Not long ago, a $ 100 ticket could cover dinner, a film and drinks. Today, this could not even be enough for the meal alone – and in another decade, it is likely to stretch even less. It is not a stroke of luck but a characteristic of modern monetary systems: inflation is integrated.
In a new video Cointelegraph, we examine why money loses in a coherent way value over time and why governments really want this in this way.
The story begins in 1944 with the Bretton Woods agreement, when the US dollar was linked to gold at $ 35 an ounce. This link ended in 1971 with the “Nixon Shock”, transforming the dollar – and each major motto of the world – into a pure Fiat, only supported by the confidence of the government.
Since then, purchasing power has been a constant drop: a dollar in 1971 buys what has taken more than seven dollars today. Of course, the impression of money is not the only driver. Energy shocks, supply chain disturbances and the increase in wages also increase prices.
And while central banks insist that inflation at around 2% is “healthy”, the long -term effect is the devaluation of fiduciary currency. So what does this mean for savers? And is there an alternative to the Fiat system?
Some maintain that gold or bitcoin (BTC) offer protection because they are rare in a way that paper money is not. Others warn that without the flexible money supply, the savings would collapse indebted.
The complete video of Cointelegraph plunges more deep into this story, the risks of flight inflation and the strategies that people use to protect their wealth. Discover the full video on our YouTube channel.
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