Post
Topic
Board Economics
Re: Money as a store of value...
by
doomloop
on 15/05/2023, 18:09:34 UTC
More precisely, basically Fiat money is a storage of value we know about it, but indeed the fiat money cannot maintain its value because the supply is always increasing which makes its value continue to decline, whether its use for saving the crisis or whatever is intended in the goal so that it print money In addition and then circulated, it will make the Fiat currency decrease in value because the supply of money is a lot, while the demand for money is only relatively stagnant that makes a currency decrease in value. Therefore, even though Fiat is a storage of values, but it is not effective in the long run because based on the situation above.

Gold, Bitcoin, Silver and others as a storage of values that are effective now also depending on the market demand, because most people already believe in gold or other noble minerals as a storage of values so that makes it worthy of a storage of value.
That is what it is. Even if it can store your wealth, a currency cannot be trusted for the long run considering there can always be different waves of economic crisis over the course of let's say 10 to 20 years, and when there is an economic crisis, there is inflation with it and we all know what happens with some currencies when there is inflation and more currencies being created in the background.

So it is basically useless to store your wealth in liquid or fiat currencies, instead, one should choose commidities and assets and store their wealth in those, just like Gold and real estate, Bitcoin is also good but has higher risks due to its volatility.