Posted 2 years ago | by Ben Armstrong
Diginex CEO Says Technological Progress is Deflationary – But Inflation Might Be Coming
Diginex CEO Richard Byworth says that technical advances might not save people money as expected, due to the inflationary ideas of central banks and governments.
In a recent conversation with media, Byworth stated that "Technology is just so deflationary on many of our goods and services." Diginex business’s core strategy is to develop a platform for crypto and blockchain solutions.
Diginex CEO Sees a Complex Economic Picture
Byworth recalled that decades ago, CDs were sold at about $25 dollars. Today, in a matter of seconds, customers can purchase new iTunes songs for around $10 to $12 - less than half the price seen when CDs were popular – even including the inflation that many items have seen in recent years.
Technology, along with multimedia development, has helped us solve the cost problems of production while increasing productivity. This deflationary effect of technology is also applicable to several other categories – although it is more complex.
Food, infrastructure and other commodities and services have seen significant improvements in technology, which has effectively reduced the manufacturing costs. However, there are other factors that keep people from seeing these gains in efficiency in from a price perspective.
The crisis of 2008 was the dawn of crypto – and after that event, Byworth began to enter the crypto space to secure his money from inflation.
More Inflationary Ideas are On The Way
Monetary devaluation concerns increased significantly in 2020 – mainly due to the wild ideas coming out of central banks and governments.
Byworth described the situation in these terms,
"It's gotten to a point of being frightening...If you look at a trend line of monetary expansion over the last 40 years, and then it's a fairly steady line until you hit about 2008. Then the gradient just increases. It gets much steeper, and then suddenly, in April of this year, you have a straight line up that is an increase of 25% on the entire increase that you've seen over that 40-year period — you've seen that in four months."
The U.S. central bank takes the Consumer Price Index ( CPI) into consideration when assessing its inflationary objectives. The index basically shows the cost of common goods paid by an ordinary individual based on a variety of goods and services compiled into one number.
Byworth pointed out that,
"Having that CPI target is really just a distraction...They are never going to be able to get that CPI meaningfully higher unless they lose control of the money itself...Effectively these central banks are fighting to get to a 2% number on a basket of goods that is very deflationary."
Inflation makes it easy for governments to deal with debt – "The U.S. government has a gigantic amount of debt, so if the money is worthless, then the debt is worthless...This is the game that everybody is playing, and that inflation and monetary base really means that the only way to protect your value and your wealth is through sticking it in high value assets — so assets that people are going to fight for," he stated.
While a central bank tries to control inflation, Bitcoin appears to become the perfect hedge for any institutional portfolio against the negative effects central planning, according to the Diginex CEO.
"This is why Bitcoin is going to continue to be more heavily and heavily demanded.”
Articles on Bitboy may contain affiliate links that help us to remain profitable. It might come as a surprise, but all these great articles aren’t cheap to produce. If you don’t mind helping us out, please click on the links!