They’re Lying to You About Inflation and Bitcoin Proves It

0:00This video is about how Bitcoin exposes the biggest lie you've been told about inflation. And what they don't want you to know about who's really getting rich from it. Personally, I truly cannot believe the number of people who believe we must have inflation for a functioning economy. I put out Bitcoin content, so I get these comments all the time. Number one, they say 2% inflation is required for a functioning economy. As if no economy functioned before the existence of central banking, I guess they forget about that. But number two, they say inflation is not a big deal because wages rise with the cost of living, so it all evens out and everybody's fine in the end. Well, I'm gonna debunk that number one claim more in depth in another video soon, but today we're debunking number two. Inflation is not a big deal because wages keep up with the cost of living. This video is gonna unpack the lies that underpin that statement. But more than that, I'm gonna tell you why even if it is true, even if wages do keep up with the increased cost of living,

1:00inflation is still the greatest theft of all time, robbing you and your family of the ability to build wealth and become better off in the future. We're about to get into that, but real quick, you're watching The Sad Stacker Show, a Bitcoin show for people who think deeper about money. I'm your host, my name is John aka The Sad Stacker, so if you're interested in learning to stack smarter and grow your conviction in Bitcoin, hit the subscribe button, and let's let the sad out of the bag. So we all know we've grown up in a world with normalized inflation. We don't really bat an eye at the idea that a Coke cost about a nickel for 75 years until sometime in the 50s, and it came in a bottle and it was made with real cane sugar. And now today, it costs like 20 times more than that, comes in an aluminum can and it's made with high-fructose corn syrup. You can still get the real sugar one in the bottle, but for some reason it's called Mexican Coke and it costs like 50 times the original five cent price. So inflation is just a part of life that we all accept, prices rise over time. We just assume it's the natural order, the natural way of all things. And of course, I hope everybody realizes

2:00that price inflation is wage deflation. So you need that 2% raise every year or you are officially getting poorer. And that's just the way it is. Of course, never forget that that's not actually the way it always was. That's a policy choice. It's the result of buying into one particular economic theory, but it is not a thermodynamic law of the universe. It's not an absolutely necessary fact of life. It's a choice based on economic theory, not empirical fact. But we've been told for decades that inflation is a good thing for the overall economy. Not only that, that without it, the economy would apparently completely collapse. And of course, it's fine for individuals because wages rise with inflation. So everything is hunky-dory. Well, when I use data for these things, I like to peg it to 1971. When we temporarily went off the gold standard for this one in particular, there isn't great data on real wages starting in 1971, so we'll use 1980. So if you take the data from 1980 to today, it appears to be true.

3:01Real wages adjusted for CPI are roughly flat or basically up about 0.3% per year. So according to that metric, your cost of living is dropping a tiny bit each year. And you're getting a little bit better off. And you tell me, does that feel true to you? Somehow, I doubt it. One way to say it is that $100 in 1980, but the same amount of goods and services that $27 buys today. Another way of putting it is that you need $374 today to buy you what $100 could have bought in 1980. But CPI, just the data, will basically tell you that you have the $374 today. So it's all good. Doesn't matter if that stuff costs more. I've done another video in the past on the manipulated lie that is CPI. I'll put that video right here. You can watch that if you're interested in learning a little more about it. But suffice it to say, CPI is designed to under-report real inflation. Substitution effects, hedonic adjustments, waiting changes, owner equivalent rent, et cetera, et cetera.

4:04The Fed has about 20,000 employees on staff, hundreds of them PhD economists coming up with all kinds of ways to make sure that the CPI number stays artificially low. But I was thinking about a way to quantify this and make it feel real. So let's put it this way. If you actually lived your life, the way CPI assumes that consumers do, your life would look completely ridiculous. Basically, when you rent doubles, you would move into an apartment that's half as big, and you would say that your cost of living was the same. When steak got too expensive, you'd switch to Cantuna, when eggs, double, and price, you'd just eat more cereal, and when your car costs more, you'd pay it, but tell yourself that it's cheaper because now it has Bluetooth. That is literally what CPI assumes consumers are doing, and they call that stable prices. In other words, whatever gaslighting and econometric voodoo it takes to under-report actual price increases. So CPI inflation since 1980 is about 3.7% per year, which means the price level overall is up about 4x total.

