Cost of living will rise FOREVER, and it’s NOT because of capitalism

The financial system is intentionally designed this way; inflation is a FEATURE, not a BUG. Let me explain:

Capitalism: An economic and political system in which a country’s trade and industry are controlled by private owners for profit. Capitalism is just a way to distribute resources.

Capitalism allows individuals to create products or services and sell them at a profit. Entrepreneurs are incentivized to create products that can solve problems at scale. It’s how we got most of the world’s inventions like the light bulb, the iPhone, and cars.

Capitalism promotes healthy competition. If the world was capitalist, then there would be competition in everything. There would be no huge corporations and monopolies probably wouldn’t exist because they would be too difficult to maintain.

Capitalism promotes better technologies to reduce the cost of production. The cost of living would DECREASE in a truly capitalist economy. Entrepreneurs would find ways to increase the supply of goods and services that people want/need, in order to make a profit!

New entrants to markets would work their hardest to take away every bit of profit that monopolies earn today. More competition = better processes to produce goods and services = supply increases = prices drop It would lead to innovation and higher-quality goods and services.

Capitalism combined with the internet leads to an economy where a small group of people don’t just keep getting richer. There would always be somebody new to compete and disrupt the top 1%. The internet allows anyone to create value with low upfront costs.

In a capitalist system, the financially illiterate wouldn’t lose 5% of their wealth every year because we would use incorruptible money. Today we use government-issued (FIAT) currencies. Fiat is controlled and issued by the most corrupt and selfish people in the world.

Fiat currencies are “money by decree.” They are forced on consumers and are a way to steal from savers. Over time, fewer people want to hold the currency and get rid of it ASAP to buy other things. This leads to higher prices – demand for goods increases and supply decreases.

The value of fiat currencies is based on trust in the issuer and supply/demand. If more currency is issued, the buying power of previously issued units is moved to the newly issued units. As more of a currency is printed, costs will rise in terms of that currency!

Every jurisdiction has its own currency. There are 180 currencies around the world. You have to convert your currency every time you travel. Each currency loses value at a different pace because issuers extract wealth from savers at different rates.

Fiat currencies force everyone to invest just to maintain their purchasing power. If you’re not investing, you can assume that your wealth will be stolen because the governments issuing the money are greedy. Investing is just buying goods that are scarce and retain value.

Governments issue more money and decrease the value of their currency intentionally. They want you to spend to increase the Gross Domestic Product (GDP) of their country. If you don’t spend your money they just print money and spend it themselves.

Central banks can create money by pressing a button while everyone else has to work for it. The US Dollar is the world reserve currency. The Federal Reserve is the US central bank. It has the authority to print the money that the entire world uses as a savings vehicle.

In 1971, US dollar officially became a fiat currency and was no longer backed by gold. When this happened, the US dollar became fake money – it could no longer store value! In 1971, financially literate savers started buying homes, gold, and stocks as a store of value.

The US government spends as much dollars as it wants without thinking about opportunity costs – it can just borrow more at low rates. The Federal Reserve works with the US government to buy US government bonds to keep interest rates low.

In a way, the US government has a blank check that’s funded by anyone who saves in US Dollars. If it wants to, it can easily fund things like wars or bailouts for companies that are considered “too big to fail” and systematically important.

When governments can manipulate the money supply and prop up certain companies, they don’t allow the weak businesses to be washed out of the system. They allow weak monopolies to survive and slow down or prevent the country from growing.

This is what happened in March 2023. The banking system was bailed out and weak companies continued to survive. The banks that made mistakes and were technically insolvent in early 2023 can continue making the same mistakes and face no consequences.

All banks are insolvent. They would be bankrupt today if too many savers withdrew their deposits. The fiat system is designed to let banks extract wealth from the little guy forever – banks can keep borrowing as much as they want as long as we trust fiat currencies.

A fiat currency system with fake money and no opportunity cost allows people to make bad decisions and recover from them without having to pay for their mistakes. All of this ends with the risk-averse (savers) getting poorer and the risk-takers (investors) getting richer.

Costs of necessities like homes have been increasing because of the availability of 30-year mortgages with low rates. Banks gamble and create more money by issuing debt because they know they’ll be bailed out if something goes wrong. This can only happen with fiat currencies.

The people who understand the system take advantage by borrowing money and buying more homes than they need. They don’t realize how their purchase of a second, third, fourth, or fifth home is part of what’s creating the wealth gap. THIS IS NOT A RESULT OF CAPITALISM!

We aren’t living in a capitalist society today. Governments and central banks get to print money and control how capital is used. We work for 40-60 hours a week to earn money that banks can print and governments borrow more of whenever they want. This is why your costs rise!

The people who support the fiat currency system are the ones who benefit from it. You are their cash flow. This includes real estate investors and stock investors. The solution to all of this is a form of money that can’t be printed. This form of money is Bitcoin / cryptocurrency. (Rajat Soni)

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