Two Numbers To Start
When the Jamaican dollar was born in September 1969, it was worth more than the US dollar. JMD 0.77 bought you US$1. Stronger than the dollar from the day it dropped.
Today it takes about JMD 160 to buy that same US$1.
Same island. Same currency name. One Jamaica dollar from 1969 now buys less than half a percent of what it bought then. That is not a market crash. Nobody woke up one morning to a headline. It was a quiet bleed, year after year, decade after decade, and if yuh are under 50 yuh have never known the other version.
What Inflation Actually Is
There is a lesson series going around right now, Jack Mallers breaking inflation down from first principles, and the core of it is simple enough to hang on a market stall. Inflation is not prices rising. Inflation is money shrinking. The bread did not get more expensive. The money got weaker, and the bread is just reporting the news.
New money enters the system through specific doors. Government spending. Bank credit. The people standing closest to those doors, the ones who get the new money first, get to spend it at old prices. The people far from the doors, salary earners, pensioners, the woman selling in Coronation Market, get the new money last, after prices have already moved. Inflation is uneven by design. It is a transfer from the far-from-the-door to the close-to-the-door, and it runs every single year whether anybody votes on it or not.
Mainstream economics calls a little of it healthy. From a Jamaican vantage point, that claim is not hard to argue with.
Jamaica's Report Card
The record is public. Pick years at random from the Worlddata series:
- 1973: 17.7 percent
- 1980: 18.0 percent
- 1985: 29.7 percent
- 1991: 51.0 percent
- 1992: 77.3 percent
- 1995: 19.9 percent
Seventy-seven percent in a single year. In 1992, something that cost JMD 100 on January 1 cost JMD 177 by December. Savings accounts did not come close to keeping up. A pension set in 1985 was worth roughly a third of its starting power by the mid-90s. The Jamaican dollar fell from JMD 0.77 to the US dollar at birth to around JMD 160 today, and the sharpest drops line up exactly with those inflation years, the early 1990s above all.
Here is the part that matters for anybody who lived it or heard their parents talk about it. The 1970s into the 90s were not one event. It was a sequence. Devaluations to help sectors, IMF programs, the oil shocks, elections, more devaluations. Each one had a reason attached. Each reason sounded reasonable at the time. The cumulative effect was that a generation of Jamaican savings was quietly cut down, and the people it hurt the most were the ones with the least ability to move their money somewhere the bleed could not reach.
Who Got the New Money First
The first-receiver mechanics map onto the Jamaican experience without any stretching.
When the government spends new money into the economy, or the banks expand credit, the first hands are contractors, suppliers, close interests, people with access and leverage. They spend at today's prices. By the time that money has filtered through the system to the taxi man, the teacher, the grandmother in the savings account at the corner bank, the prices have already adjusted upward and the purchasing power is gone. The Cantillon effect, economists call it, after an 18th century French banker who noticed the same thing. In Jamaica you can date it. Check who was borrowing and building in Kingston in the late 80s and early 90s, and check what the fixed deposit at the credit union was worth by 1995.
This is why there is no single "inflation rate." The statistical average hides the person at the market stall. Food inflation runs hotter than the headline when you spend most of your income on food, and the basket the statisticians measure is not the basket a Jamaican household actually carries.
The Hard Money Alternative
The Bitcoin argument, the one this blog keeps coming back to, is not that a magic internet coin will fix everything. It is narrower and colder than that. Bitcoin's supply cannot be expanded by anybody's decision. Not a minister of finance, not a central bank governor, not an IMF program, not an election year. Twenty-one million, on a schedule set in code, enforced by a network nobody owns.
That means the quiet bleed does not have a door. There is no first receiver of new Bitcoin because there is no new Bitcoin beyond the mining schedule, which is known to the satoshi and shrinking every four years. A Jamaican holding BTC does not need the currency to be well managed, the government to be disciplined, or the IMF to be kind. The savings is simply outside the blast radius.
It swings, and the swings are loud. Bitcoin will drop 30 percent in a month sometimes, and that hurts. But in 1991 the JMD lost 44 percent of its dollar value in a year, and 1992 took another 42 percent, and there was no chart turning red on anybody's phone, because there was no price for it in the first place. You just noticed the grocery bill. The loud volatility gets the headlines. The quiet bleed gets the pension.
What This Is Not
This is not a knock on Jamaica's institutions doing better in recent years. Inflation has run in single digits since the mid-2000s and the BOJ's targets have been broadly hit. That is real progress, and it should be said plainly. But the argument for hard money was never about any one decade's management. It is that the door exists. Progress can slow the bleed. Nothing in the current system removes the door, because the door is the system. The 1990s happened under the same constitution and the same currency that runs today, and the generation that trusted the fixed deposit paid for it.
The Lesson, Yardman Style
Jack's lessons are aimed at an American audience, but they land here even harder, because Jamaica already ran the experiment. We do not need his 1970 cost of living comparison. We have our own. Ask any elder what a tin of milk cost when the dollar was born, then check the shelf price, then divide.
Inflation is not weather. It is not something that happens to a country. It is a policy outcome, one transfer at a time, from people who cannot defend themselves to people who designed the arrangement. The defense, for the first time in monetary history, is available to anybody with a phone and a few thousand sats. That is the whole revolution. Not the price chart. The door, closed.
Next in the series: why Bitcoin's loud volatility and the JMD's quiet bleed are not the same kind of risk at all.