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by donatj 1371 days ago
Have you seen the dollar’s buying power recently?

I went from living very comfortably to living paycheck-to-paycheck in about 6 months. Holding my value in USD has become a significant risk.

5 comments

> Have you seen the dollar’s buying power recently?

Yeah, its up like 100% over Bitcoin and like +30% over Euro, Yen, and GBP? In fact, holding Cash/USD has been basically one of the best performing things in my entire portfolio this year (after oil/energy)

Have _you_ seen BTC's buying power recently?

USD is not up. Everything is down. Have you been to a store recently?
USD is hugely up vs Yen and Euro. You buy anything from overseas recently? USD is hugely strong. USD is up vs the stock market, vs the bond market, vs the overseas bond market, vs overseas stocks.

USD is also up vs Bitcoin.

EDIT: Feel free to look at gold, silver, and other 'inflation hedges' while you're at it. The main thing going up is commodities (oil and food), which is certainly important. But there's more to the world than those two things.

Inflation is basically the exact definition of the change in USD's value relative to goods & services.

Unless you are arguing we currently don't have any inflation, which would be a tough sell :)

Also this last CPI report oil & gas pulled inflation down whereas just about everything else pulled it up. Food is hot, but a lot of other things are as well including non-commodity service based industries.

> In fact, holding Cash/USD has been basically one of the best performing things in my entire portfolio this year (after oil/energy)

This is what I'm arguing. Do you deny it?

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In a bear market, you don't have to outrun the bear to get ahead. You only have to outrun your friends.

That all depends on the timeframe you’re looking at. The Bitcoin I bought (not nearly enough of) at under $80 is doing a lot better than any cash I still have from around then.

A year or two from now Bitcoin very well might be back above it’s all time high.

When people are complaining about the declining purchasing power of USD, they are mostly talking about since November 2021, because that's when inflation started to really kick in.

Its ironically, also when BTC really began to collapse from its $60,000 high. So it really demonstrates how much the BTC was benefiting from low-interest rate / inflationary policies.

> So it really demonstrates how much the BTC was benefiting from low-interest rate / inflationary policies.

It's almost like it's not a hedge at all and just another part of the exact same game as the rest of the market.

Inflation numbers for December of 2021 were 6.8% CPI and 9.6% for wholesale (way higher when you look at goods only rather than services).

CPI was nasty for most of June 2020 to June 2021. It's just that fewer publications were picking up the story yet.

https://www.bls.gov/news.release/archives/cpi_07132021.pdf

If 8% inflation has put you paycheck to paycheck, living "very comfortably" was already living far beyond your means.
The 8% figure doesn’t match real life. My electric bill doubled, my natural gas bill doubled, my municipal bill doubled, my groceries doubled.Everything that makes up the vast majority of my expenditures had doubled.
You could be the guy where it's only raining above his house, but the people you are having this conversation with also live in the world and disagree with your figures as much as the statistics do.
Now imagine you had half as much USD for your groceries, because you decided to put it in BTC a year ago instead.
Quite literally what happened. My groceries cost over twice as much.
Ignoring the fact that you’re implying a 100% USD inflation over the past year, you’d only have 25% of the purchasing power if you “invested” in BTC per the GPs example.
"Inflation" is an average of several things. Actual inflation doesn't have to be even across all items. Groceries went up more than other things.

Edit: some examples https://www.ers.usda.gov/data-products/food-price-outlook/su... Retail egg prices went up 38% from July 2021 to July 2022.

Yes. And eggs are the highest increase on that list, at 38%—still a far cry from 100%. Comparatively, fresh fruits are down 0.8%, and fresh veggies up only 0.8%.
I cannot think of a single individual item that I buy at the grocery store that has doubled, let alone more than doubled.
IIRC the giant flats of Costco eggs went up to 3-4x their former price over the last year or so. Still a great deal, they're just not "holy shit that's practically free!" like before.
Weird. Eggs by the dozen (along with onions, one of the most volatile staples at the grocery store) are up only like 75% for me. Admittedly that's a lot and more than I had expected when I went and checked but I'm still seeing very different numbers.
Another datapoint: eggs are up 3-4x for me in Chicago.
I'm not sure other eggs are up as much as those large-flat Costco ones (60 eggs? Something like that). I have a feeling they were losing money on them before, they were so cheap.
Do you happen to live in California? If so, most of the egg price increase is likely due to compliance with Prop 12 regulations.
Nope, midwest.
Cereal and butter. A box of cereal is $7+ now, whereas it was $4 not long ago. A pack of butter was $2.50 and now close to $5.
Meanwhile pork and chicken are roughly the same as they've always been where I am, at least ignoring sale pricing.

Hell, I got 3.5 pounds of steak tips for $20 about a month ago.

My food costs have absolutely gone up, but it's MUCH closer to the "10 percent" figures quoted as inflation than anything close to what you have said. Where do you live and shop?

> I got 3.5 pounds of steak tips for $20 about a month ago.

A lot of cattle was recently liquidated (made into meat products, this year) as grazing fields have been drying up and, due to climate change, meat pipelines have had to start making MAJOR changes.

Butter actually wasn't $2.50 at any point in the recent past. This is easy to track.

https://fred.stlouisfed.org/series/APU0000FS1101

So of the two items you cherry-picked to support an assertion that groceries have more than doubled, one is up...around 30-35%. In fact, there doesn't appear to be a single food item in this list that has doubled in the past year. Eggs are the closest.

https://www.bls.gov/regions/mid-atlantic/data/averageretailf...

Well butter prices have gone up almost 100% -

https://www.ams.usda.gov/mnreports/dywabutter_cme.pdf

https://www.globaldairytrade.info/en/product-results/butter/

But that's not the whole story. Prices are not primarily set by wholesale costs for many goods.

I think cereal has only gone up 30%, although there have been other events that influenced Kellogs pricing (notice how the Poptarts boxes have changed slightly) and then there has been the opportunity to steal away some extra profit - https://www.wxyz.com/news/now-cereal-prices-are-on-the-rise-... (search for "Mills").

It isn't literally what happened because that would be equivalent to your groceries costing 4 times as much.
People are unable to distinguish "prices have gone up from money printing" from "prices have gone up due to the pandemic and the war between Russia and Ukraine". Neither bitcoin nor gold can hedge against the latter.
Prices have gone up because we have demand side inflation:

https://www.mercatus.org/publications/inflation/inflation-la...

Which is mostly driven by putting trillions of dollars into the economy. The Fed had 1 trillion on it's books during the 07 recession. It has 8 trillion on it's books now. That's a major problem.

I guess you'll have to put me in the camp of unable to distinguish. There is always an "emergency" reason to print money.
> Have you seen the dollar’s buying power recently?

Yeah, it's been going up relative to almost all other currencies and especially BTC.