Inflation is all we hear about in the United States these days. At 8.3% we can feel its direct impact on our bank accounts, daily expenditures, vacations, and much more. To understand other countries' inflation rates, we could use this 8.3% rate as a benchmark for perspective. Based on the most recent data from TradingEconomics, inflation in Egypt is at 13.1%, in Lebanon it's at 206%, in Turkey it's at 73.5%, and so on. In a recent article in Bitcoin Magazine, Pete Rizzo and Dr. Saifedean Ammous painted a realistic and eye-opening picture of hyperinflation unfolding in Lebanon.
I will spare you the lengthy explanation of what inflation is and how it affects all of us. In one line: inflation is too much money for too few goods. But how did this "too much money" happen? Dependency and over-reliance on the US dollar is why economies of the Middle East are cratering. A small blip in the US economy can create financial storm in the Middle East. Most countries around the world who are heavily reliant on the US dollar in their central reserves are feeling the impact of the US monetary policy by the Fed.
Especially in countries that don't produce commodities such as oil. Hence, in Lebanon and Egypt we're witnessing out-of-control inflations, while in oil producing countries we're witnessing a lesser impact for inflation and by extension a lesser impact of US monetary policy. Of course, the "too few goods" part is exacerbated by supply chain problems especially with the most recent lockdowns in China and the Chinese unrelenting zero-covid policy.
Again, too much money for too few goods. The Fed's reaction to the covid outbreak and the out-of-control balance sheet created a new reality for countries that relied on their FX dollar reserves. Add to that, the supply chain nightmare and the continuous volatility in supply chain operations means continuous uncertainty. Countries that produce "real stuff" like commodities can whither this storm for a while, but others can't.
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Herein lies the value proposition for Bitcoin. Or one of the many value propositions of Bitcoin. Let's take El Salvador for instance. While commodity-producing nations such as Saudi Arabia, Kuwait, Qatar, Morocco, and others in the Middle East have had their most recent inflation prints rise month-over-month. El Salvador, a nation that adopted Bitcoin as legal tender in 2021, has lowered its inflation print by 2% month-over-month.
Why should a nation be subject to another country's monetary policy? That's my question Lebanon, Iraq, Algeria, Morocco, Syria, Egypt, and others in the Middle East. Your reserves are being diminished and destroyed by the US Fed's policies and QE then QT then QE then who knows where? Own Bitcoin and you end inflation. Simple as that. Regardless of politics, reality is we're entering a post-American global economy with multi-currency reserves, oil settlement, and trade. Bitcoin will be the currency that runs in the veins of this new global economy.
For oil producing nations, Bitcoin also solves the problem of excess production and waste. Mining Bitcoin is a decentralized wealth source that enables oil and other commodities production to forecast demand accurately and eliminate the need to fine tune production levels with every macro move. Mining Bitcoin gives you the ability to use excess energy after all contracts have been satisfied and honored. It's possible, it's necessary, it's time.