Winners and Losers During Global Inflation Crisis
There are winners and losers during the global financial crisis.
We are seeing the paradigm-shifting impact of the financial crisis - manifesting as unemployment and home losses, for example.
One of the prime causes of the financial crisis is global inflation - manifesting as decreasing exchange rates for major currencies and increasing precious metals prices, for example.
Many of us are familiar with the phrase, "Wealth is not destroyed, it is merely transferred," and the relevance of this affirmation is apparent during the GFC and global inflation crisis.
There are winners and losers during global inflation crisis - here they are, and why: Losers: 1.
Holders of fixed investments.
During global inflation crisis, the currency is continuously losing value.
Imagine organic material that is dying - this is your savings and your bonds.
Your savings and value of your bonds are deteriorating.
2.
Loaners.
If I extend a loan to you and inflation has greatly deteriorated the currency by the time you pay me back, then I am the loser.
3.
Holders of inflating currencies.
If my currency is losing value, then I am losing value.
4.
Those who use the money last.
When excess currency is created, initially it has full value, and loses value only as it spreads throughout the market.
Consider this - if the Fed executed another round of quantitative easing, although no one ever touched the money - it simply sat there - then could there be inflation? It seems that it is only when the money is actually used, that it is added to the money supply and the condition of excess money known as inflation, results.
Imagine food being passed down a line, diminishing in value with each pass.
In the global financial market, with each pass of excess money, the effect of excess money on the money supply shows more clearly and the money loses more value.
Thus, during global inflation crisis, the winners are the first users of the currency.
The losers are the last users of the currency - at the back of the line.
Winners: 1.
Investors and money movers.
Inflation deteriorates a currency like old age and grows upon money like mold.
If I am investing my money and multiplying my money, then the growth can offset the deterioration.
If I am moving my money, then mold cannot grow.
2.
Borrowers.
If you loan me $100k and by the time I repay you, $100k plus interest can only buy $80k worth of goods and services, then I - the borrower - am the winner.
3.
Holders of commodities and safe currencies.
Inflation tends to greatly raise the price of commodities such as precious metals, food, and energy; therefore, if I am holding commodities rather than currencies, I am typically a winner.
Also, I am a winner if I am holding the currencies that are least likely to lose value.
4.
Those who get the money first.
The value of inflated currency decreases as the currency is passed from merchant to merchant, therefore, those who are able to use the excess money first, are using it at its highest purchasing power and thus - are winners.
As previously mentioned, we are seeing the paradigm-shifting impact of the financial crisis.
One of the prime causes of the financial crisis is global inflation.
Further, although it appears most of the planet is seeing their money vanish, wealth is not destroyed, it is merely transferred.
Thus, there are winners and losers during the global financial crisis and global inflation crisis.
The losers are holders of fixed investments, loaners, holders of declining currencies, and those who use the money last.
The winners are investors and money movers, borrowers, holders of commodities and safe currencies, and those who use the money first.
You can use this guide to assess to what extent you are a loser or a winner, during global inflation crisis and the GFC.
We are seeing the paradigm-shifting impact of the financial crisis - manifesting as unemployment and home losses, for example.
One of the prime causes of the financial crisis is global inflation - manifesting as decreasing exchange rates for major currencies and increasing precious metals prices, for example.
Many of us are familiar with the phrase, "Wealth is not destroyed, it is merely transferred," and the relevance of this affirmation is apparent during the GFC and global inflation crisis.
There are winners and losers during global inflation crisis - here they are, and why: Losers: 1.
Holders of fixed investments.
During global inflation crisis, the currency is continuously losing value.
Imagine organic material that is dying - this is your savings and your bonds.
Your savings and value of your bonds are deteriorating.
2.
Loaners.
If I extend a loan to you and inflation has greatly deteriorated the currency by the time you pay me back, then I am the loser.
3.
Holders of inflating currencies.
If my currency is losing value, then I am losing value.
4.
Those who use the money last.
When excess currency is created, initially it has full value, and loses value only as it spreads throughout the market.
Consider this - if the Fed executed another round of quantitative easing, although no one ever touched the money - it simply sat there - then could there be inflation? It seems that it is only when the money is actually used, that it is added to the money supply and the condition of excess money known as inflation, results.
Imagine food being passed down a line, diminishing in value with each pass.
In the global financial market, with each pass of excess money, the effect of excess money on the money supply shows more clearly and the money loses more value.
Thus, during global inflation crisis, the winners are the first users of the currency.
The losers are the last users of the currency - at the back of the line.
Winners: 1.
Investors and money movers.
Inflation deteriorates a currency like old age and grows upon money like mold.
If I am investing my money and multiplying my money, then the growth can offset the deterioration.
If I am moving my money, then mold cannot grow.
2.
Borrowers.
If you loan me $100k and by the time I repay you, $100k plus interest can only buy $80k worth of goods and services, then I - the borrower - am the winner.
3.
Holders of commodities and safe currencies.
Inflation tends to greatly raise the price of commodities such as precious metals, food, and energy; therefore, if I am holding commodities rather than currencies, I am typically a winner.
Also, I am a winner if I am holding the currencies that are least likely to lose value.
4.
Those who get the money first.
The value of inflated currency decreases as the currency is passed from merchant to merchant, therefore, those who are able to use the excess money first, are using it at its highest purchasing power and thus - are winners.
As previously mentioned, we are seeing the paradigm-shifting impact of the financial crisis.
One of the prime causes of the financial crisis is global inflation.
Further, although it appears most of the planet is seeing their money vanish, wealth is not destroyed, it is merely transferred.
Thus, there are winners and losers during the global financial crisis and global inflation crisis.
The losers are holders of fixed investments, loaners, holders of declining currencies, and those who use the money last.
The winners are investors and money movers, borrowers, holders of commodities and safe currencies, and those who use the money first.
You can use this guide to assess to what extent you are a loser or a winner, during global inflation crisis and the GFC.
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