LETTER #21: INFLATION, RECESSION, AND BITCOIN.
Inflation is not transitory. Recession is a possibility. Bitcoin protects from both.
The inflation is here and it’s not transitory as we were told a few months ago.
Even the manipulated CPI figures have managed to hit a 40-year high. We know this is NOT a real number. CPI is a basket of goods/services that are chosen by the government and they always manipulate it to keep the CPI figures as low as possible as they did in the 80s.
The inflation is way higher when we calculate it with the 80s way.
Someone who is paying a little bit of attention knows that the prices of things we need regularly have increased by way more than 7.9%.
See, I told you. It’s way higher than we are being told.
Let’s talk about the recession:
The Fed is staring at the crossroads. Both these roads lead to people’s distrust in the central banking and legacy financial system. They can’t make a U-turn.
In the 1970s, when inflation was running hot like it is today, the Fed could easily hike interest rates (which they did) because back then, the national debt was minuscule as compared to what we have today.
The levels of debt that the government has accumulated over the past decades make it impossible to raise rates without going into a recession. If they don’t raise rates, inflation will keep stealing the wealth of citizens.
Who suffers in both scenarios?
The average citizen.
Why?
Because a few decades ago, we allowed our governments to print as much money as they wish and centrally manage its supply. The ramifications are clear to everyone today.
The average citizen is suffering because the value of the currency they hold is plummeting. We can’t stop the Fed from printing another trillion dollars out of thin air but we can voluntarily exit the system.
We have the option to leave the system that continually steals our wealth through inflation and regressive taxation, and join the system that preserves our wealth over any period of time.
In other words, exit the dollar standard, and join the Bitcoin standard.
FINAL THOUGHT :)
Be a long-term thinker. Life rewards you for this.