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Flying to Cairo tomorrow to visit friends and family, where I will be until shortly before Pacific Bitcoin.

I have a small wad of cash from last time which I will be bringing with me, that is now worth a lot less than last time I was there.

At the start of 2022, the exchange rate to the US dollar was 15 to 1. When I was there, the exchange rate was in the 20s, since the Egyptian central bank was in the process of devaluing it (at the behest of the IMF). Now it’s over 30 to 1, so these are all seven dollar bills basically.

My friends and family, whose wages are denominated in pounds, all got wage increases since the start of 2022, but they certainly didn’t get 100% wage increases, and so all of them earn fewer dollar-equivalents per hour thanks to this devaluation (which among other reasons is why the IMF wanted Egypt to do it).

Capt Stab 2y ago

Linking labour to something tangible is key to anyone understanding the inflation problem.

An effective analogy I use is qualified trades and linking their apprentice wage say $10 p/hr to the price of a beer at that time, $2.50 a beer.

Now fast forward 10 years, was the sweat and effort back then any less difficult than today? Answer is No. Wages are now $40p/hr and beers $10.

So you got paid 4 x beers per hour as an apprentice, but now that “work/sweat” only buys one beer….. what happened? Where did the the other three beers go? 🍺🍺🍺 💰

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