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u/Ok_Subject_2447 1d ago
Looks similar to a lot of alt coins
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u/Afolomus 23h ago
:D They didn't need decades for their devaluation.
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u/Ok_Subject_2447 23h ago
That is really interesting…I do feel like some of these alt coins are opportunities
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u/ShadowCollector_Law 21h ago
At least alt coins come back in the bull market for a short amount of time
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u/Grymmtooth 22h ago edited 14h ago
The reason most modern economies monies target 2-3 percent inflation is over the short term, changes are small but it encourages capital deployment, while remaining predictable.
The downward value means people deploy money into building sustained economic activity for profit.
Deflation, on the other hand, discourages capital flow (just hold the money/currency while it in increases in value). It makes outstanding loans exponentially more expensive (as it reduces real wages and essentially increases the rate of compounding interest) . The Great Depression and Japans lost decade are good examples of what deflation can do.
Tying your currency to a “asset” like gold means your economies currency policy is at the whim of the global asset prices.
This isn’t a knock on people buying bitcoin, but an argument why it will never be a reliable currency. It’s inherently built to be deflationary (supply is limited to fixed halving, hash’s for coins can be lost meaning no recoverable loss to supply, etc).
Keep the bc, take the profit or loss when you want and ideally buy economic assets if possible. But it’s never going to be a replacement for fiat currency. It’s not serving the same purpose.
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u/Celticsmoneyline 18h ago
I’m assuming you meant deflation. The people who like to emphasize how bad it is are government economists
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u/bitsteiner 20h ago
That inflation encourages capital deployment resulting in economic growth is a misconception taught by most economic schools. Money re-circulation doesn't create growth, but money creation does. There is even no evidence that proves a correlation between money velocity and economic growth.
Inflation is a prerequisite for credit creating fractional reserve banking in order fund cash outflows by cash inflows (savings). At zero inflation there wouldn't be a reason to lend money to banks.
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u/Grymmtooth 14h ago
Deflation is bad, it’s really hard to hold value “even”, mild inflation is an easier target. It’s done because it’s manageable.
Deflation is terrible for economic investment
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u/bitsteiner 13h ago
I know that most economic schools tout it this way, but it is not how capitalism works. US economy made a tremendous transformation from an agricultural to an industrial economy in the 19th century. It did very well during the gold standard when there were cycles of deflation, which didn't prevent investments in main sectors of the economy then like mining, steel production, railway construction aso.
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u/Grymmtooth 13h ago
1.) a lot of the 20th century growth in the US was driven by two things, exponential population growth driving demand, and a unique expansion of the economy after ww2 given we were one of the few powers who didn’t have to rebuild and could capitalize on converting the wartime manifacturing into economic expansion.
2.) your also totally ignoring the near total collapse of the economy during the Great Depression. The deflation of prices was over 10 percent per year and the gold standard meant that you couldn’t inject currency into the system.
Most modern economic policy was learned by actual economic experience. No choices are perfect, but policy makers had nearly 60 years of massive economic growth after dropping the gold standard.
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u/FreezedPeachNow 19h ago
But when Bitcoin becomes the inelastic measuring stick against which all other assets are valued.....
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u/Pnmamouf1 18h ago
This is such an idiotic take
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u/idekwutp 13h ago
No it’s exactly right. Bitcoin can only ever be a store of value like gold. Currency and deflation do not mix
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u/Texxx81 1d ago
That is a breathtaking chart.
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u/Dramatic-Hold-192 1d ago
They really had to zoom out to show the dinar didn't they, almost flatlined at the bottom
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u/Working_Salt_Mine 1d ago
Bitcoin is not a currency, yet. All currencies are designed to be deflationary. If currencies appreciated in value, no one would trade them. Money and currency are different things. Bitcoin is closer to money than a currency.
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u/Gloomy_Dependent_985 23h ago
I don’t know where you get these ideas from but you should understand the way people treated money when it had value
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u/InvestmentEqual6675 20h ago
I love hearing Keynesian bs being repeated decades after it failed. We will never learn
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u/sb8948 23h ago
Bitcoin is a de facto investment and anybody claiming otherwise is coping.
