Every working person has a contract to sell their labour at a certain date ongoing into the future. This contact is protected by some pretty strong labour laws in some countries it can be hard to get fired. For many people, especially those without many assets, this is the biggest financial thing they have.
Inflation reduces the value of this contract a lot because it stretches perpetually. Any 1% of inflation reduces the value of your employment contract by that amount times however many years you expect to be employed.
Some may say but you can renegotiate your contract to adjust for inflation. The problem with this is that it requires a negotiation, one you don't have power over. Also it's not saying much because contract negotiations are always possible with or without inflation.
With deflation you get the opposite. Your working contract increases in value and if you decide to stay working it increases even more. This is one big reason why Bitcoin favors working people.
Inflation reduces the value of this contract a lot because it stretches perpetually. Any 1% of inflation reduces the value of your employment contract by that amount times however many years you expect to be employed.
Some may say but you can renegotiate your contract to adjust for inflation. The problem with this is that it requires a negotiation, one you don't have power over. Also it's not saying much because contract negotiations are always possible with or without inflation.
With deflation you get the opposite. Your working contract increases in value and if you decide to stay working it increases even more. This is one big reason why Bitcoin favors working people.
No comments:
Post a Comment