If you feel like you are becoming poorer. IF you feel like your quality of life is declining. If you have a saving account in a bank and you think you are saving up money for a better future then you have to read this article till the end. Trust me it`s worth it!
Not many people are aware of this, but there is a hidden tax that everyone is paying, it`s called money printing and inflation. Everything is getting more expensive day by day, and the money that you have in your bank is losing power at record rates. It sounds outrageous, however, it’s true. In this article, we`ll discuss facts that will make you aware of just how much you are getting poorer every day and how you can actually fight this injustice.
I`m sure you have at least once heard about INFLATION. Inflation is the decline of the purchasing power of a given currency over time. But do you know why you have to pay hundreds of dollars more for phones and computers during the last few years, or why rents are becoming less and less affordable every year?
Federal Reserves and Central banks all around the world are the ones responsible for printing new money. Every time banks are printing money, the number of dollars, euro’s and other currencies rise and it becomes less valuable. If you could buy a good meal in a restaurant for $10 in the past, after the government’s print money, you now need $15 to buy the same meal, but your salary or deposits stay the same, so you now can buy less. That is the simple logic.
But it does not stop at that! Who is getting this new money? That is one more major question that we need to answer. Usually, corporate banks are getting this money from Central banks as a loan. After they get this money Corporate banks invest this new money in Big corporations or give them out as new loans. When banks give out loans, even more money is created out of thin air, and poorer regular people become. Here is how it works: Banks give loans to businesses, businesses use this money to invest or buy supplies or pay their workers. The end receivers of this money, like suppliers and regular workers after getting this money go and deposit some of this money in the Same banks on their saving accounts. Banks use these saving accounts to give out new loans, and the cycle goes on. Even corporate banks who can`t print money are creating new money out of thin air and the value of your money is dropping down even more.
Who can this happen? Well, banks don’t need to have all your money saved in a vault. By law, they are required to have just a little portion of it as a reserve. For example, in The United States, New York, Banks need to hold just 10% of People’s money as reserves. (source: Federal Reserve Bank of New York) so if everyone decided to cash out at the same time, banks would not have enough money to give it to you, maybe just 10% of you.
This problem is becoming even worse during the pandemic when governments are printing billions, even trillions of dollars to give them out as stimulus to businesses. Trillions of dollars, that have been printed, in reality, are devaluing your money even more. So how can fight this injustice?
The same way as rich people do. I`m sure you have heard that Rich are becoming Reacher and Poor are becoming Poorer. That is because rich people know how to grow the value of their money. They invest the money in better stores of value than regular currencies. In the past you needed hundreds of thousands to start investing, however right now you can start investing even with 50$ right from your smartphone, and it does not take more than 10 minutes to register with a broker.
One of the best stores of value lately has been Bitcoin. Since 2016 BTC has gone up more that 4000%, meaning if you invested $1000 in BTC back in 2016, when price was around $400, right now you would have made more than $40,000.
It’s still not late, since March BTC has gone up more than 240%. The price of BTC is around $18,000 right now but some analysts are saying it might be reaching $300,000 by the end of 2021. IT’s becoming more and more popular with Billionaires and Institutional investors as well. Ray Dalio, billionaire and CEO of the world’s biggest investment fund has called bitcoin gold-like asset. MicroStrategy already holds more than $700 worth of BTC, and is raising $400 more to invest in BTC. You can start investing in BTC with as little as $30. You can buy a small fraction of Bitcoin on eToro, and the value of your investment will move accordingly to the price of Bitcoin. BTC is a great way to fight inflation. There are only 21 million bitcoins issued. Governments and Banks don’t control it. It’s a currency of the people. By investing in BTC you can protect your money from inflation.