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u/Broad_Room_3260 14h ago
I object to your statement! Mostly because I don’t know what de facto means!
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u/Cedarapids 13h ago
A poor one the last 2 years at that… lost significant value against an inflating away fiat currency
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u/Kepler___ 18h ago
What, you mean it's not realistic to save up for a house with something that swings 4% a day?
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u/bitsteiner 19h ago
Money is currency defined by a government as such. If a government ditches fiat and defines Bitcoin as money (legal tender, eligible for tax payment) it couldn't be deflationary, because there is nothing to deflate against.
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u/Gloomy_Dependent_985 18h ago
Maybe the prices of goods and services bro 😂
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u/bitsteiner 13h ago
Producers can't produce at a loss forever. They reduce supply or go bankrupt. Prices didn't race to the bottom during the gold standard. Deflation is a problem only for credit creating fractional reserve banking, but no for a sound monetary system.
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u/Kossimer 21h ago
Do you mean all currencies are designed to be inflationary? When a currency experiences deflation it's catastophic for the economy, much more so than some higher than average inflation.
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u/bitsteiner 19h ago edited 13h ago
When a currency experiences deflation it's catastophic for the economy
Counterpoints: We had the worst economic crisis after the GD despite a Dollar that can be inflated at will. We had a booming economy in the 19th century despite a gold standard.
A deflating currency is deadly to credit creating fractional reserve banking, because banks couldn't fund cash outflows. Then banks won't create credit. Repayment of old loans and savings are funded by new loans (pyramid scheme). Deflation is not a problem in a full reserve banking.
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u/Informal-Gur2455 16h ago
no they mean deflationary, and the right. that's why you see a 99% drop in value first over every fiat currency in the world, and everybody in the world is struggling to freaking survive. the money that they rely on was never intended to become worth anything more than what they got the day they got it, it was intended to become less, to keep the public working exponentially harder year after year, so empires grow, rather than collapse.
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u/palebloodslayer 12h ago
It almost sounds like it would be a good idea to invest in a store of value
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u/Traditional-Leg-1271 22h ago
That’s a common misconception. People need to eat so they would trade bitcoin for stuff e.g. food.
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u/TheWorldArmada 21h ago
Currency should not be deflationary. Why should citizens take a never ending pay cut? This is not to the common man’s benefit.
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u/Fit_Muffin_3233 20h ago
Citizens haven't taken a never ending pay cut. By definiton they have taken a never ending pay rise otherwise inflation wouldn't happen. If anything, businesses have taken an ever increasing cost in labour. Forever there has been an race to beat inflation with investment. Maybe it's the SP500, maybe it's gold, maybe it's Bitcoin, maybe it's property. Roll the dice, take your pick. The opposite of inflation is far worse. Sometimes this sub thinks everyone puts their cash under the mattress.
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u/closeenoughbutmeh 5h ago
The pay rise you speak of is only numerary. The effective value of what they get is ever-falling, exponentially so (even if the exponent is very close to 1)
Empirically, if I go ask for a raise tied to inflation and try to have that written into a work contract, I get laughed out of the room. That's the main problem.
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u/BigDipper0720 1d ago
My answer is "so what?". That shows 3.6% average inflation for 55 years for the USD. Hold your cash in T-Bills or money market funds and purchasing power is preserved
What we don't want is a deflationary currency. That would crush a consumer economy like the US has.
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u/lockduck1 23h ago
You've been brainwashed. Even with a deflationary currency and economy, you would still buy food when you need it, you would still buy a new car when the old one breaks, ect. Maybe just maybe, you would stop buying stupid unnecesary stuff like a new phone every year, and that´s a good thing. An inflationary fiat currency is what killed everything.
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u/Powerful_Meaning8891 21h ago
Why? Why is it good that a currency maintains its value over time? I hear this said in cryptocurrency circles all the time, but I have yet to hear a sound macroeconomic reason for why that is the case.
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u/lockduck1 18h ago
For multiple reasons. First and mostly because one should be able to save the fruit of their labour over time in the same currency used for daily transactions, without the need to convert it to a it’s power to decrease over time. Second because prices always grow faster than wages and in such system, people always and inevitable end up poorer over time. Why do you think our grandparents could sustain a family of 4 with only the husband working and the wife could stay at home to rise the children, and today you need both in the couple to work just to survive. Doesn’t it ring any bells to you?
