Inflation can tell us many things. On the other hand, it cannot give us the big picture. There are other indicators to look at. One such thing that inflation cannot tell us is, when will the world return to normality or if there is going to be a new normality instead. Let’s look at the information that inflation can provide and how is it useful for us.
Pandemics and inflation
As you know, inflation basically tells us how money is depreciating. What you buy with a certain amount of money today, you most likely won’t be able to buy a month from now. But the inflation number itself does not tell us exactly how money is appreciating and depreciating. Air fares, for example, have increased by more than 10% in April alone, and are up 16% on last May. But they cost 17% less than they did before the pandemic. Car and truck rental prices, for example. They fell 23% from January to May 2020, and then rose 87% from May 2020 to April 2021 – a total of 44%.
The pandemic has disrupted everything. In 2019, you could order goods and be assured that they would be shipped as soon as possible. That’s not so easy today. The main fact is that there is no sign that price volatility is ending. Many of the biggest price movements have only happened in recent months.
Thanks to price volatility, many people have resorted to alternative ways of preserving value over the past year. For example, investing in gold or buying cryptocurrencies. Although cryptocurrencies are also volatile, they still offer people a safe haven and, to some extent, the certainty that they won’t lose their money.
Even corporations started to diverse their portfolio and started investing in cryptocurrencies as one of the possible hedges against inflation. It is evident that cryptocurrencies are starting to serve more and more as an alternative to the current investment options in a world, where inflation eats up all the interest rates on savings accounts and where even negative interest rates are being installed now.
Platon Life also offers an alternative to the traditional financial system, showing you that the digital world and finance can provide comfort, security and safety for your finances. For example, you can use our PlatonCoin (PLTC) to buy vouchers which you can then redeem with our partners, use it for staking to earn passive income or even try trading.