5:06Nominal wages since 1980 are up about 4% per year, so they roughly increase at the same pace, or like we said, a little more. Therefore, real wages after CPI adjustment are flatter up a tiny little bit. But let's cut to the meat of the real issue that's happening here, because something strange is going on when you dig deeper into the numbers. For example, the M2 money supply in the US has grown by about 14x since 1980, and the federal debt, by the way, has grown by about 40x, which is over 8% per year. So government spending has exploded, and there's a whole bunch of new money in the system that wasn't there before, but the overall price level that consumers experience only went up by about 4x. So there's a strange magic trick going on. Prices didn't go up by 14x, and that's a good thing. Wages went up by about 4x2 to offset the price increase, but all that extra newly printed money, if it didn't go into consumer prices and it didn't go into wages, where did it go? Well, now we're about to see what the magician does not want you to see, because your 2% raise

6:10or your nominal growing salary is the attractive magician's assistant over here in the skimpy outfit who's trying to distract you from wherever the real trick is happening, because while the magician was waving a 2% raise in your face over here, they were pumping the majority of that newly printed money into assets. You see, the idea of maintaining your cost of living is just about not getting poor in destitute over time, but assets are how you get ahead. Assets are how you build wealth, and they're how the rich get richer, and the 1% become the point 1%. The cancel on effect is the term for how the rich and powerful benefit from access to cheap debt and newly printed money, because they use it to buy up assets before the full effects of inflation show up in the rest of the economy. The real culprit that exacerbates wealth inequality and robs the poor in middle class of the chance to actually get ahead is asset inflation. That discrepancy between how much money entered the system

7:11and why the general price level didn't rise too high is because the money is in the assets. Inflation is dilution, because the share of money you hold or earn is becoming a smaller and smaller piece of the overall pie. But make no mistake that the pie itself is expanding, and your piece, even if it's getting bigger, it's doing so at a much slower rate than the overall expansion of the pie. That means someone else's share is getting disproportionately larger at an exponential rate compared to yours. This is the number one thing I want you to understand and take away from this video. Even if you're getting a 2% raise every year, you are still getting poorer in relative terms if they're expanding the money supply much faster than that. And you are unequivocally being stolen from because that money is going to someone who's not you. The median worker's income since 1980 has lost two thirds of its claim on the total money supply.

8:11That's the real reason the wealth inequality has exploded. CPI deliberately hides this by focusing on some arbitrary basket of goods, but excluding the expansion of financial assets and credit. So for example, the cost of the median home since 1980 has gone up by about 6.7 times, and the cost of a share of the S&P 500 has gone up 47 times. So in 1980, the median home cost about three years of median income, and today it's over five years of median income. And in 1980, a share of the S&P cost 19 hours of median work. And in 2025, it's 230 hours of median work. That's six weeks of work. 12 times the amount of work it took in 1980 to buy one share of the S&P 500. And I know that a lot of people like to retort. Well, if you just bought a house or if you just bought the S&P, then you benefited from it. Yeah, that's literally the point. Everyone who was priced out or left out or just plain not even alive yet got completely screwed. For the record, direct ownership of S&P 500 index funds

9:14was basically negligible amongst retail in 1980, since they were brand new and mostly institutional. And S&P index fund wasn't even available for everyday investors until 1976. And the spy ETF that everyone today essentially equates with the S&P 500 didn't launch until 1993. And of course, that's just talking about Americans while the rest of the world had of course, no shot at accessing it and probably lived under a much worse currency regime. To some degree, a result of the fact that America gutted our industrial and manufacturing base and made our biggest export inflation. I think I'll do another video soon to explain that concept too. So subscribe to the channel and look out for that one. But we have trillions of dollars of new money injected into the system, the vast majority of it, not ending up in wages for the average person, but if that's not enough of a kick in the teeth, here's where it gets even worse. It's not just that the money supply grew by 14 times and all that new money went into assets instead of wages. It's that over that same time period,

10:15worker productivity more than doubled up about 120 to 130%. We built the internet, we automated entire industries, we invented smartphones, cloud computing, robotics, AI, the mobile wave, we literally reshaped civilization and the economy as we know it. And yet median real wages barely budged. So one of supposedly the most productive periods in history and real wages for everyday people are flat. That right there by itself should be another red flag for you that something's not right with this system. Because even if nominal wages are up, it still means that virtually none of those real productivity gains trickle down to the average person in the form of higher real wages or lower overall prices. That productivity boom should have meant everything got cheaper and your paycheck went further, but more every year, regardless of whether it went up in nominal terms or not. But under a fiat system of ever expanding credit and debt,

11:16the actual benefits from those productivity gains are slightly redirected from you and funneled to the very tippy top to be captured by those closest to the money printer. The productivity gains did happen but inflation redirects where they end up. Instead of showing up as falling prices and more freedom for everyone, they show up as rising asset prices and more wealth concentration. This is a lot of information. So I'm gonna lay the whole process out one more time so it's clear as day. In a sound money system, increased productivity causes prices to fall naturally. Yes, that is deflation. And no, it's not a bad thing. Just imagine a world where prices are falling and your paycheck goes further. Does that feel like a bad thing for you in your life? No, I didn't think so. So if inflation is more money chasing the same amount of goods and services, price deflation is the same amount of money chasing more abundance in goods and services. The money is worth more as prices fall. Your paycheck would buy more every year, even if your wages technically nominally stayed the same.

