Financial, Economic and Social Mood Update (August 1, 2021)
The cost of living, the rate of price inflation, the Consumer Price Index (CPI) can be measured many ways. One of the more accurate methods in the recent past has been to measure prices in terms of value of gold. Doing so gives us a much higher rate of inflation (and a far worthless fiat currency) compared to traditional methods. If we were to measure inflation in terms of the price of Bitcoin BTC since the advent of the Bitcoin BTC white paper in 2009, the result is far more devastating. A consumer price index has been kept for the USA at least since the year 1700, or before the USA became an independent nation – when it was still a colony of England. The CPI had a value of 130 in the year 1700, which decreased to an all-time record low of just 63 in the year 1739 – in other words, price deflation of 37 percent in the span of 39 years. It is amazing to consider today, but that means that fiat money actually increased in value back then. Compared to today, that sounds like paradise.
The American CPI reached an index value of 100 by the year 1770, and the last time the index had a value of 100 was the year 1899. The CPI did indeed fluctuate in between 1770 and 1899, but the net change in that 129 year time span was nothing at all. Once again, it is amazing to consider that the US Dollar held its value so well back then.
The CPI surpassed an index value of 200 by the year 1919 (right after the end of World War One), 300 by 1951 (during the Korean War), 400 by 1968 (during the Vietnam War), 500 by 1972 (still during the Vietnam War), 600 by 1975 (the end of the Vietnam War), 700 by 1977 (during the Presidency of Jimmy Carter), 800 by 1979 (still during the Jimmy Carter years), 900 by 1980 (the end of the Jimmy Carter years), 1,000 by 1981 (the start of the Ronald Reagan Presidency), 2,000 by the year 2000 (the end of the Bill Clinton Presidency) and 2,692 by the year 2011 (during the Presidency of Barack Obama). It was at this point when the CPI valued in terms of Bitcoin BTC absolutely skyrocketed. The index hit 34,996 in 2012, 716,072 in 2013, 1,211,401 by 2016, 2,153,601 by 2017, 9,374,895 by 2019, 24,584,515 by 2020 and a staggering 114,417,656 year to date in 2021. Do you ever have the feeling that your money has become worthless? This is the reason why – you are not imagining things.
As I said in last month’s blog, I can list a significant number of countries where the standard of living is much lower today than it was many years ago – these being limited to 87 countries where I have seen this with my own eyes. Given the collapse of fiat currencies, which has been caused by too much government interference in economies, too much debt, policies dedicated to waging war, redistributing wealth (to enable corrupt politicians to “buy” votes, to make people lazy & dependent, to control people, to destroy individual initiative) the standard of living has fallen virtually worldwide, in the vast majority of countries and territories. This is not unlike the fall and demise of ancient Rome. Think of countries such as Zimbabwe (which used to be the bread basket of southern Africa when it was known as Rhodesia before 1980), Guatemala & Honduras (which had fully modern cities as late as the 1940s and which now have among the highest crime and murder rates in the world), Venezuela (which used to be among the most affluent countries in Latin America as recently as the late 1990s) and the list goes on. A notable exception is mainland China, which turned to many free market economic policies after the fall & demise of Mao and his followers in 1976.