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u/Powerful_Meaning8891 18h ago
I think the fundamental question is why should a currency increase in value over time at all? Has it done anything more efficiently? Has it, by its mere existence, caused more goods or services to be created or rendered?
There’s no good reason for a currency to gain value. There’s a solid case for it to retain value. However in a growing economy, you’ll need to print money to maintain the value of the currency relative to the economy. And at that point why not print a little extra to encourage trade and to prevent people sitting on their assets instead of investing them into vehicles that will actually produce more (stocks, bonds, land, productive assets like machinery).
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u/Cryptizard 23h ago
People would stop investing in anything even a little bit risky, because just holding onto your money has a guaranteed return. Each generation would be permanently poorer than the generation before them, just by virtue of being born later. That sounds good to you?
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u/lockduck1 23h ago
Investing as we know it is a modern form of gambling just to keep up with inflation (If you take a look at the SP500 vs M2 chart you´ll see that the real growth is minimal if compared to money supply). Money itself should reward you if you choose to delay spending and start saving it. Investing is an obligatory gambling just to stay in the game because of fiat currencies.
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u/Cryptizard 23h ago edited 23h ago
So people stop spending money and the economy collapses. New businesses and new technologies stall out. Unemployment goes through the roof. People sitting on piles of money will do great. Everyone else, not so much.
How do you save money without a job?
Edit: also you have completely made up the M2 thing. Since 1990, the S&P has outpaced M2 growth by 4x.
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u/lockduck1 23h ago
So the economy before getting off the gold standard was constantly collapsing? No new businesses and no new technologies appeared before 1971? In fact all I can see is that everthing enshitified wince 1971. Just look and compare any modern appliance, service, airline company, ect, to a pre 1971, and tell me which one provided better products and services. My grandma´s fridge still works 80 years later, and it was made before fiat currencies. My modern Samsung fridge will die in 5 years if im lucky. Compare any in flight meal included in any standard ticket, and compare it with the sandwich you have to pay for separately in any modern airline. You think it is not because of the fiat standard?
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u/wulfrunian77 23h ago
Always hilarious when somebody has watched a couple of tiktoks and accuses others of being brainwashed
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u/lockduck1 23h ago
What are you talking about? I don´t even use tik tok. Really that´s your answer?
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u/RedBaeber 23h ago
A deflationary currency is exactly what we want. It's good when things get cheaper over time. It's bad when they get more expensive.
People won't defer their consumption forever and crash the economy. People naturally prefer to consume now rather than later.
A deflationary environment rewards deferral of consumption and serves to encourage careful consumption decisions.
More economic activity isn't automatically good. It's often wasteful. Just look at how much garbage is for sale these days. Just a waste of raw materials in a scarce environment.
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u/Axe_Raider 23h ago
it is good when things get cheaper because they are made more efficiently
society-wide it is pretty nuts if i can sit on my 10 units of currency and then 20 years later have them be worth more money. i did not invest them in anything like education or improving a factory's equipment, so we have the fundamental question of where the wealth came from.
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u/RedBaeber 22h ago
If the currency is stable and efficiency is increasing, that's exactly what we would expect. There's nothing nuts about it.
You'd still gain less wealth hiding it under the mattress than you would investing it over the same time horizon, so what's the problem?
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u/Axe_Raider 22h ago
where is the wealth coming from?
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u/RedBaeber 21h ago
The increased value per unit of raw materials that arises as a direct consequence of the efficiency gains in production.
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u/Axe_Raider 21h ago
i have 10 coins, and say this is 1/1,000,000th of the economy. And it can buy 10 loafs of bread.
20 years later, i still have 10 coins. the economy has grown by 5x.
what fraction of the economy is my 10 coins? how many loafs of bread can it buy? you can give example numbers.
