What is Wrong with Our Money

Inflation: is an increase of currency supply. In inflation, the price of products increases

Deflation: is a contraction of a currency supply. In deflation, the price of products decreases.

This is the common knowledge known to people about inflation, but we are going to dig deeper into
it. The governments tend to print currency as the population goes into saving mode rather than
spending. Let us take 2008 as an example, everyone was happily purchasing unnecessary products
with credit cards, real estate prices went through the roof. Post-2008, many went out of job and those
who kept their jobs were afraid of losing it which led them spend less and save more. People in general
have the mentality that the current situation we are in will remain the same, but the only constant
thing in the markets is change. When the governments observe that there are less purchases for
businesses, it's an indicator that businesses will go bankrupt, their employees will become
unemployed, so the governments start printing dollars to encourage spending. Now, the population
is more willing to spend as they feel confident in a brighter future.

The spending in the current days are related to how secure people feel. If the population is not feeling
confident and the government prints its currency, then there will be in circulation of currency (the
number of times the same currency note is involved in a different transaction), which will lead the
government to print more and more till one day the population feels confident after saving so much
and they start spending again. This will lead to a hyperinflation as we can see in the following example,
the same house that was sold for 50k as it was approached by 2 buyers is now being sold for 100k due
to the increase of demand. The house is not worth any more but the currency itself is worth less, this
is inflation. History showed us this over and over, Germany had an inflation rate of 322% in 1923. Why
can’t we learn? Is this time really different if we are driven by the same feelings

In real life, governments never stop printing currencies. Therefore, the prices keep going up which
does not mean that the products themselves are changing, but the money circulating in the economy
keeps on increasing in ratio of consumption of those products. For example, an apartment remains an
apartment but the price of it in 1980 is significantly less than it is in 2020. So, it is the currency
becoming less valuable rather than the apartment being more valuable. It took the united states 200
years to go from no dollars in existence to 825 billion and then we had 2008 crisis. From 2008 to 2016
we had 6000 billion dollars in existence. It is not only the US that is doing it, but all the governments,
one more than the other.

2008 crisis was one of the biggest scams, the government printed money out of thin air which they
called “quantitative easing” to bail out the banks from going bankrupt and the banks paid themselves
significant bonuses in return for crashing the world economy. So does everything crash in an economic
crisis? No, gold and silver were rising to hit their all-time high when the stocks were going down.

The same events with different people have been going throughout history, except we always think
this time it is different.

To conclude, our generation will go through a new monitory system and in those events, and wealth
will be redistributed to the ones who mastered those wealth cycles.