Saving Is Great, but Only if You Save by Buying Bitcoin
By: Sylvain Saurel
Tags: Bitcoin, Investing, Cryptocurrency, Money, Finance

Saving Is Great, but Only if You Save by Buying Bitcoin

Bitcoin is a total paradigm shift.

Illustration by Sylvain Saurel

I frequently read articles from people explaining that saving your money, once you have built up an emergency fund, is a mistake. This advice is based on the premise that the ravages of monetary inflation will cause you to lose the full value of what you have saved.

To give you an idea, a $1,000 purchasing power in 1971 doesn’t even represent a $150 purchasing power in 2020. So, someone who saved that $1,000 in 1971 in a bank account would end up with the same amount in U.S. dollars, but with a purchasing power reduced by more than 85%.

If you wanted to keep the same purchasing power from your 1971 $1,000, you should have found an investment that would have allowed you to turn it into $6,425.

This is largely feasible for the richest people who have access to a whole bunch of investments, but for the poorest people, it’s something extremely difficult.

The current monetary and financial system suffers from original sin from which seven deadly sins arise that will lead to its loss sooner or later: the central bankers can print as much fiat money as they want.

The amount of U.S. dollars in circulation never stops increasing over time

Thus, between 2010 and 2020, the circulating money supply of the U.S. dollar, the famous M2 Money Stock, increased from $8,432B to $19,226B, an increase of +128%.

This endless monetary inflation of the U.S. dollar, and other fiat currencies, has catastrophic effects on the value of your money. For example, the purchasing power of $1,000 in 2010 is only $824 in 2020.

Some people have difficulty understanding the problems induced by this great monetary inflation that we are experiencing. They tell themselves the following:

“I had $1,000 in my bank account in 2010. I still have $1,000 in 2020. So I haven’t lost anything.”

This simplistic reasoning is the one that the education system unfortunately instills in you. Everything is done to make you not understand that the current system is flawed and not fixable.

Saving in the current system makes you lose money

If you still have $1,000 in your bank account in 2020, that $1,000 does not give you the same purchasing power for a simple reason. In 2010, you had $1,000 while the M2 Money Stock was $8,432B. In 2020, you still own $1,000 but the M2 Money Stock is $19,226B.

The decisions of a few central bankers, who are unrepresentative of the people, are slowly but surely impoverishing the majority.

Under these conditions, everyone advises you to never keep more money than your emergency fund. Warren Buffett frequently repeats the following: “Cash is Trash”. This is true in the current system.

Here I will tell you about a brand new savings technology that brings about a complete paradigm shift from the fiat system. With this savings technology, you will be able to save if you want to. This savings technology is Bitcoin.

Bitcoin is the best savings technology

If you are reading this article, I am sure you have already heard of Bitcoin. You have probably even become a Bitcoiner by reading my articles. It would be an incredibly positive thing for me to know that I have been able to allow some people to fully open their eyes to Bitcoin.

Nevertheless, I will continue my demonstration thinking about helping as many people as possible as always.

Bitcoin has a first essential difference from the US dollar: it exists in limited quantity. There will never be more than 21 million BTC. The Bitcoin system is decentralized and has no leader. Anyone can become a node of the Bitcoin network, and it is precisely the nodes of the network that guarantee the monetary rules of Bitcoin.

Its programmatic monetary policy abstracts you from the arbitrary side of human decisions. But also from the corruption inherent in human beings.

If you had bought 1 Bitcoin in 2010 and then kept it, you would still have 1 Bitcoin in your possession in 2020. Many people tell me that it is the same as with the U.S. dollar. Well, it’s not!

Indeed, in 2010, you had 1 Bitcoin out of 21 million BTC. In 2020, you still have 1 Bitcoin out of 21 million BTC. Bitcoin protects your purchasing power. Bitcoin is clearly the best savings technology ever created.

Bitcoin allows you to save money by protecting your wealth

The scarcity of Bitcoin is to be contrasted with the endless monetary inflation of the U.S. dollar. De facto, Bitcoin continues to appreciate against the U.S. dollar. In 2010, when Bitcoin was first quoted in U.S. dollars on trading platforms, its price was barely $0.06. The Bitcoin price has been rising since then.

On December 27, 2020, as I write this article, the Bitcoin price is $27,355. This represents an increase of +45,600,000%.

With Bitcoin, everything you’ve learned about managing your personal finances should be reviewed. Bitcoin is a total paradigm shift as I have already told you. If saving your money is not a good idea with the current monetary and financial system, with Bitcoin, it is an excellent idea.

Bitcoin protects you from the ravages of monetary inflation of fiat currencies. By exchanging your U.S. dollars for Bitcoin, you can opt for low time preference. You can take control of your life, and live your life on your own terms.

The next time you read an article from a personal finance guru who tells you that saving your money is a mistake, you’ll know what to say to him or her in a commentary from now on: saving can be a great thing, but only if you do it by buying Bitcoin.

The Bitcoin revolution is underway!