12:19The reward for working and saving compounds automatically. Everyone shares in the benefits of innovation through lowering prices. But in the fiat system, the government and banks constantly expand the money supply. That new money doesn't enter the economy evenly. It's not like here's your quarterly check of new money we printed, your portion of QE. No, of course not. It enters through very specific controlled channels first like banks and corporations and governments. Those closest to the money printer can spend the new money before prices rise while everyone else feels the effects later. So instead of prices falling as productivity improves, that new money keeps prices rising no matter what. They print to avoid deflation, which means they print to make sure prices never go down. No matter how much real productivity is gained, the inflation cancels out all natural price deflation that productivity should have delivered. Of course assets like stocks and real estate rise first because cheap credit floods the market and asset wealth compounds far faster than wages.

13:22The top roughly 10% who own 90% of financial assets capture almost all of this new value. Corporations can borrow cheaply, buy back shares, expand margins, rather than raising wages. This means record profits that benefit insiders and shareholders, but still stagnant paychecks. Governments and banks spend new money while its purchasing power is still high, effectively dumping on everyone else through the inflation that shows up later. Meanwhile, the middle class loses purchasing power, the poor lose savings value entirely as their cash buys less every year, and the gap between wages and asset prices just keeps widening. So since 1980, we saw productivity per worker up about 120%, and to money supply up about 1,300%, S&P 500 up about 4,700%, real wages, basically flat. So the productivity gains that did happen just showed up in the rising asset prices and more wealth concentration. The inflation tax took away what the productivity revolution should have given to you.

14:25The problem is not that we don't create enough value, it's that the system keeps stealing it before it reaches you. The money itself is the leak in the bucket, which is why Bitcoin matters, not because Bitcoin is an investment, but because Bitcoin is a repair to the broken system. This is why Bitcoiners say we need a money that doesn't steal from you, a money that doesn't cheat your time, a fairer system at the base layer, where no one can inflate the supply to enrich themselves at the expense of everyone else. Where no amount of lies about prices and wages can let them steal from you while you're not looking, and where no matter how much the magician tries to distract you, he can't pull the magic trick of enriching himself and his friends at your expense. Bitcoin is the first money in history that truly levels the playing field. Everyone plays by the same rules. No wonder they hate it so damn much. Under Fiat, productivity gains get stolen from the workers and funneled to the top. Under Bitcoin, productivity gains flow directly

15:27to everyone in the form of falling prices. Every worker and saver gets wealthier in real terms as their time, effort, and money get more valuable. As Jeff Booth says, eight billion people working for eight billion people. Bitcoin represents a world where you can actually keep what you earn instead of having to go further out on the risk curve and earn it again in the form of picking the right investments. Bitcoin represents a world where progress lifts everyone and the money finally tells the truth. So I just want you to remember that when somebody says inflation is not a big deal because wages keep up with the rising cost of living, they are not only going out of their way to believe a lie, they're going out of their way to miss the real theft that's going on under the surface. It's not just that your dollar buys less. That in and of itself, by the way, in my opinion, it should just be enough for this to be outrageous. But the even bigger problem is that no matter how much more productive we get, the gains are always stolen from us. Working your whole life to earn a broken money means that best case scenario,

16:28your cost of living just treads water. Decade after decade, we get more productive, but your chances of getting ahead get worse and worse. While the system is literally designed to redirect the real gains and the fake printed money gains to those at the tippy top, but under Bitcoin productivity actually makes your life better. Prices fall, savings grow, your freedom expands, and everyone is forced to play by the same rules. Can't be printed, manipulated, or weaponized against you. It rewards productivity and not proximity to power. It does what real money is supposed to do, which is restore the connection between hard work and real wealth building. Somebody asked me in my comments the other day, is there an argument that could make you change your mind about Bitcoin? And my response was, well, here's the problem. I've tried. I've tried to steal man every argument for Bitcoin. I've tried to examine every argument against Bitcoin. I've tried to examine every argument for Fiat. But every time I do that, I just come out of it with greater conviction in Bitcoin and greater hatred for Fiat.

17:29So if you like me at all, leave a comment telling me why you don't want to live in a world without Bitcoin. Subscribe to the channel and watch another one of my videos right here to learn to stack smarter and grow your conviction in Bitcoin. And as always, you never forget quitslacking and start stacking. Stacking. Quitslacking and start stacking. Quitslacking and start stacking. Quitslacking and start stacking. Quitslacking and start stacking. Quitslacking and start stacking. Quitslacking and start stacking. Quitslacking and start stacking. Quitslacking and start stacking.