Inflation: The Enemy of the People
Inflation (your money buying less of what you want as prices increase) will destroy personal wealth worldwide as progressive minded politicians seize power and give out more stimulus.
It’s no secret that the progressives are gaining representation in government seats. And they are about giving more to the people regardless of what it might do to the solvency of the country.
Honestly, we are in a situation where you can’t leave the well-being of society up to market forces anymore. We believe on the other side of massive inflation is better days, but not anytime soon.
Because of massive money creating, via stimulus legislation, Hyperinflation (creating a debt bubble by expanding the monetary base) will become unstoppable.
In a super inflationary state governments will print way more money than we need which will destroy the prices of everything, essentially making your money toilet paper. At this level, the Central Bank Digital Currency or CBDC system will come into full force as the new solution to save the world.
The question is why is our currency subject to Hyperinflation? there are 3 primary causes.
- A minimum wage standard
- Money Printing
- Money Velocity
As the central banks print more dollars, the economy will open up which increases consumer spending to spur money velocity.
These two activities will devalue the currency. As they bring back jobs a minimum wage standard will be put in place across the country. A minimum wage is a double-edged sword. On one end it gives people a much-needed pay boost which will hopefully keep up with the cost of living, and on the other end, smaller businesses can’t afford to pay it so they will increase prices in order to keep up with the wage standard.
Another contributor to inflation is the fact that we have a floating exchange rate currency. There are two types of paper currencies, fixed and floating exchange rate. A fixed-rate currency is a currency backed by something that has worth(tangible) like gold or cryptocurrency. A floating rate is backed by the solvency (wealth) of a government.
Every country with a central banking system has a floating rate. Though it’s profitable in the forex markets it’s not too good economically during crises.
This will cause major price swings that will show up in the forex markets.
As you receive your stimulus funds, turn some of that money into capital (money designated for investing) and invest it into other tangible asset classes (crypto, silver, lumber) so you can have a chance to stay afloat.
Buckle up and secure your wealth!