RBI says that inflation will remain high. And, this is due to prevailing war.
Crazy levels of Inflation is NOT a natural disaster, it is a collective failure of how money has been managed.
This is killing your ability to SAVE or INVEST.
[A thread...]
Crazy levels of Inflation is NOT a natural disaster, it is a collective failure of how money has been managed.
This is killing your ability to SAVE or INVEST.
[A thread...]
[1] In simple words: inflation happens when there is too much demand and too less supply.
[2] Now, excess demand can be created simply by printing more money.
And, this is exactly what has been happening post 2008 quite aggressively.
The more you print, the more artificial demand you can create; but supply can't increase so fast.
You can't print goods.
And, this is exactly what has been happening post 2008 quite aggressively.
The more you print, the more artificial demand you can create; but supply can't increase so fast.
You can't print goods.
![[2] Now, excess demand can be created simply by printing more money.
And, this is exactly what has...](https://pbs.twimg.com/media/FUuicyoaUAAvHFY.jpg)
[3] So we have reached a point, where we are simply moving the supply by accelerating/decelerating the flow of money.
Right now the situation is such: that "Real" Returns on money can't be made. Unless you take substantial risks with your existing money (and Invest).
Right now the situation is such: that "Real" Returns on money can't be made. Unless you take substantial risks with your existing money (and Invest).
![[3] So we have reached a point, where we are simply moving the supply by accelerating/decelerating t...](https://pbs.twimg.com/media/FUulgK2akAAtV1S.png)
[4] For example:
There are 0 low-risk investment options (eg. FDs, Government Schemes) which beat inflation.
If you take risk with your money (and actually invest-- in let's say stocks), you at the mercy of central bankers, who will play around with the money supply.
There are 0 low-risk investment options (eg. FDs, Government Schemes) which beat inflation.
If you take risk with your money (and actually invest-- in let's say stocks), you at the mercy of central bankers, who will play around with the money supply.
[5]
- So you can't SAVE in traditional terms.
- There is too much volatility if you INVEST.
- On top of this, you are being pushed to burn your existing money also:
New ways to make people spend their money.
- So you can't SAVE in traditional terms.
- There is too much volatility if you INVEST.
- On top of this, you are being pushed to burn your existing money also:
New ways to make people spend their money.
![[5]
- So you can't SAVE in traditional terms.
- There is too much volatility if you INVEST.
- On...](https://pbs.twimg.com/media/FUuhCtNakAAv-KE.jpg)
[6] In short:
- Work all your life to make money.
- See it evaporate due to high inflation.
- Unless, you are gambling (and taking massive risk with your money), there is no way you are keeping the money that you have already worked hard for.
- Work all your life to make money.
- See it evaporate due to high inflation.
- Unless, you are gambling (and taking massive risk with your money), there is no way you are keeping the money that you have already worked hard for.
[7] Some Solutions:
- Let free market run.
- Is there going to be pain? yes.
- But QE model does not work. And, assumption that governments can handle everything is plain wrong.
Meanwhile, buy Hard Assets (the ones that you like).
youtu.be
- Let free market run.
- Is there going to be pain? yes.
- But QE model does not work. And, assumption that governments can handle everything is plain wrong.
Meanwhile, buy Hard Assets (the ones that you like).
youtu.be
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