SpyMasterTrades on Nostr: In 2024, the #Fed will be faced with a Catch-22. It will need to pivot and ease ...
In 2024, the #Fed will be faced with a Catch-22.
It will need to pivot and ease monetary conditions and cut rates as #liquidity issues mount and growth slows. But simultaneously, it will also need to keep monetary conditions tight and rates high as inflationary pressures resurge. With the general election ahead, political pressure will mount on the central #bank to curtail the high inflation that it caused by creating excessive amounts of new fiat currency.
One thing is for certain: The central bank will continue to underreport #inflation (see chart).
The situation will get much worse in the years and decades ahead as public debt exceeds total #GDP by more and more. Interest payments alone will begin to take up much of the budget and central banks will increasingly turn to fiat currency creation to finance the debt, which is inflationary. De-dollarization and the abandonment of #Treasury bonds as a risk-free asset will further accelerate inflation.
Ultimately, #Bitcoin will become the global risk-free asset because of its immutable scarcity and its status as a fully auditable public ledger that is incorruptible. Rather than try to fight Bitcoin, central banks ought to embrace Bitcoin since it will ultimately solve the problems that they created.
All fiat currencies have ended in hyperinflation, and this time will be no different.
It will need to pivot and ease monetary conditions and cut rates as #liquidity issues mount and growth slows. But simultaneously, it will also need to keep monetary conditions tight and rates high as inflationary pressures resurge. With the general election ahead, political pressure will mount on the central #bank to curtail the high inflation that it caused by creating excessive amounts of new fiat currency.
One thing is for certain: The central bank will continue to underreport #inflation (see chart).
The situation will get much worse in the years and decades ahead as public debt exceeds total #GDP by more and more. Interest payments alone will begin to take up much of the budget and central banks will increasingly turn to fiat currency creation to finance the debt, which is inflationary. De-dollarization and the abandonment of #Treasury bonds as a risk-free asset will further accelerate inflation.
Ultimately, #Bitcoin will become the global risk-free asset because of its immutable scarcity and its status as a fully auditable public ledger that is incorruptible. Rather than try to fight Bitcoin, central banks ought to embrace Bitcoin since it will ultimately solve the problems that they created.
All fiat currencies have ended in hyperinflation, and this time will be no different.