Not yet, a $ 100 bill could cover dinner, a movie and a drink. Now, this may not be enough for foods that are united – and for some decades, it is likely to stretch even less. That is not a fluke of bad luck but a feature of modern financial systems: inflation is built on.
In a new Cointelegraph video, we evaluate why the money is constantly losing value over time, and why governments really want.
The story begins in 1944 with the Bretton Woods agreement, when the US dollar was tied to gold at $ 35 an ounce. That link ended in 1971 with the “Nixon Shock,” which rotated the dollar – and every major currency in the world – in pure Fiat, which only supported the government’s trust.
Since then, the purchase of power has been in a steady decline: a dollar in 1971 bought what takes more than seven dollars today. Of course, money printing is not the only driver. Energy shocks, disruptions to the supply chain and increasing wages also push prices higher.
And while central banks insist on inflation around 2% is “healthy,” the long -term effect is the lowering of Fiat Currency. So what does this mean for savers? And is there an alternative to the Fiat system?
Some have argued with gold or bitcoin (Btc) offer protection because they are scarce in a paper money way. Others warn that without a flexible supply of money, economies will fall under debt.
The whole Cointelegraph video dives deeper into this history, the dangers of runaway inflation, and techniques used by people to protect their wealth. Check full video On our YouTube channel.
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