The Silent Erosion of Your Wealth
Imagine walking into a grocery store with R1,000 just a couple of years ago. You could fill up a trolley—meat, produce, snacks, even some household goods. Fast forward to today, and that same R1,000 just covers the essentials. You’re not imagining things—your money is losing value, and it’s happening quietly, year after year.
According to Business Tech Insider In 1995, a typical middle-income South African grocery basket consisting of 15 staple items cost R82.68. Fast-forward nearly three decades, and that same basket now costs R644.85. This is a staggering increase of 680%, far outpacing the global average of 384% in the same time period.
This phenomenon is called inflation, and it’s one of the most misunderstood forces in our economy. Inflation doesn’t mean your money disappears—it just means it buys less. Your purchasing power—the real value of what your money can get you—is shrinking.
When prices across the board fall, we call it deflation. But the opposite is far more common—and far more dangerous. Inflation happens when there’s more money in circulation but no meaningful increase in the goods and services available. The supply of money goes up, but demand stays the same. The result? The value of money drops. It now takes more money to buy the same things.
And while a few percentage points each year may not seem like much, the effects compound over time. What feels like a minor increase in prices becomes a major decline in your financial stability if you’re not positioned to protect against it.
What causes inflation?
Inflation is often presented as a complicated issue, but the concept at its core is quite straightforward. There are a number of contributing factors that influence inflation, and economists generally refer to three major ones.
The first is called demand-pull inflation, which occurs when demand for goods and services outpaces the economy’s ability to produce them. If there’s a surge in consumer spending but the supply of products doesn’t increase at the same pace, prices begin to rise. In simple terms, too much money chasing too few goods leads to inflation.
Then there’s cost-push inflation, which happens when the cost of producing goods increases—whether that’s due to higher wages, rising fuel prices, or more expensive raw materials. These increased production costs are passed down the chain to consumers in the form of higher prices.
Lastly, inflation expectations play a role. If people believe prices will rise in the future, they adjust their behavior accordingly—employees demand higher wages, businesses raise prices preemptively, and consumers start spending sooner rather than later. Ironically, these expectations can help create the very inflation people are trying to prepare for.
While each of these factors contributes to inflation in their own way, the most significant and consistent driver—especially over the long term—is far simpler: government spending. More specifically, when governments inject large amounts of money into the economy without a corresponding increase in productivity or output, the value of money starts to decline.
Renowned economist Milton Friedman famously described inflation as being “always and everywhere a monetary phenomenon.” In his view, it isn’t consumers or corporations that drive inflation—it’s the state. When a government prints more money than the economy can absorb, it reduces the purchasing power of its currency. The outcome is clear: people need more money to buy the same things they used to, and that’s the essence of inflation.
In a now-iconic interview, Friedman drives this point home, explaining that inflation is not caused by greed or sudden demand surges. Instead, it stems from policymakers who spend and print excessively, often in the name of economic stimulus or short-term relief. You can watch that interview below, and it’s just as relevant today as it was when first recorded.
Over the past few years, we’ve seen this dynamic play out in real-time. In response to global financial pressures, governments—including our own—have drastically increased money supply. The cost? Rising food prices, shrinking paycheques, and eroded savings.
In the next section, we’ll explore how to protect yourself from this silent wealth drain—and why Bitcoin, with its fixed supply, is gaining serious credibility as a hedge against inflation.
Money Printer Go BRRR
At first glance, the “Money Printer Go Brrr” meme seems like harmless internet humour—just another joke born out of the chaos of the pandemic. It features U.S. Federal Reserve Chairman Jerome Powell, cartoonishly firing off cash from a printing press as if it’s the solution to every economic problem. But behind the meme is a hard truth about modern monetary policy: governments are printing money at unprecedented levels, and that has real consequences for everyday people.
The idea behind the meme is rooted in a policy called Quantitative Easing (QE). This is where central banks, like the U.S. Federal Reserve, inject money into the economy by purchasing government bonds and other financial assets. The goal is to increase liquidity, lower interest rates, and stimulate spending during periods of economic slowdown. On paper, QE is meant to encourage borrowing, boost consumer confidence, and spark investment. And during times of crisis—like the 2008 financial crash or the COVID-19 pandemic—it can provide short-term relief.
But here’s the catch, printing money doesn’t create value. It creates more currency units chasing the same amount of goods and services, which inevitably leads to inflation. Prices rise, not because things are becoming more valuable, but because your money is becoming less valuable. This is the key insight captured in the meme. When the “money printer goes brrr,” it sounds efficient, maybe even necessary—but what it’s really doing is diluting your purchasing power.
And this isn’t theoretical. In March 2020, the U.S. Federal Reserve slashed interest rates to near zero and announced it would purchase $700 billion in bonds and mortgage-backed securities to “support the economy” through the pandemic. What followed was a stock market boom, a crypto surge, and eventually, one of the highest inflation spikes in decades. In June 2022, U.S. inflation hit 9.1%—the highest in over 30 years.
While QE may help financial markets in the short term, it often has damaging long-term effects for the real economy. And when inflation gets out of control, central banks are forced to raise interest rates aggressively to cool things down, which can lead to economic slowdowns or even recessions. This push and pull—first print money to grow, then hike rates to contain inflation—is a cycle we’ve seen play out repeatedly.
The lesson here is simple, money printing has consequences. It may look like a quick fix, but it’s a dangerous game. The meme may have made us laugh, but the reality behind it is anything but funny. If you’re feeling like your money doesn’t stretch as far as it used to, it’s not just your imagination. It’s policy—and it’s the inevitable result of a system built on short-term relief at the cost of long-term stability.