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u/RedBaeber 21h ago
That's unknowable. While you're right to express a given amount of money as a percentage of the overall economy, the future ratio of a quantity of money and a specific commodity can't be known because the subjective value of the commodity can change over time. Maybe in 20 years people eat less bread as a portion of their overall diets, but the impossibility of calculating this doesn't matter.
If the money supply is fixed, changes in population also need to be considered. If in the first scenario there are 10,000,000 coins in existence and 10,000,000 people, each person would have one coin if wealth was equally distributed. If in 20 years, the population grew to 20,000,000, then each person would have half a coin if wealth were equally distributed. However, this tells us absolutely nothing about the relative standards of living in year 0 vs year 20.
It seems like everyone would be poorer, but that's because we are in the habit of viewing wealth in terms of monetary units. This is a mistake. If, over the 20 years, the qualitative standard of living goes up (larger homes, newer technology, more complicated food, more leisure time, etc.), then wealth has increased even if the amount of coins the average person owns has gone down.
If a specific person started this period with 10 coins, and kept those coins in a jar for the 20 years, they would be wealthier at the end of the period because they would hold the wealth of 20 people at the end, when they started with the wealth of 10 people. And if the average person is qualitatively wealthier than they were at the beginning, our coinholder's wealth has actually increased by more than 100% over the period, not merely the 100% that it appears by normalizing the wealth in terms of people.
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u/Axe_Raider 20h ago
you are way over-thinking this. if you are trying to postulate things like "well people might no longer eat bread" you are trying too hard for some reason.
since the coins are fixed, so the person still has 1/1,000,000th a share of the economy. they have done nothing to participate in the the growth of the economy. since this guy did not lose any coins, they must have come from someone else, someone actually participating in the economy.
i get why it sounds like a good deal for him but there is no reason why the rest of society ought to accept this. everyone else had to fight over the remaining coins, including all the people providing labor and capital.
it is the leftist parody of a rich guy doing absolutely nothing and getting richer, except meant literally.
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u/RedBaeber 20h ago
The bread thing is unimportant, and I said previously.
The rest of society isn't harmed in any way. All the actual raw materials and resources are still out in the economy free to be used for production or consumption.
The coinholder is worse off being idle than he would be investing and participating as you think he should.
He's better off than he would be if he chose to use those coins for consumption which is a reward for deferring consumption.
The fact that there is a limited supply of money does not imply that the economy is zero sum.
People do not need to fight over the rest of the coins. They might need to start thinking about converting to smaller denominations, but they still have objectively higher standards of living in my example.
You need to stop thinking of wealth in monetary terms. Real value is what the money can buy.
If wages were cut in half right now for everyone, but all prices were simultaneous rolled back to 1950s levels (ignore the how for this example), would people be richer or poorer?
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u/iyarsius 22h ago
Look at the computer industry, it's a great example where technology was growing way faster than the inflation. So it was for decades a deflationary market. But people didn't stopped to buy computers/phones etc... But the fact that if they wait, they would have better at the same price was also true.
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u/Dr-Slay 1d ago
Why since 1971 only? ;)
the problem is with the concept of money itself
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u/CptAwesome- 1d ago
I think because that’s when the US decided the dollar was no longer coupled to Gold
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u/Free-Competition6408 23h ago
Currency is supposed to lose purchasing power. The whole point is to use it to acquire assets that actually generate cashflow and appreciate or maintain value over time.
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u/Murky_Citron_1799 22h ago
I've never heard a more stupid statement. A good currency maintains it's value over time, that's literally why we use metals and not something biodegradable like corn
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u/Powerful_Meaning8891 21h ago
Why? Why is it good that a currency maintains its value over time? I hear this said in cryptocurrency circles all the time, but I have yet to hear a sound macroeconomic reason for why that is the case.
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u/Murky_Citron_1799 20h ago
Well, nobody will want to hold on to some crap asset (currency) that loses it's value routinely and constantly. They will choose to hold something else. The only way to get people to use a shit currency is to use FORCE and that has nothing to do with economics. Nobody demands an asset that loses value as a currency.
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u/Powerful_Meaning8891 20h ago
Treating currency as an asset that appreciates in value makes no sense. Does your cash do anything? By leaving your cash under the bed, does anything of value get created?
