Bitcoin (BTC) received a lot of free publicity this week as inflation data showed that prices rose faster than experts once expected.
The latest June 10 report on the Consumer Price Index (CPI) published by the US Bureau of Labor Statistics (BLS) showed that the median hourly wage of American workers is at its lowest in this century.
Inflation returns to the 2008 level
Inflation is one of Bitcoin’s best friends. The inherent deflationary nature allows users to save for the future without worrying about inflation damaging the value of the savings.
Since the outbreak of the COVID-19 pandemic, central banks have launched a unique money-printing program, and the consequences are now alarmingly clear.
In May, 12 months after the coronavirus pandemic began to spread outside China, the US CPI rose by 0.6%.
This is 5% higher than the same month last year, and means that inflation in the US is now at its highest level since 2008, the year of the financial crisis.
“The May CPI report shows a resumption of activity in sensitive categories that dominate price pressure for the second month in a row,” Bloomberg analysts said in a comment on the report.
The graph of the US consumer price index. Source: BLS
Perhaps not surprisingly, bitcoin spokesmen sound the alarm right off the bat.
“The United States has just had 13 years of high inflation. This was unexpected for politicians and economists, “said Dan Held, development manager for the Kraken cryptocurrency exchange, in a series of tweets.
“For a person with an average IQ, it was quite obvious given the enormous money pressure (incentive) that happened after COVID.”
Held noted that wages do not keep pace with any changes, which means that American workers on average earn less per hour than at any other time in the 21st century, adjusted for inflation.
He concluded that “wages have not kept pace with inflation, so workers have become poorer. TL; DR wages are more “stable” than prices, which are easier to regulate, “he concluded with reference to a similar period in the 1970s.
The CPI hides real inflation rates
Other Bitcoin numbers have used inflation in recent years as a good example of how the monetary system tricks them into forcing them to participate.
Although the CPI is still relatively low in percentage terms, a large number of assets are not included in the scale. Examples of these products and services that give citizens confidence in the future, such as real estate and university education.
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Michael Sailor, CEO of MicroStrategy, and Sividan Amos, author of The Bitcoin Standard, spoke specifically about the contrast.
“The CPI is the wrong measure of inflation,” Sailor argued in March.
“Volatility is the wrong measure of risk. The first distracts us from the problem, and the second from the solution. “