Tesla CEO, Elon Musk, recently weighed in on a Twitter discussion about the purchasing power of the US Dollar and the inflation rates over time. Musk joined the co-founder of Dogecoin, Billy Markus, to slam the US inflation rate and, in a sarcastic tweet, said that the advocates of inflation “claim to be progressive”.
It all started with a tweet showing the purchasing power over the last 70 years. The tweet showed that the USD has now lost 91% of its purchasing power. Once it caught on, Twitter users began weighing in on the conversation. Although opinions about the cause differed, most users agreed that something needed to be done to regain the strength of the USD.
But it did not take too long for the two big crypto names to stop by and air their opinions concerning the rising inflation and its effects on the US economy. The US inflation rate has steadily climbed since this year began and is currently at 6.20 % with a Consumer Price Index CPI of 276.72. To put things in perspective, the rate was at 1.2% exactly one year ago in November 2021. The rate has climbed higher every month since then, doubling between November 2020 and March 2021, and also between March 2021 and May 2021.
Musk and Markus React
Elon Musk was short and direct in his tweet. While condemning the inflation rate, he said that inflation is the highest regressive tax and went further to lament why the “progressives” were advocating for it. Musk’s tweet is not unconnected with the devaluation of the currency which inflation causes. Devaluation can greatly reduce the value of a currency’s purchasing power.
While Musk focused on the “progressives”, Markus took a dig at the mainstream media who he said are trying to cover up the impacts of inflation on the nation. He said that the media was calling inflation “somehow good” in an attempt to downplay its negative impacts.
Cryptocurrency Interest Grows as Inflation Increases
It is not a coincidence that the general interest in cryptocurrencies in the US has grown over the last 24 months just as the inflation rate has grown. More US residents are reportedly turning to cryptocurrencies to save their financial value from devaluation. Cryptocurrencies have often been touted as sure assets to prevent losing to rising inflation rates.
Last week, the CEO of MicroStrategy, Michael Saylor told Elon Musk to consider purchasing cryptocurrencies with the money recovered from his intended sale of 10% of his Tesla shares. Musk had asked for opinions about selling the stocks to pay tax on unrealized gains last week. In his tweet, Saylor said that Bitcoin is a good investment to hedge against inflation and provide financial stability.
As the US grapples with its inflation rates, more crypto investors will be born as more people find a way to avoid losing their purchasing power.