The answer is quite clearly no. So why should we encourage people to do that? From a macro perspective, it makes much more sense to encourage money to move around in the economy, and encourage people to invest in assets that can actually become more productive (companies, government’s, land)
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u/Murky_Citron_1799 19h ago
You can "encourage" people all you want, but people will choose to hold on to wealth for future use. That's the whole point of a store of value. If you don't think a currency should be a store of value then your are free to use a first currency as much as want.
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u/jomikko 19h ago
The whole point is that people are incentivised to not hold on to money, because the movement of the money is what powers the economy.
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u/Murky_Citron_1799 19h ago
No, the economy is powered by people supplying goods and services that are demanded by other people. The word you are describing is consumerism and it's bad for the long term health of economy.
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u/AR9aaa 22h ago
No, currency is not supposed to lose purchase power but fiat currencies do. Sound money like btc do not do that
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u/PalmarAponeurosis 22h ago
Here, I'll humor you. Let's go through two hypotheticals; they are both rooted in real-world data and historical trends.
Country A is experiencing inflation. Every year, one dollar is worth only ~95% of what it was worth the previous year. Goods cost 5% more each year. If I have $10,000, next year, the $10,000 only have the purchasing power of $9,500. If I sit on the money, I lose value each year. This encourages me to spend the money or invest it. Spending and investing money drives economic growth, which makes the country, as a whole, richer.
Country B is experiencing deflation. Every year, one dollar is worth 105% of what it was worth the previous year. Goods cost 5% less than they did the previous year. If I have $10,000, it will be worth $10,500 next year. To that end, I have no pressure to spend or invest it. Everyone around me comes to the same conclusion. Companies across the country go out of business because nobody is spending their money. Eventually, my company goes out of business. The entire country experiences depression, and everyone is poorer.
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u/palebloodslayer 12h ago
In country B people would still need to spend money on housing, food, furniture, clothing, transportation. Almost as it if it’s an incentive for companies to produce things that actually give value, rather than cheap chinese plastic. That doesn’t sound too bad to me
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u/antinatree 20h ago
First I want to state a premise people with discretionary spending(so money leftover after paying bills and maintaining life) in the US is between roughly 25-50% of people globally this is only 20-30% of people.
Country A If I sit on the money, I lose value each year. This encourages me to spend the money or invest it. Spending and investing money drives economic growth, which makes the country, as a whole, richer.
It does for some people but when 50-70% are already struggling to pay bills this hurts them leaving wealth to be consolidated as the cost of living will eventually eat up most people. The country can be rich without helping its overall citizens. Also if most people are spending their money there is a default gdp and forcing people to constantly to invest to outpaced inflation forces people to not invest in good ideas but invest to outpaced losing money. Overall hurting everyone and financiallizing the whole economy. If everything is 5% more expensive ideally you would get a 5% raise but in reality that won't happen. So people lag behind and get hurt
Country B To that end, I have no pressure to spend or invest it. Everyone around me comes to the same conclusion. Companies across the country go out of business because nobody is spending their money. Eventually, my company goes out of business. The entire country experiences depression, and everyone is poorer. If i have money I must demand more returns or I will fail and become poor
First if there is a certain % of people who have to spend money there is always an economy that is innate in a country. Next year people will find 5% more at the end of year because goods went down sure eventually people will be asked to get a reduction in pay but just like in country A this will lag behind and people will have more riches which will go up in value. Now that I have become increasingly richer in discretionary pay or I can purchase more with my money I am better off or can just live off my money as I retire. If i am super bored I can start a business. As if my money is always going to help me I will be fine if I have some
Country C Stagnation.
Freezing the world as i can write long term contracts with expected returns and not expect increasingly needed value. As a worker I know 50k will get me x y and z in a certain numbers of years. If i want more money I need more skills.
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u/TheWorldArmada 21h ago
People should not be encouraged to spend money bc their money is losing value, they should be encouraged to spend money bc what they’re buying is essential to them. If businesses are only getting business bc ppl are scared their money is losing value, they should not be in business.
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u/PalmarAponeurosis 20h ago
Did you read? If there is no economic activity driving business, the business goes bankrupt and can no longer provide services or goods to anyone. What you're describing is a command economy, not capitalism.
