Key Points
- Fred Krueger suggests Bitcoin as a tool for wealth preservation amidst rising inflation and cost of living.
- He argues that Bitcoin, due to its decentralized nature and limited supply, is a superior hedge against inflation.
Fred Krueger, a Bitcoin advocate and entrepreneur, recently shared his views on inflation and the escalating cost of living. He did so via posts on X, a social media platform, on December 30th.
Krueger discussed the reduced purchasing power due to inflation over the past five decades and suggested Bitcoin (BTC) as a potential solution for preserving wealth in the long term.
Costs Rise Beyond Wages
Krueger pointed out that the cost of essential goods and services has soared since 1971. He mentioned that the price of a gallon of gas increased from $0.36 to $3.00, and a slice of New York pizza went from $0.25 to $5.00.
The cost of education, such as tuition at Stanford University, has seen one of the steepest increases, from $2,400 per year to $66,000. This is a 26-fold rise.
In contrast, wage growth has lagged. The federal minimum wage rose from $1.60 to $7.25, a mere fourfold increase. Salaries in fields like engineering, law, and aviation have grown seven to nine times.
Inflation’s Unequal Impact
According to Krueger, rising costs have disproportionately impacted the bottom 50% of earners, who struggle to keep up with escalating expenses. He elaborated that the top 1% of earners have significantly benefited from increasing asset prices, while the majority have been left behind.
Krueger noted that this trend is not confined to the United States, as Europe faces similar issues with slower wage growth and comparable cost increases.
He also dismissed arguments that inflation-adjusted numbers or improved product quality justify the sharp rise in prices.
Bitcoin as an Inflation Hedge
Krueger suggested Bitcoin as a possible solution to fight inflation and maintain purchasing power. He compared Bitcoin to traditional inflation hedges like gold and the S&P 500, both of which have seen substantial gains over the past five decades.
Despite this, Krueger expressed confidence in Bitcoin’s future performance. He highlighted its decentralized nature and limited supply as advantages over traditional assets, stating, “Bitcoin offers a superior hedge against inflation.”
Preserving Wealth in a New Era
While acknowledging gold’s long-standing role as a store of value, Krueger positioned Bitcoin as a contemporary alternative. Despite its relatively short history (it was introduced in 2009), he argued that Bitcoin’s characteristics make it well-equipped to tackle the challenges posed by inflation in the current economy.
