Hey Jessavers
The more I learn about inflation, the harder it becomes as a topic, it is so nuanced and hard to really peg down one theory over another. You see some things are going down in price, like web services that we use, we have access to free services like messaging apps which drastically lowered the cost to communicate and on the other side homes have shot up in price like a rocket.
We live in a world where some markets have massive deflationary forces, and others have strong inflationary forces. They somewhat offset one another in some ways when trying to make a general calculation.
I don't think that I need to be a professional macroeconomist to know that my cash is losing value when prices for things I want weekly and monthly continue to rise. As wages are flat living expenses, continue to rise, and without much room to increase your salary, you have to start tightening the belt.
A snapshot into South African inflation
I don't know how it feels for other countries, but things have moved up in nominal terms pretty quickly. If we take a look at the last 12 years (2006 -2018), just looking at the figure you can see double or tripling of the price.
| Product | Price 2006 | 2018 | Annaulised Inflation over 12 years |
|---|---|---|---|
| FLORA MARGARINE | R9.49 | R30.99 | 18.87% |
| WEETBIX | R8.99 | R24.99 | 14% |
| FIVE ROSES TEA | R13.95 | R36.99 | 13.76% |
| LONGLIFE MILK | R5.75 | R13.99 | 12.32% |
| WHITE BREAD | R3.75 | R12.99 | 20.53% |
| SPEKO RICE | R7.59 | R19.99 | 13.61% |
| MAYONNAISE | R10.99 | R13.99 | 2.27% |
| ICE CREAM | R18.99 | R43.99 | 10.97% |
| FROZEN CHICKEN | R21.89 | R69.99 | 18% |
| SIX PACK SOFT DRINK | R16.70 | R36.99 (for a four-pack) | 10.12% |
If we work out the final one with the inflation reduction of the 6 pack reduced to a 4 pack you get a 19.3% increase each year for the 12 years.
I can tell you one thing, my bloody wages ain't moving up at these rates each year so where does that extra purchasing power have to come from? My savings naturally, and for those who don't have savings, their paycheque brings them less and less.
According to TheSouthAfrican.com
Yes, we can argue that the price of data has come down or some other shit, but I'm not fucking buying data every day, I am buying things I stuff in my belly, and it's eating more of my paycheque each week.
However, if I was to do that same calculation in Bitcoin.
| Product | Price 2006 | 2018 | Price in BTC |
|---|---|---|---|
| FLORA MARGARINE | R9.49 | R30.99 | 0.00056790 |
| WEETBIX | R8.99 | R24.99 | 0.00045795 |
| FIVE ROSES TEA | R13.95 | R36.99 | 0.00067785 |
| LONGLIFE MILK | R5.75 | R13.99 | 0.00025637 |
| WHITE BREAD | R3.75 | R12.99 | 0.00023804 |
| SPEKO RICE | R7.59 | R19.99 | 0.00036632 |
| MAYONNAISE | R10.99 | R13.99 | 0.00025637 |
| ICE CREAM | R18.99 | R43.99 | 0.00080613 |
| FROZEN CHICKEN | R21.89 | R69.99 | 0.00128259 |
| SIX PACK SOFT DRINK | R16.70 | R36.99 (for a four-pack) | 0.00067785 |
Since we didn't have BTC in 2006, I cannot provide a price comparison, but I can do one for 2018 to show you how many sats it would cost you to purchase these items.
Note: Calculations one at BTC's lowest price in 2018 which is $3 3781.81 or ZAR 54 569
A decade or more of debasement
When pricing things in Bitcoin in the last decade, you can see how cheap goods and services have actually become and for Bitcoiners who hold on to their savings in the asset.
I think it will continue to show the truth of what prices should be like, especially once the asset is firmly in the trillion-dollar market cap range and volatility reduces considerably.
As a South African, you can see why I am so bullish on Bitcoin when my poor purchasing is being taken from me through no fault of my own, and I've needed to find ways to protect it.
I don't see this trend reversing in the slightest, and it's only going to push more of us down the socio-economic ladder until the economy reaches a tipping point.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
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