How the Inflation “Eats” the Value of Your Holdings
Whether you’re investing in crypto or fiat currencies, inflation will significantly decrease the value of your holdings over the years.
Can Money Lose Value?
Oh yes, it definitely can! In fact, it has lost more than 50% of its value in the last 30 years alone. What’s even worse, this trend will continue.
Here’s how things are. Money loses value rapidly. Dollars, pounds, yen — any currency you can think of does. The problem is that if the current inflation trends continue, your holdings will keep losing value at an increased rate.
Simply put, if you have one dollar today, it will still be one dollar tomorrow, but you will be able to buy less with it.
Why Does This Happen?
Steady economic growth, rise in wages, and increasing costs of raw materials are the main drivers of inflation rates that vary from one country to another.
The modern economy depends on money. It is growing rapidly, with more goods and services being offered on a daily basis. However, if the economy grows and the same amount of money remains in circulation, every monetary unit’s value will increase, and the prices of goods and services will decrease.
While this scenario would be great for consumers, it isn’t good for producers and creditors, nor for the economy overall. The prices would keep falling until the economy grinded to a halt. Deflation could literally kill the global economy.
So the inflation is the integral part of further growth and enhancement. And increasing the money supply enables keeping up with the economic growth, which leads to price increases.
Moreover, inflation increases the prices of goods and services over time, which effectively decreases the purchasing power of a dollar. And since it happens at a steady rate, your dollar today simply doesn’t have the same value it had yesterday.
How Drastic Is the Value Decrease?
Well, if you don’t have significant holdings, the change shouldn’t have cost you dearly. However, if you do, get ready for a shock. Depending on the currency in which you have holdings, you have lost up to 60% of their value over the past 30 years.
Let’s take the value of the US dollar for an example. $100 in 1990 equals $192.84 in 2019. According to the Bureau of Labor Statistics, prices today are 92.84% higher than in 1990. That means that the average inflation rate of the US dollar during this period was 2.29% per year.
Furthermore, numbers for other major currencies in the world are in the neighborhood.100 UK pounds in 1990 equals to 223 pounds today. 100 euros in 1999, when the currency first entered the market, is equivalent to 141.85 euros today. Even one of the world’s most stable currencies, the Swiss Franc, lost a significant amount of value over this period. Namely, 100 CHF in 1990 is equivalent to 134.23 CHF today.
Is There Something That You Can Do to Prevent This?
Inflation is as inevitable part of the world economy as the sun rising and setting is of the natural order of things. No one can prevent it.
Almost no one, that is. If you’re determined to keep your holdings tied to fiat currencies, your best bet is to look for a bank that offers the best interest rates. However, that solution will only slow down the pace at which your money is losing value.
But if you step out of the box and start looking for decentralized solutions, there’s a way to not just prevent the loss of value of your money over time, but to also boost the value of your holdings.We’re talking about investing in a blockchain-based financial standard. The Anchor two-token system is pegged to the growth of the global economy and ensured by six different security mechanisms against machinations as well as other micro and macroeconomic factors.
Why Would You Invest in a Financial Standard?
Because you want to have holdings that don’t just sit there. You want your money to keep making money. That’s the dream, isn’t it?
Most people believe that their ticket to wealth lies in cryptocurrencies, and while they’re not entirely wrong, they’re missing out on one key element. The key to a stable future lies in crypto, that’s true — but in stable coins instead of in speculative ones.
The value of Anchor is pegged to the growth of the global economy via our proprietary algorithm that calculates the MMU — the Monetary Measurement Unit. As the global economy has only been growing over the past 10 years (between 2.5 and 4.3 percent per year), all the expert predictions point to it only continuing to grow. And as it does, so will the MMU, and so will the Anchor.
Simply put, as the global economy grows, so will your investment, and anything short of a global economy crash won’t be able to stop that growth. With Anchor, your holdings won’t be negatively affected by the inflation rate. In fact, they will be enhanced over time.
We know that no one wants to work and invest just to see that investment fall through. We believe that whatever you have earned in your life should not lose value. That’s why we’ve recognized the most important elements a currency needs to provide and made sure to back Anchor up with secure investments.
So, yes, money does lose value if you put your faith in centralized systems
But if you step onto the other side, you just might be pleasantly surprised. You might find out that Anchor is the one true financial standard, a safe harbor for your investments.
If you’re tired of inflation eating away at your holdings, and you want to keep your earnings, register your interest in Anchor.
Have questions regarding the Anchor project? Check out our FAQ page or ask our team via the LiveChat.