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The Hidden Costs of Bad Money

GM Bitcoiners,

‘FREE!’ used to mean something in an offer, but now it’s often associated with scams or low quality.

We’ve all realised that ‘free’ doesn’t equal good, and ‘cheap’ doesn’t equal quality. 

Something cheap will often be expensive in other ways – we’ve come to expect this now. If I receive a quote for some building work, I’ll be more suspicious if it seems too cheap and will assume (often correctly) that shortcuts will be taken. 

Everything has hidden costs. 

And bad money is especially expensive… eventually the hidden costs become apparent. 

Here are the layers of hidden costs that come from cheap money in the fiat monetary system…


It all starts with a centralised monetary system with a supply that cannot be trusted. This once-hidden tax has become all too familiar recently, even in western countries. Continuously expanding the monetary supply dilutes the value over time as the newly created money becomes worth less and less, and those holding the existing supply lose their purchasing power much faster.

When money loses its purchasing power, what will people do? 

Poorer people see less value in saving because the money loses buying power faster than any interest that might come from a ‘savers account’, so they are encouraged to spend NOW while the money carries more value. As goods that require real ‘work’ become more expensive, they cannot even afford to save.

Buy goods today before the price goes up tomorrow.

This leads to people consuming far more than they typically would, and the quality of many items and food choices are considerably lowered to provide everyone with cheap goods. 

People eat more junk food… which has a cost. 

Good food becomes more expensive and is often demonised (meat) because it’s hard to hide the costs of producing nutritious food vs a carb/sugar-filled meal. 

The money isn’t made to last, so neither are the goods.

When people don’t have money for tomorrow, they only think about today. When you only think about today, you’re far less concerned about ‘worldly issues’.

And for more well-off people? They are also not encouraged to hold cash, so they buy assets with real long-term value… like houses. Which, in turn, prices out those at the bottom and widens the wealth gap even more. 

So far, we have less long-term safety for the regular Joe, which leads to the consumption of poorly produced goods which leads to both pollution/waste and a health crisis.

This is just the tip of the iceberg…

“Fix the money, fix the world” suddenly seems less crazy. 

Written by Henry

Content Manager at FastBitcoins. Came to Bitcoin for the sound money... stayed for the memes! When not on Bitcoin Twitter, Henry can be found dancing Argentine Tango or in the gym.

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