Turbo printing – The massive monetary stimulus from central banks across the globe are already scary to see. But that does not yet seem sufficient for Jerome H. Powell, the chairman of the Federal Reserve of the United States (Fed). This explosive situation could make Bitcoin, the currency par excellence.
Always more freshly printed dollars
According to an article in the Financial Times, Jerome Powell, chairman of the Fed, is a strong supporter of a US fiscal stimulus on an even larger scale than what currently exists.
A new economic bailout worth around $ 2 trillion is in fact being debated between elected Republican and Democratic Congressmen.
“If the federal government delivered “too little assist” to the restoration, it might carry “pointless hardship” bitcoin dice“Against this, the dangers of overdoing it appear, for now, to be smaller,” he added.
In summary, Powell is more concerned about the risk of an economic recession in the United States than the hyperinflation and devaluation of the dollar that all of these monetary policies could cause.
And he’s not the only central banker pushing politicians to press the printing press button even harder. Eric Rosengren, chairman of the Boston branch of the Fed, said:
“We undoubtedly want it and the earlier that we get vital fiscal stimulus, the higher,”
Bitcoin, the future of post-fiat money?
Earlier this year in March we wrote a post about the reason why bitcoin is the money of the future.
The fact that bitcoin currently serves primarily as a store of value rather than a medium of exchange gives it digital gold status. It is a form of gold which has 2 major advantages over physical gold. Bitcoin is obviously much more transportable, but it is also technologically scalable.
The era of fiat currencies – which began in 1971 and based solely on trust in issuing states – were to perish, notably because of uncontrolled inflation. Bitcoin might become an essential solution because bitcoin is unique, it’s intangible, decentralized, and almost impossible to confiscate (without taking control of the associated private keys).
No one knows where exactly current monetary policies are leading us. But when some look back – from the Weimar Republic to the most recent cases of Zimbabwe and Venezuela, it is the specter of inflationary drifts that they see looming on the horizon. What real impact will monetary policies conducted in times of Covid-19 have in the future?