Hello from Europe!
It’s family summer travel time!
We were visiting Carol’s family in Florence last week and what an absolutely gem of city that place is.
And getting the behind-the-scenes, local tour by her cousin and aunt was priceless.
We then headed off to Rome to meet up with our daughter who was taking a month long Grade 12 high-school English class… traveling across 5 European countries in 4 weeks.
We have this family tradition of doing walking food tours in every city we visit.
The one in Rome involved having some of the best sorbet I’ve ever had in my life. That’s me enjoying the handmade chocolate and strawberry sorbetto.
The Florence tour involved visiting a local, off-the-beaten path wine bar where locals would drop in for a quick glass of wine before heading back to work.
We crossed paths with an Opera singer, a painter, two leather shop owners, and the winemaker himself.
The conversations we all had about the local Florence gossip was hilarious.
Apparently, a very popular barista moved from one cafe to a competitor down the street…huge news!! A travesty even!
And whether it was in Rome or Florence the same topic kept coming up.
The price of food, gas, education, beach houses and just about everything just keeps going up and up and up.
But I found that because of their history here they have a slightly different take on it than Canadians.
They are much more in tune with the concepts of inflation and loss of purchasing power than Canadians are.
Between 1999 and 2002, the Italian Lira was replaced by the Euro and Carol’s family was explaining that their local purchasing power got cut down badly.
Their Italian Lira died and prices went up.
In Florence, people could no longer afford to hold onto their properties in the city and sold them to fund their lives.
Many of them regret having to do it as those properties are now worth millions of dollars.
The wealth transferred to those who held the assets.
And it continues right now…
During the pandemic, a very wealthy Italian designer family that we’re sworn to secrecy over naming, bought 200 more apartments in the city centre of Florence.
We took a quick Instagram video on this topic that you can check out by clicking right here: www.instagram.com/p/CvXxoYVL2gM/
We just landed in Croatia and they are going through the exact same thing that the Italians went through…but this year in 2023!
They are moving from the local Croatian “Kuna” to the Euro.
And guess what?
The price of groceries is up 20%-30% this year!
Some grocery items are up 40% and on the coast, the price of fruits and vegetables is up 100%.
The money is, yet again, dying.
And the locals are “hoping” that next year is better because their incomes haven’t increased at all and they’re hoping/assuming/praying that their incomes catch up.
We are trying to explain to them…they won’t.
(Quick Aside: Did you read Noha’s email last week about the exact same problem happening in Egypt? If not you should read it, it’s fascinating and heartbreaking. Check it out right here: rockstarinnercircle.com/a-crazy-inflation-story-from-across-the-atlantic/)
Incomes never catch up to price increases.
We should know, in Canada, we’re absolute global experts at it.
So what do we mean when we say “the money is dying”?
Good money has a purpose. It holds and protects your purchasing power.
When you work and get paid, your time and your labour are exchanged for money.
That money represents your efforts.
But bad money has a problem.
It slowly dies. It leaks purchasing power.
Your time and labour are quietly, secretly, and silently stolen from you.
So each year it loses a bit, then a bit more, then a bit more.
You’ve worked hard, exchanged that work for money…but the money doesn’t hold its worth.
So prices in Florence or in Croatia or in Canada really aren’t going up…it’s the money dying, leaking purchasing power, that is occurring.
And as a result it takes more and more crappy money to buy the same things.
People think real estate and groceries are getting more valuable.
But it’s really just the money dying.
Canada is getting really good at killing its money.
Check out this chart (h/t @tablesalt13 on Twitter):
The government of Canada is issuing new bonds like mad right now.
They’re issuing approximately $40 billion every month and adding about $1.4 billion in interest expense to Canadians each and every month, LOL!
And very few talk about it.
This is adding to the Canadian dollar money supply, each and every month.
Diluting the value of your dollars, each and every month.
This weakens your family’s purchasing power, each and every month.
This causes grocery prices to “go up” in dollar terms, each and every month.
This is the money dying in real time.
Until one day everyone looks around and says “Wait, why does no one own properties right in the city of Toronto except the super wealthy?”
Exactly like the people in Florence are saying today.
To protect your purchasing power you’re either going to figure out how to hold and own good assets like income-producing properties in areas with good demand (that’s our choice but yours may be fine art, land etc, etc.).
Or you’re going to upgrade your money. We now save in Bitcoin.
We don’t hold any more dollars than we need for operating expenses. All else gets swept into Bitcoin.
To us Bitcoin is good money. It cannot be diluted. It has a fixed supply.
The ledger is protected by a global swarm of computing power.
No government can add new Bitcoin to its ledger.
That’s the beauty of it. Real, pure, sound, honest money.
And the narrative around Bitcoin is rapidly changing now that the big players like Blackrock are filing for a Bitcoin ETF.
Bitcoin has represented all of us having the opportunity to front run the big guys and gals into good money.
And that opportunity still exists.
When money dies the majority are caught off guard.
There’s a tiny minority that are prepared. Be that minority.
Study money, study assets, study Bitcoin.
Money is dying around the world right now.
Florence, Croatia, Canada, Egypt…it’s a global problem now.
But you can sidestep this mess.
And by doing so you’ll be able to live life on your terms!!
Time to get back to the sun…we’re off to the beach today and have more family arriving next week along with a couple of good friends.
Enough money talk for now…time to enjoy the summer!!
Happy August, everyone!!
Tom & Nick
p.s. Don’t forget to check out this week’s Rock Star Minutes where Rock Star Coach Tammy breaks down the cash flow numbers on a Brantford duplex: rockstarinnercircle.com/maximizing-cashflow-brantford-duplex-conversion-full-project-breakdown/