Lets say my grandfather was giving me like 5 bucks a week. For 10 years. Thats 2500 bucks. Now 15 years passed. There is like 15% more people on earth. Just because of that it means that 2500 bucks is worth much more. But the economy was growing all the time. Which means demand for money increased! But it wasn't printed. So my money again became more valuable.
It means that if I would just kept that 2500 bucks for those years I would be rewarder for that. Actually those small amounts would be now enough to pay for a chunk of a small apartment. Instead they created money from thin air and robbed the value of that money.
The difference in value is actually huge. It's not "just" inflation. It's also money supply. Of course it's connected. Inflation is like sex with your wife- you see her coming. Increased money supply is also like sex with your wife. But you are not there when it happens and you get to know about it much later.
Definition of inflate:
1: to swell or distend with air or gas
2: to puff up : inflate one's ego
3: to expand or increase abnormally or imprudently
I wonder why do they still bother? Why they just don't print money and take it? Well they probably did in the beginning but what can they do with that? If they can print unlimited amounts then it's better to also inflate all the valuable stuff that they already have. And still get an interest on the loans.
Does it grind your gears?
Are we at the point where a big crash every 15 years is just what should be expected?Is it made like that so that they can say "capitalism failed" and introduce a solution to all the problems for a small price of freedom?
So what you think is going to happen? When? And what a young man can do about it to not get shaved off like a sheep? I would be happy to see a discussion.
Photo Credits: