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Inflation is Good



๐Ÿ’ธ For the last 13 years, Central Banks have been printing money like crazy people and now they are telling us that we will see a little higher inflation. Should we be worried about it? Well, ๐™ž๐™ฃ๐™›๐™ก๐™–๐™ฉ๐™ž๐™ค๐™ฃ ๐™ž๐™จ ๐™—๐™š๐™ฉ๐™ฉ๐™š๐™ง ๐™ฉ๐™๐™–๐™ฃ ๐™ฃ๐™ค ๐™ž๐™ฃ๐™›๐™ก๐™–๐™ฉ๐™ž๐™ค๐™ฃ ๐™ค๐™ง ๐™ฌ๐™ค๐™ง๐™จ๐™š ๐™™๐™š๐™›๐™ก๐™–๐™ฉ๐™ž๐™ค๐™ฃ. One of the problems of Bitcoin $BTC as a currency is that it is deflationary.


There are 4 ๐™ข๐™–๐™ž๐™ฃ ๐™ฉ๐™ฎ๐™ฅ๐™š๐™จ ๐™ค๐™› ๐™ž๐™ฃ๐™›๐™ก๐™–๐™ฉ๐™ž๐™ค๐™ฃ:

1. Monetary inflation - an increase in the money supply

2. Asset price inflation - increase in prices of investment assets, usually a result of monetary inflation

3. CPI inflation - increases in prices of goods and services

4. Core inflation - CPI inflation, ignoring changes in energy $OIL and other food futures prices.


๐Ÿฅ‡ Historically, ๐™œ๐™ค๐™ก๐™™ $GOLD ๐™๐™–๐™จ ๐™—๐™š๐™š๐™ฃ ๐™–๐™›๐™›๐™š๐™˜๐™ฉ๐™š๐™™ ๐™—๐™ฎ ๐™ข๐™ค๐™ฃ๐™š๐™ฉ๐™–๐™ง๐™ฎ ๐™ž๐™ฃ๐™›๐™ก๐™–๐™ฉ๐™ž๐™ค๐™ฃ (when it was used as a currency) since the more gold is mined, the more will be its supply. Of course, monetary inflation is bigger for fiat.


As for Bitcoin, if we look at it as an investment asset, it is gaining from asset price inflation, but if we look at it as a currency, it is deflationary and one of the main reasons why ๐˜ฝ๐™ž๐™ฉ๐™˜๐™ค๐™ž๐™ฃ ๐™˜๐™–๐™ฃ๐™ฃ๐™ค๐™ฉ ๐™ง๐™š๐™ฅ๐™ก๐™–๐™˜๐™š ๐™›๐™ž๐™–๐™ฉ ๐™–๐™จ ๐™– ๐™˜๐™ช๐™ง๐™ง๐™š๐™ฃ๐™˜๐™ฎ.


๐Ÿฅบ If a currency is deflationary, people will save more rather than invest it or spend it. Everybody is investing in Bitcoin or gold because they want the price to go higher, not because they want to use it as a currency. ๐˜ฟ๐™š๐™›๐™ก๐™–๐™ฉ๐™ž๐™ค๐™ฃ ๐™ก๐™š๐™–๐™™๐™จ ๐™ฉ๐™ค ๐™๐™ž๐™œ๐™๐™š๐™ง ๐™ช๐™ฃ๐™š๐™ข๐™ฅ๐™ก๐™ค๐™ฎ๐™ข๐™š๐™ฃ๐™ฉ ๐™–๐™ฃ๐™™ ๐™ก๐™ค๐™ฌ๐™š๐™ง ๐™š๐™˜๐™ค๐™ฃ๐™ค๐™ข๐™ž๐™˜ ๐™œ๐™ง๐™ค๐™ฌ๐™ฉ๐™.


Normally, as the population and economy grows, the money supply should increase, therefore, ๐™– ๐™ก๐™ž๐™ฉ๐™ฉ๐™ก๐™š ๐™ž๐™ฃ๐™›๐™ก๐™–๐™ฉ๐™ž๐™ค๐™ฃ ๐™ž๐™จ ๐™œ๐™ค๐™ค๐™™. Of course, High inflation or hyperinflation is bad.


๐Ÿš€ As an investor, you should not be scared of inflation as you can always beat inflation by investing. If you're investing in a good business at the right price, it doesn't matter if the currency is seashells, Dollars, gold or Bitcoin, the business will grow if it is a good one and you will get the returns from the investments. Always focus on business fundamentals.


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https://www.youtube.com/watch?v=bUtNoHMoLiw&list=UUPO3uUyoXSaFWG-Ldq1mqEQ&index=1



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