According to this article from Bitcoin.com news that I was reading this morning Lebanon's economy has entered hyperinflation with food prices rising 200% in the last month.
Annual inflation sits at 462% but it's really the cost of fulfilling basic survival needs that get most of the focus in a crisis. So a 200% increase in food prices in 1 month period is a serious issue.
Bitcoin As A Store Of Value
Here is a chart showing the Bitcoin price over the last 3 months:
Worst case scenario, you would have bought Bitcoin at the top of the red rectangle in May and sold it for a 19% loss.
That's significantly better than your money losing more than half of it's purchasing power.
It's a bit late for the Lebanese but this is why I wrote The Bitcoin Savings Plan - The No-Skill Strategy To Protect The Value Of Your Money With Bitcoin.
Crypto Debit Cards
But what if hyperinflation comes to my own country? My local food retailers do not accept crypto as payment.
This is where I see a huge benefit in having a crypto debit card. You get the store of value benefit of Bitcoin and then only liquidate as much as you need to as you spend it.
Plus, from your point of view the experience is as simple as using a regular debit card.
How We Can Help The Lebanese
Think win/win.
Right now I have no doubt that a large number of skilled Lebanese remote workers would like nothing more than a gig or two online that pays in Bitcoin.
We don't even have to take the risk of holding Bitcoin and losing money on the price. We can just wait until it's time to pay and then purchase the Bitcoin then.
I did have high hopes for https://ethlance.com but it doesn't seem to have much use.
Where would I fine Lebanese freelancers that I could pay in Bitcoin? Please post the URL of any platforms you know of in the comments below.
The Cause
From the article:
The underlying causes of inflation are always the same. Governments start running larger and larger fiscal deficits and call on the central bank to fund those deficits because tax and bond financing avenues are inadequate. In hyperinflations, central banks are required to virtually fund the governments entire fiscal operations.
The result?
The Lebanese pound has lost 82% of its value against the U.S. dollar on the black market since January.
We're Next
How would you know if your own country were heading for hyperinflation?
You would see whether your government was running a larger and larger fiscal deficit. You would see if (and how often) the government was calling on the central bank to help to fund those deficits.
Look up your own national statistics to reveal the situation in your own country.
This is the case in most developing and developed countries. So it's only a question of the order in which the countries will experience hyperinflation. The problem is systemic.
It's a flaw at the root of the money system, so there's no solution that can be applied to the existing system. A new monetary system is needed.
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