Is Currency Inflation Higher than CPI? Warning Signals for the Financial Market
According to the report from
#River , actual inflation may have risen to 363% since 2000, much higher than the 88% of the Consumer Price Index (
#CPI ). If true, this means that the real value of currency has declined significantly more than what official figures indicate.
Impact on the Financial Market
Risk of diminishing trust in fiat money
If actual inflation is higher than reported, trust in fiat money may be shaken. Investors will seek assets that are not subject to value dilution, such as gold,
$BTC or other scarce assets.
Will the stock market benefit?
In a depreciating currency environment, stocks, real estate, and tangible assets often increase in value over time. However, this can create asset bubbles, posing significant risks if liquidity tightens.
Crypto may benefit in the long run
Bitcoin, with a fixed supply of 21 million BTC, is often seen as digital gold that helps hedge against inflation. If River's assessment is accurate, crypto may attract additional investment flows, especially from those concerned about the weakening of fiat money.
Conclusion
Whether the official inflation figures from CPI or River's estimates are more accurate, the reality remains that the purchasing power of currency is continually declining. This may lead to a shift of capital flows into scarce assets like crypto, while also posing significant challenges for monetary policy in the future. š