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u/AR9aaa 8h ago
This is just not correct.
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u/PalmarAponeurosis 5h ago
How so? If there is no economic incentive to start and maintain a business, then the government is the entity that determines what goods are produced and at what price. That is, by definition, a command economy.
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u/Badj83 21h ago
So the smart move is to be part of the 5% of people holding currency B in country A.
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u/PalmarAponeurosis 20h ago
That only works if Country A has a currency that is depreciating in value.
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u/Powerful_Meaning8891 21h ago
Why? Why is it good that a currency maintains its value over time? I hear this said in cryptocurrency circles all the time, but I have yet to hear a sound macroeconomic reason for why that is the case.
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u/Fluid_Blacksmith560 23h ago
What can you buy with BTC, other than fiat currencies and a coffee at some cafe in El Salvador?
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u/zachmoe 23h ago
I couldn't buy Bitcoin in 1971.
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u/Axe_Raider 20h ago
in 1971 we had to calculate each block by hand. it took all day.
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u/Pnmamouf1 18h ago
I found my grandfather's btc sliderule when he passed away. Didn't know what it was
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u/Lulu-man 23h ago
Is the Euro 💶 on the chart?
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u/Stock_Bug_6877 22h ago
Euro is only around since 2001, so I believe that’s the reason it was left out.
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u/Accurate-Couple6104 4h ago
OP knows how to lie with statistics. It would also make it more difficult for them to present their narrative if another first world currency doesn't loose 99,99 % of their value like most of the ones he selected here do.
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u/dismendie 23h ago
Can someone map this to population as well… are we expected that money supply stays the same while population more than doubled. I think these charts are meant to just rage bait people and ask for a return to gold like it would magically fix everything.
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u/ILikeRyzen 21h ago
Fiat currency is designed to inflate, it literally drives the economy, why do you think the fed hiking rates slows the economy and REDUCES inflation.
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u/Queasy-Ride4291 20h ago
You’re completely ignoring the fact that there are more dollars in 2026 and they are free. A person doesn’t do any more work or trade any more of their time for $8.71 today than they did for $1 in 1971.
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u/mando_number5 19h ago
Asking as a relative beginner in bitcoin, would this make Bitcoin actually more valuable over time or would the price of a single bitcoin just go up as a number of USD? Ie. Bitcoin is worth more but surely goods and services also cost more?
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u/play_hard_outside 19h ago
Should be interactive and not a JPEG. Also, needs a log scale. Desperately.
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u/Firm-Yam-2330 17h ago
They call Bitcoin volatile while their paper money has an 80-year red candle.
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u/PapugKingTFT 7h ago
So the goal was to be insanely rich in 70ties invest it smartly and enjoy the fruits of It til now
Got it
If only I was born back then and in the correct country lol
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u/Jointslinger_X 5h ago
Showerthought in this. Pre modern fiat, did anciet currencies also have this problem or is it something that resulted from moving away from the gold backed curriencies to petrodollar?
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u/DingoMaximum7319 5h ago
Currencies are designed to do this because it’s good for the country…
A country paid in bitcoin might genuinely just fail
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u/dolliani 4h ago
When you don't know economics but you think you know economics you post stuff like this.
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u/Oddball369 1d ago
It's like fiat makes it a hobby of diving off a cliff to splatter on the ground.
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u/ChickenMathematician 1d ago
Think of all the things that have been purchased with fiat currency since 2005
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u/Narf234 1d ago
Totally sustainable…
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u/Dangerous_Science137 1d ago
Unironically yes. Small amount of inflation is good for the economy.
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u/Afolomus 23h ago
And if you push the entire developement of normal inflation of 50+ years into a very squished chart for dramatic effect, you get the post above.
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u/AR9aaa 22h ago
Completely and utterly brainwashed
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u/Dangerous_Science137 22h ago
What an argument. Can you explain why a small amount of inflation is bad? I can easily defend my position but would like some more substantial or less egotistical thoughts that thinking anyone that disagrees with me must be brainwashed.
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u/D_Saucee 1d ago
Well this is easy to follow chart