In April of 2020, the coronavirus pandemic led the United States government to pass a spending bill of about 3.5 trillion (that’s trillions with a “T” which means thousands of billions) dollars, and even more US government spending to fight the coronavirus is expected. This is unpresented spending that nobody has ever seen before. (But perhaps well worth it, if it saves lives in the mist of a global pandemic). In the long run, this kind of spending will weaken and devalue the US dollar. (a natural economic side affect from doing what must be done in mist of a dangerous global pandemic). The devaluation of the US dollar will later lead to inflation. The devaluation of the US dollar often leads to the need to raise the federal minimum wage, and raising the minimum wage can be a primary trigger that starts the inflation (at the time you reading this, has there been minimum wage increases lately?) The devaluation of the US dollar will later lead to inflation. Therefore, it is reasonable to conclude that this unpresented spending (of money the US government doesn’t even have, adding to national debt) will at some point lead to unpresented inflation of prices in the United States. This will be a slow cause and effect economic reaction that no politician or president can simply undo. So how do you, as a private US citizen, protect yourself during mass inflation? In the past, heavy inflation drained savings accounts, caused people to work 2 or even 3 jobs for the extra income. If they were land owners, they might have tried farming and living off the land, that they might be fully independent and self-sufficient, without the need to purchase items from others. But now we are living in the decade of the 2020’s and it’s a new era. In the here and now, it’s not hard for modern economists to foresee the following scenario coming to the United States:
On week 1, $100 buys you everything you need from the grocery and retail stores for the week,
On week 2, the same weekly food and supplies you bought last week now costs you $200.
On week 3, the same weekly food and supplies now costs you $300.
On week 4, the same weekly food and supplies now costs you $400.
On week 5, the same weekly food and supplies now costs you $500.
On week 6, you are getting annoyed and frustrated about all this because you don’t see an end to all this inflation! You know that even if the inflation were to stop, your weekly costs went from $100 a week to $600 a week! Just like every working American, you cannot continue to pay $600 a week for what you would normally only pay $100 a week. Knowing that a $100 a week is about $400 a month, and $600 a week is about $2400 a month, you realize that even working a second job still wouldn’t be a sufficient solution. Your budget is broken at no fault of your own. Soon you won’t be able to pay rent or mortgage! Before long, you won’t be able to buy the basic things you need to live, and millions of responsible hard-working Americans are having the exact same problem as you!
Now what if you could have done something to overcome this annoying and dangerous problem before it has begun. Buying a small amount of cryptocurrency before the inflation begins could do just that, and I am going to explain exactly how and why. First of all, you should know and understand that as a first-time buyer of cryptocurrency, it is normal for it to take about 3 weeks to go from the decision to buy, to actually owning cryptocurrency you can trade with at will. It can be done much quicker, but 3 weeks is a good and reasonable time frame estimate for first time buyers. Here is how I figure 3 weeks: You are probably a smart shopper and are used to checking out a few different brands of the same thing before you purchase, to ensure you buy what’s right for you. Week 1 will be spend looking at many of the online places you can buy cryptocurrency, and deciding who you want to go with. Perhaps you did the same before you choose your current bank, or before you bought your current smart phone or computer. It’s perfectly normal, reasonable, and the responsible way to go about it. Week 2 will be spent making sure you have the appropriate resources to purchase cryptocurrency via your chosen cryptocurrency provider, and meet their criteria such as providing them basic payment information. (This by no means has to take a whole week, but I don’t recommend rushing this, so I am allowing a full week in my time frame estimate for this). Then you will make your first purchase of cryptocurrency, maybe you want to start out small, like just $10 or $20 worth of it just to get started, that’s fine. If you can afford more, you may want invest more upfront to attempt greater returns and/or reduce future purchasing fees. Just choose an amount that works best for you! Next, your cryptocurrency provider may inform you that it will take 5 business days before you are able to trade with the crypto you just purchased. This waiting period is week 3. This is how I came up with the 3-week time period estimate for going from “making the decision to become a cryptocurrency owner”, to “actually having cryptocurrency available to you” to trade and/or convert back to cash at will.
Now think back to our inflation scenario. If you wait until the inflation begins to make the decision to buy cryptocurrency, you won’t have it at your disposal to use as you see fit until after 3 weeks. After 3 weeks you will already be feeling the pain of the inflation. It may take you 5 or 6 weeks into the inflation because you probably won’t even realize the inflation is taking place until you are already a couple of weeks into it. (like you get your credit card bill which is much higher than usual which sets off a red flag in your mind, then later you hear on the news that inflation is, and has been, happing everywhere). Just like when it was a surprise to many people that the coronavirus was such a wide spread problem. Life was normal (the Chiefs won the Super-bowl on Groundhog day) then all of a sudden, local governments started taking about shutting down cities and states! This puts you 5 or 6 weeks into the inflation problem, and by this time it may be too late to fight off much of the financial hardship you will encounter. This is why I named this article “Why every American should own at least a little bit of bit(coin)” because you are going to need your foot already in the cryptocurrency world by owning some, so that you are fully ready and able to make cryptocurrency trades and purchases at will, immediately upon realizing that major US price inflations are taking place.
Ok! – Now I will explain how owning the cryptocurrency before the hyperinflation begins, can save you from the financial hardships of the inflation itself.
