If you are reading this, take it as an important signal to take action, it just baffles me what the world economy is looking like this days.
We went from a global pandemic in 2020 that caused economic turmoil worldwide, impacting businesses like restaurants, hotels, airlines, gyms and other in person businesses the most.
The fear of all of this quickly spread to stocks, which plummeted 50%-90% depending on the industries, in about 3 weeks.
A record time and considering it wasn´t just the economic turmoil but people also really worried about their health and loved ones, fear was HIGH.
What was the solution?
They can try to sugar coat it, disguise it, or use every single complex term they can as “Emergency economic measure support”, or whatever crap they can come up with.
But that´s just it simplified, they printed money, injected it into companies, banks, insurance, through various measures, one included buying bonds, the other …. Lowering the interest rates to basically 0%
This basically meant, FREE money, the only caveat to it, is that of course, it stayed within the people who had money.
Those who had access to money, through company loans, personal loans, there is no better place on earth to design, modify and bend laws to make more money on top of the previous money made than the US, that´s why it´s called the land of opportunity….hmm
Why should you care about this ?
If not, that is just fine, probably you have even better things to do (reading financial news can get boring after a while, who knew, right?)
The point i want to make here, is how that was just a tipping point, the amount of money printed in the year 2020 was just explosive, some data suggests, 47% + of the whole US dollars in EXISTENCE, were printed in year alone…
I mean just look at that chart, now lets get to the point, this creates inflation
Inflation affects everyone, doesn´t matter if you understand finance or not, if you are a doctor, lawyer, artist.
It means, by expanding the amount of money in existence, they are decreasing the value of the money you already have aka. savings, current income
That just leaves you with a big problem, probably you can say but my $1,000 are still a $1,000 what are you talking about?
Yes BUT that $1,000 previously got you an awesome vacation to an exotic place or you could buy a car with it, now its about one month of rent, you see the point?
FAST FORWARD-FOOL ME ONCE…
Now again, remember this all started in 2020, what happened, to the inflation, did prices really went up?
This is just a rethorical question, if you are a human, that pays bills, you don´t even have to look at the data, you know the answer, every country has their measuring and reporting of the inflation metric, monthly or annually , but there is a very interesting thing done by governments, to cover this up.
They will report the inflation based on a basket of items that they select, they basically can leave out whatever they think is convenient, so interesting huh?
This are price changes in the UK for 2022, after the huge expansion in money supply, and yes i said UK, weren´t we talking about the US?
Oops, this is where it gets a lot more complicated, the measures of increasing the money supply and lowering the interest rates to basically 0%, were not just implemented in the US
The whole Eurozone i would say is in a very dire situation, recently one of the most important hedge fund managers in the world was asked about all of this mess, and he said, yes it´s not looking good, but if the US is in bad shape, wait till you see the rest of the world…
That means it doesn´t matter where you live. You are getting the dire consequences of inflation… some countries with millions of people are just getting destroyed by it, with prices in the stores changing every couple of days, even HOURS, in some extreme cases… Argentina, Lebanon, Turkey, just to name a few
This are extreme examples but nevertheless showcase how a lifetime of work and savings can be wiped out in a second. Thanks to wrong decisions made by politicians and economic entities
At the very end we have to go all the way back to the core and study history, understand how was money created.
How did some like The Roman Empire fell into the same trap? and eventually collapsed.
What happened when hyperinflation ravaged Zimbabwe (1998-2009) or the Weimar Republic (1921-1929) ?
Eventually the result of our labor is money no matter what our profession is.
Mr Michael Saylor could not have been more right:
We are forced to work harder for a currency that is getting weaker-
-Michael Saylor-
In the next posts, i will discuss the in depth solution to this dilemma, stay tuned, stay safe…
Thanks very nice blog!