There is potential for hyperinflation, just like having a police force means there is a potential for extrajudicial killings and all sorts of nasty stuff. The thing is when was the last time a western country experienced hyperinflation? I think Germany in the 1930s. Hyperinflation is a made-up problem.
Who said anything about hyperinflation? Regular inflation occurs constantly (and by design) and must be compensated for. If you just leave your cash in a checking account and walk away for 10 years you will come back to radically less buying power than when you left it - the number might be the same, but the total money supply will have grown tremendously thus reducing that money's buying power. According to inflation estimates $1 USD in 1970 was equivalent to almost $7 USD in 2021 value. The point of an investment portfolio is to outpace this dilution so that your wealth grows and you are not diluted into ruin by the printing of new money. A balanced portfolio that has some percentage allocated to instruments that tend to hold a steady value or grow inversely to inflation are critical. BTC is shaping up to be a good choice to add alongside of gold and other precious metals which have historically been used for this purpose. It is short term VERY volatile, but long term it has consistently WAY outpaced inflation.
No. The point of an investment portfolio is not to outpace inflation. The point of investing (in general) is to trade an amount of present consumption for a greater amount of future consumption. This is true whether the inflation rate is positive, negative or zero. If you simply save and hedge against inflation (i.e. you invest in something that provides a real rate of return of zero), then it means you're trading an amount of present consumption for the same amount of future consumption. In other words, you lose because you're not getting compensated for delaying consumption. At any rate, neither gold nor BTC are considered good investments by people who know anything about economics and finance, since neither of these assets provide income, but of course feel free to invest your money in whatever you like.
Hyperinflation can happen in any society if the productive capability of the society goes to the shitters. Printing money does not trigger such a collapse though. So if anyone is scared of hyperinflation, look at how industries and services in the country do instead of at how the money supply change.
> The thing is when was the last time a western country experienced hyperinflation?
So it's alright because western countries aren't suffering any side effects?
> Hyperinflation is a made-up problem.
My country suffered hyperinflation multiple times. It was so bad we had to create new currencies with every iteration. I think the most recent episode happened in the 90s or so.
