Monday, November 28, 2022
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Changpeng Zhao expects consumer price index to actually be 500% higher than published data

While the community points to the value of bitcoin (BTC) marveling at the high levels of inflation, Binance CEO Changpeng Zhao (CZ) does not believe that US inflation will reach 9.1%, as the the government reported yesterday. His calculations indicate that the consumer price index (CPI) should in fact be 500% higher than the data published by the Ministry of Labour.

In a message on Twitter, CZ points out that inflation is a massive mathematical problem that is increasingly difficult to solve. He explains that 80% of the dollars currently in circulation were issued in the last two years. Therefore, the inflation rate โ€œmagically lowโ€ should actually be 500%.

To determine this, it uses a formula based on the issuance of the money supply, rather than measuring the CPI using a basket of goods and services. He therefore estimates that 80% of the silver issued over the past two years is five times the initial supply.

With its publication, CZ aims to show that the current economic situation is much more dramatic than what governments reveal. To do this, she uses a chart from the US Federal Reserve itself that shows how money issuance has increased.

Behind this high issuance is the centralized control of money by which monetary policy makers โ€œprintโ€ more money to cover debts, which has the effect of increasing the rate of inflation. And with that comes an economic imbalance that makes people suffer seemingly perpetually.

Bitcoin, more and more valuable, even if it does not look like it.

Amid a bear market, investors took advantage of lower prices to accumulate more bitcoins. This is a sign that users are confident that BTC will see its price rise and protect them from inflation, fulfilling the role of a reserve asset that many see it as.

Indeed, bitcoin is a free market currency, not controlled by the government or its central banks. This is the first manifestation of enduring digital scarcity and monetary immutability, a protocol that mandates a definite supply of 21 million coins, as noted some on Twitter.

For his part, David Battaglia, a financial analyst specializing in bitcoin, believes that bitcoin is the only one to strengthen against the devaluation of โ€œhard currenciesโ€ of the traditional financial system.

David Battaglia notes that the โ€œdollar strength indexโ€ (DXY), which is calculated from a basket of fiat currencies, is actually โ€œreally bad right nowโ€œ, which proves that the American currency is not really strengthening.

The analyst adds that โ€œthe euro zone and Japan are heading for a sovereign debt crisis, inflation is destroying fiat money and there is no turning backโ€œ. He therefore believes that bitcoin should not be neglected at present, if a better future is desired.

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