There are somany people in the USA that believe inflation is just 2.4% and heading down.
And their personal inflation is less then 2.5%.
It is incredible how the government and the FED have folled people to believe inflation is just number.
Heck I believed it myself.
When you study economics you learn about the inflation and about how it is created.
A number constructed fromabasket of goods.
You deflate the whole economy by this number to get “real gdp”. Real Gross Domestic Product.
But untill you discover Bitcoin and you ask yourself: what is money? You have no idea what inflation is and what you are talking about.
Inflation is not a number/scalar but a vector.
There are millions of prices at the same time.
Take your own life. Look around. What are you buying? Groceries, a vacation, gas, a car, office equipment, an online book, netflix services.
For you alone we might have say10.000 products and services that you buy.
Your inflation is dependent of the country you live in, your age, your job, your city, your family, your personal hobbies.
Now you got a wife or a husband and you got kids.
Again the inflation of your household changes completely. We now have the goods an services of your wife, and all kinds of goods and services like diapers, nannies, toys (expensive) in your basket of goods and services.
Now imagine your husband has a leak in his hands. He has debt. Yes you married an indebted guy.
Now he needs to pay high creditcard fees. Are these inflation? Yes. Now the interest payments on your husband’s credit cards might factor in in your inflation.
Imagine your wife lives Louis Vuiton bags. Now the price of these luxury bags are in your inflation vector.
Every year your wife needs a new 5000 usd bag otherwise she is not happy.
Inflation is a function of your age, your family composition, where you live, your city, your lifestyle.
Now imagine you want to be wealthy. Yes you don’t vare about the Louis Vuitton bag, but you want to own the Louis Vuitton stock, the NVidia and Tesla stock and the Porsche stock!
Yes you are not collecting stupid cars like those silly Youtube fake millionaires but you want to own assets, stocks Villas.
Now your inflation vector consists of precious growing stocks with a multiple of 10-50x.
You now have an inflation of 25-50% each year.
You see how silly that inflation number of 2.5% is?
It is a fake number, to just make it easy to have a fake economics discussion.
To cover what is trully happening with your money.
To cover that your money on your bank account is actually becomming less worth.
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Runy
Island Wealth