When the hyperinflation kicks in (something similar to our scenario), it will soon be all over the news. Everyone will be looking for a solution to it. It will be just like when the coronavirus became big news and everyone was looking for a solution to it. In the search for a solution, the cryptocurrency techies will explain to the media and the world how the blockchain works. Blockchain is the tech that is behind cryptocurrencies like bitcoin, Zcash, and all the others. Blockchain basically defines what cryptocurrency is and how cryptocurrency works. The good news is you do not need to know anything about blockchain if you are not interested in that digital techy stuff. (But if you are interested in that digital techy stuff, later you can check out the blockchain YouTube video links that I have provide at the end of this article). Basically, all you really need to know about blockchain is this: Blockchain technology makes cryptocurrency immune to government tampering. Therefore, cryptocurrency is immune to the inflation problem in our scenario.
Getting back to our scenario, when the masses of the general public are feeling the financial hardship described in our inflation scenario, they will want, deserve, and demand a solution immediately! Hyperinflation of the magnitude descripted in our scenario would almost certainly bring protesting crowds much larger than what is seen with “black lives matter” or “election 2020.” The solution will be blockchain cryptocurrencies such as Bitcoin, Litecoin, Zcash etc. When everyone in the general public learns of this, they’ll all begin buying up cryptocurrency as fast as they can. This mega surge in demand for cryptocurrency will lead to huge market value increases to popular cryptocurrencies (most likely the cryptocurrencies with simple & familiar sounding names). In a relatively short period of time, the value of cryptocurrencies will skyrocket! This will happen way quicker than the rate in which prices of goods are increasing from the inflation. At this point, the owners of cryptocurrency whose values have skyrocketed can begin converting their cryptocurrency, little by little, back to US dollars in their bank accounts. Thus, easing any financial hardship. This how it works: For illustration purposes, let’s say you bought some Zcash coins. Zcash coins are a type of cryptocurrency just like bitcoin, only more affordable than bitcoin. Let’s say you bought two of them, or I should say 2.00000000 of them since cryptocurrency goes eight decimal places. At the time you bought them before inflation they cost $50.00 each, so you paid $100.00 for two Zcash crypto coins. During the hyperinflation period, the high demand surge for cryptocurrency causes the market value of Zcash coins to rise from $50.00 to $500,000 each. Since cryptocurrency value has eight decimal places you could sell 0.00020000 of your Zcash for $100.00 and still own 1.99980000 Zcash crypto coins. You could repeat this (the sale of 0.00020000 of your Zcash for $100.00) 5,000 times before you are down to only 1.00000000 Zcash crypto coin! Then do it another 5,000 times before you are out of Zcash.
Owners of cryptocurrency will be able keep their bank accounts increasing in US dollars faster than the inflation period can take their US dollars away when buying goods and paying bills. Thus, there won’t be any financial hardship for those who invested in cryptocurrency before the mass inflation begins.
To review and summarize:
- Massive, unprecedented U.S. government economic stimulus spending to fight the Covid-19, (combined with decades of wasteful government spending in general) will lead to a massive devaluation of the U.S. dollar.
- The massive devaluation of the U.S. dollar will eventually lead to massive and unpreceded price inflation of U.S. goods and services.
- This inflation will be severe enough that it will be a threat to the basic wellbeing of everyone who isn’t a millionaire, about 99% of the population (which includes most of the employed, even many high earners).
- When 99% of the working population is facing severe financial hardship at no fault of their own, a solution will be demanded by the people.
- Therefore, the blockchain techies will inform and remind the media and the public that cryptocurrency is immune to the cause and effect economics of massive government spending that leads to hyperinflation, such as the mass inflation that will be occurring at that time. Cryptocurrency being immune to government tampering is perhaps of the most important features of cryptocurrency, because it is not controlled by any central authority. The hashing functions & decentralized nature of the blockchain makes cryptocurrencies immune to government control and interference that causes things like devaluation and inflation.
- This news of blockchain will be all over the media, and thus will lead the populations to purchase cryptocurrency as fast as they can in the realization of the mass inflation taking place.
- Massive amounts of cryptocurrency being purchased in a relatively short time frame will cause the market value of cryptocurrency skyrocket at that time.
- If you own even a little bit of that cryptocurrency before the inflation period begins, your gains when market value of cryptocurrency skyrockets, would certainly outpace the inflation, allowing you to sell off your cryptocurrency little by little at huge gains, and therefore beat the hyperinflation financial hardship until such time the period of inflation comes to an end.
Now we all know that nobody knows the future for sure, but when you look at what has happened so far in the United States during the new 2020 decade, basic economic principles begin to suggest more and more, that an economic situation similar our scenario in this article, will be coming soon to the United States of America!
The good news is there’s no need to stock up on toilet paper likes its March of 2020! Just like with any other situation whether it be hurricane, earthquake, fire, riots on the streets, pandemic, or some other adversity, you just need to prepare yourself by getting informed. Americans that have armed themselves with knowledge and information in the past, have never regretted it! If you haven’t already, start getting informed by reviewing our “What is cryptocurrency?” page. Then take full advantage of all of our informational webpages.
For those who like the techy stuff:
As promised earlier, here are the Blockchain YouTube links:
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