The sense of inflation-theory in our globalized world out of the sight of a german student...
At the moment I´m writing my bachelor thesis about the topic of inflation and besides that I got very enthusiastic about cryptocurrencies in the last months. Owning some raw metals myself and trading for some years now it was a matter of time finding a page in my screchbook where I noticed some prices of Bitcoin(445$), Ethereum(9,64) and and Litecoin(3,73) from about May 2016 when I wanted to buy them but rejected because it seemed too complicated. Now I´m holding them and some other altcoins but got in about 5-10 times higher and asking myself how inflation may also touches these markets. It occurs when the money supply and therefor the price level is increasing - with that - decreasing the real purchasing power of a currency. We witnessed a drop of about 26$ Billion or 30% on the whole cryptocurrency-market in the first 2 days of this week and now already pumping back without anybody really knowing the reasons. So where went this money? Should it be because of the hoax about the death of Vitalik Buterin? Really?? Scamming or paying trading-bots, market analytics or just some whales diving back to the deep ocean..
No matter what it caused a lot of loss to many.
When you read about inflation you think about loss. The systems behind works the same almost everywhere, let it be the US, Europe or so on. Central Banks like the Federal Reserve or the European Central Bank, they decide whether to increase or decrease the total amount of money or the Bank-interestrate with the to one big goal to keep prices of real-goods stable. They measure this by questionable calculations out of an average shopping cart, where they decide on their own how important food is - getting more and more expensive - and otherwise luxury stuff like entertainment electronics or cars which are getting cheaper. All this in our world of tremendous loans and state debts. And guess what? - they are deeply connected to inflation and state-interests.
So what is the point of that in the cryptocurrency market? What am I or are we investing in? Are they something like companies we are investing in with the hope to make profits of their success or are they currencies we are using to hopefully get out of the FIAT-system and their influences? So if they are somehow currencies, how do we keep their system stable that the value stays when the FIAT-money goes? Our monetary-system once already solved this problem by limiting the amount of money to real values - the Goldstandart. Then our powers-to-be cheated till today and to the point of no return where we actually are - no Goldstandart, NO real morally based law with the Centralbanks and huge amounts of money in the handy of few, and obvious unfortunately in the hands of some wrong. Do we need a Bitcoinstandart now and will we be more intelligent when dealing with it? Cryptocurrencies are a way out of the bad and I´m convinced that we owe the answers to this questions to the future because it won't work forever like it is today. We will neither change mathematics nor do numbers lie!
There are a lot of question marks in my head that I like to answer to myself and you over the time and hopefully we find the answers together!
My studies, close to the end now, somehow feel more like getting to know my enemy and also my thesis is something like betrayal to myself because I have to argue scientific like they call quoting out of textbooks which are accepted by our system and the public and so called scientific opinion.
I know that a lot of these questions have to be asked already and some of them even answered, but if so, not were I was able to read them or to get satisfaction of. If we can answer those question or not, for sure a lot of more will come, but we will help ourselves and a may lot of others for sure by trying to answer them all. I will bring these facts to my work, even if not in the size I would like to and even if it will end in just another drawer. I think here this will not happen and it will at least stay in some heads so let´s start thinking.
Join me!