What inflation? It's coming...

in LeoFinance6 days ago

There's already inflation occuring, even if the CPI numbers don't support it just yet

If you go by the government released numbers, we've battled deflationary issues a lot more than inflationary ones...

While that may be true, keep in mind that is also only if you go by the government issued numbers.

CPI inflation is a curious thing as it doesn't include some of the things that matter most to American consumers.

Not only that but the recent revisions to how CPI (consumer price index) is calculated makes it more like a COLI (cost of living index) than a consumer price index.

https://www.investopedia.com/articles/07/consumerpriceindex.asp#:~:text=The%20Bureau%20of%20Labor%20Statistics,gross%20domestic%20product%20(GDP).

Getting beyond that though, there is a very good chance inflation is coming in the not too distant future, even if you go the goverment's numbers.

Why do I think that?

Well, it's pretty simple really, it's already here.

Take a look at asset prices over the past year:

  • Corn up 35%
  • Wheat up 18%
  • Soybeans up 50%
  • Cotton up 13%

image.png

(Source:

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In the last 3 months alone we have...

  • Lumber up 53%
  • Steel up 57%
  • Sugar up 13%
  • Copper up 19%

More Stimulus only going to accelerate this trend...

As you can see we have seen tremendous increase in the price of commodities. Even if they are coming off of relatively low levels, we can't have increases like this without it eventually being passed on to the final product/good/service.

With more stimulus on the way, I expect this trend to only continue over the next 12-24 months.

What can you do?

If you are reading this, it's likely pretty simple for you, buy bitcoin.

Stay informed my friends.

-Doc

Posted Using LeoFinance Beta

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You fight deflation in a moment and that leads to inflation later, so, good advice, save on assets

You are very correct, Buy Bitcoin.

Or you can get your hands on some hive/Leo and not put all your investments in one basket

Posted Using LeoFinance Beta

Well bitcoin has a fixed supply, hive and LEO in theory have infinite supply.

I'm pretty sure HIVE also has a cap, just a much higher one due to the nature of our chain. I may be wrong, but I thought gradual reduction of generated supply was part of the plan. I should look it up in the morning if the power is back and I can use a real computer and proper internet instead of the suddenly overcrowded cell network.

Hive has no supply cap. The total inflation will theoretically peter out to 0.5% about 15 years from now (IIRC). But because up to 50% of author rewards are in HBD and because the DAO pays for proposals in HBD, there is much potential for excess inflation.

Inflation is not a bad thing on Hive. HIVE is not a store of value coin. It's currency the purpose of which is to fuel activity, although with enough activity it can appreciate quite a lot. But never confuse its value proposition with that of Bitcoin.

Posted Using LeoFinance Beta

Agreed to some degree. HIVE needs to see constant and sustained demand in order for its price not to continue to trend down over time.

It drops to less than 1% and then stays there forever. Not an ideal setup for increasing the price per coin unless there is continued and sustained demand.