Eroding our Purchasing Power

in #life6 years ago (edited)

Eroding Purchasing Power

Sometimes it's hard for people to understand the concept of inflation. I think this is partially the reason why when Economists talk about the financial situation of a country, most people tune out thinking it's not that relevant to their life, but of course this is not the case.



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I've also found quite common for people who live in USA to think that they are not affected as much by inflation. Maybe within the communities of crypto this is not the case(most are in crypto because they understand this), but to those who participate of the more common elements of economy, these facts, are completely missed. It's almost as if most operate with a short term memory and can't possibly remember a can of soda costing 0.75 cents just a decade ago.

Having the somewhat unusual life of a working musician, I travel a lot back and forth between USA and Brazil, and this gives me a different look into how the two economies interact. As you might guess, inflation in Brazil is considerably higher, but attempting to think in dollars while working with Reais (the Brazilian currency) is very ineffective to measure purchasing power and vice versa.

Worker salaries are adjusted much faster in Brazil due to the higher inflation (or should, at least) with the idea of keeping the purchasing power of the people within a healthy range while promoting spenditure. However, If hyperinflation takes place eroding the purchasing power too fast, the economic death spiral becomes extremely obvious.


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This delicate system is constantly being corrupted. Banks acting as governments get to do as they please, making up for their mistakes by simply printing more money. How do get away with it? Where does the "money" come from, the overprinting that is? From the people, from their purchasing power.

This is precisely why I believe now more than ever, that despite all the challenges we are facing today on the cryptocurrency ecosystem, we are interacting inside the right system. The only one I'm aware of that has the potential of removing the ability for manipulation and theft (that is exactly what it is) from the people who participate of the economy.

I decided to write about this today, because I think this bit of knowledge is very important, and those who are feeling negative about cryptocurrencies should do an extra effort to remember this. Don't misunderstand me, I would love to see cryptocurrencies rally again right now, but this thing we are doing is not about today, it's not about double digit gains in a week. It's about taking back control, and having a system of true accountability.

Let's not forget the big picture…

@chbartist

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I live in Brazil and I know what inflation means and the harm it makes to the entire economy of a country.

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You can thank the brilliant government clowns, and the Quantitative Easing Programs (1, 2, and 3) that they insured us was not going to cause inflation. I feel like everything has become sooo expensive and people just act like it is normal.

Thanks for bringing this up!

Nice ..
I liked this way .. great advice from you
Thanks for sharing..

I believe also that we are interacting within the right system, will it be this system that gets us through ? maybe or maybe not , could it be a evolution of this system. who knows , but the system definitely needs changing, Great post , thanks for sharing

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@chbartist I think so indian government ban crypto after 5th july...... 😂😂😂😂😂😂

what is thinking on crypto currency relly comming soon and wait hold if any
solution?

Don't sell. Wait! All the best! @indiacrypto.

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who will be satisfied with a generous reward @chbartist

Why do we believe our governments? Why do we are bound to use existing banking systems? Why we always go for traditional investments and following existing educational systems?

Do you know why?

Because we are brain washed... We here in this world always follow what our ancestors told us to do.. I am not telling that they were wrong.. I respect them very much and also follow them.. But during those days people were unaware of corruption because of less transparency in the system.
With new innovations and technology we are now able to understand and have a better picture of what is happening around us.
Blockchain is the next big revolutionary tech that enables people to bring transparency into the system. One day it will definitely replace the existing banking and governing system....

No matter what happens in the crypto market if you believe in its future then you will definitely want to be a part of it....

Thank you guys ... Keep posting...

No no, the reason is because if you don't you will get stripped from your freedom. " Do as you are told, or fear for your life and/or freedom ". And yes, crypto is the future, and government will try to withhold their citizens from the freedom of use of crypto. Some already are yes.

yes @bibekchandra i think you are extremely right...because our governments are corrupted ..and i think ina few years they will be replaced by blockchain...thanks for your information @bibekchandra

waao excellent post @bibekchandra..i beleive in blockchain and have a strong belief that blockchain will change current traditional banking system and government decisions....

Many governments no longer focus on creating wealth, instead they only print money. This is what happend in Zimbabwe. With the hyper inflation which was faced there, most peoples savings were wiped out creating a major economic tragedy. With blockchain, the future is secured.

Many if not any government is knowledgeable in economics. They try to solve most of the problems by printing more money. Then they see more problems eroding, they print more. By the time they give up, they have made themselves wealthy and most of them don't care about the people, they see it just as a short term job. So in the end, they don't care about the mess they make, that is the next government officials job.

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