You don’t know this but you are on the losing side of the economy. Whichever way you put it, if you don’t act smartly you are going to lose money in the long run, the economic system is designed like that. Inflation will eat all your savings and profits over time if they are left in a bank account not invested in a portfolio wisely. Inflation is a silent killer and inevitable phenomenon which can’t be ignored.
If you look closely, economics is very well designed to keep financially illiterate people poor and rich people insanely rich. The rich have been ruling the world since the dawn of money and are ruling still to this day. They are very much aware of the changes that happened in the world and they are the ones to update quicker than the ones who are financially illiterate and act accordingly to the circumstances.
40% of all the dollars ever existed was printed in the corona era, this is the reason why the stock market is booming and has the highest recovery in the history of the stock market, people made more money in the lockdown period than otherwise. This is the reason why the separation between the rich and the poor is increasing.
This is the prime reason why every market after the Covid-19 pandemic has been bombing because the federal government is printing more money than ever. Nowadays every market is getting oversaturated with money and is able to produce returns that were unimaginable before for the given timeframe. Especially in the crypto market, people are making millions from their little investment but this is not good for the economy because sooner or later the prices of everyday items might go up and make life hard for everybody else.
This might lead to hyperinflation if things didn’t go according to plan but hasn’t, here’s why:-
Why to save money if they are printing it by the hour, by Robert Kiosaki from the book “Rich Dad Poor Dad”.
The Hedge Funds
Hedge funds are a classic example of how the economy works. It basically focuses on making the rich even richer but contrary to popular belief it doesn’t directly steal from the poor instead impacts them by manipulating the market. Basically, hedge funds are larger mutual funds that are purposefully unregulated by the government because they are generally owned and run by the powerful people who generally make the law, and by their standards, they should not be considered under the regulating law by the government.
The best example here would be the GameStop situation which happened in 2021. It is said that they have been manipulating the stock market for decades but when a regular guy did it with GameStop stock that it was the talk of the town and people with the power wanted this rule to change, how ironic?
For more information on the GameStop situation refer to the article:
THE WORKING OF ECONOMICS
1.Central banks control all the money:-
Every country has a central bank that controls all the supply and demand of money in the system. It tries to regulate supply with demand and demand with supply to make a balance between both. If the supply of money in the system becomes oversaturated then central banks increase the interest rates on loans and credits and do vice versa if the demand for money is oversaturated.
Economic gurus often say, there is no need to save your money if the Fed prints more of it by the hour. To achieve financial independence you only need to broaden your mindset and understand how money works.
2.Debt is money:-
You might not know this but a dept is a form of currency, actually, it is money. Whenever you take a loan or any kind of credit, you generate money out of thin air for the lender. Credit and debt are the backbones of making money in this modern financial system. The USA has generated so much money through debt, that it's military funding all comes from debt. Generally, the more developed a nation is, the more dept it has.
It is said that there are two ways to enslave a country, one is by sword and the other through debt.
3.Crypto is a more legitimate form of currency than Fiat:-
This claim is made simply on the fact that government-issued currency is in unlimited supply whereas every crypto ever launched has to be in a limited supply, which should be the real form of money. This limited supply as a result appreciates in value with time but the unlimited supply of dollar depreciates in value as inflation and raises the prices of everything. One of the factors that don’t allow crypto to be a real currency is the fact that the number of them can be unlimited, anyone with the knowledge of the crypto works can make their own currency, which is not good for the economy.
Another reason can be the volatility, generally, very few people hold a large number of crypto coins, which makes them behave like the real currency, which is again not good for the economy as a whole.
4.Economy favors the rich:-
The economy was created by the rich for the rich in the first place, the poor people were only involved to do all the work and make money for them. Paying the middle class periodically is the biggest illusion of making money, while the rich earn even when they are sleeping. Very few people holding a quarter of the world’s wealth while the majority of the people can’t even afford to eat is the biggest truth of the economy that shows it favors the rich. The rich have done a good job of keeping their practice very secret and not sharing it with people who don’t believe in hard work, dedication, patients, etc.
Going against the above context, we can surely say the rich deserve all the things in the world because they are the ones who did the hard work when no one understood and valued them.
Whether you like it or not, inflation is a real thing and acts as a tool of the rich to keep poor people, poor. It is a silent killer which no one seems to understand in the long run. People have accepted the fact that the price of things goes up in value but they never stop and ask how it is affecting them financially.
Over the years the government has full control over inflation but sometimes screw-ups definitely happen which ends up impacting the whole nation. These exaggerated situations of inflation are termed hyperinflation. Basically in this particular situation, the value of the currency goes down dramatically along with the purchasing power. To combat this government introduces higher denomination banknotes which further widens the problem as the currency becomes less and less valuable. These hyperinflations generally happen in developing countries and the opposite of hyperinflation happens in rich countries like Qatar and Doha.
In Zimbabwe, due to the situation of hyperinflation, the government was forced to introduce the largest denomination notes, like up to $100 trillion, which still isn’t that valuable as compared to USD.