If the Money’s Free, Does The Price Really Matter?

Share this story:

Unprecedented monetary and fiscal stimulus have created a unique situation where the the distinction between government debt and cash money are becoming less apparent. How could this impact our view on what money is and what does that mean for cryptocurrencies?

Patrick Tan
Aug 8 . 8 min read

We’ve Broken Up With Money

And as the world enters a new epoch in our relationship with money, unprecedented fiscal and monetary policies adopted by central banks to bolster economies battered by the coronavirus pandemic, are recasting the complexion of the entire global financial system.

Paying Your Own Way, Literally

Combined, the central banks of Japan, the U.S., United Kingdom and the European Union would have created new reserves of money worth some US$3.7 trillion, much of which is being used to buy government debt, meaning that central banks are essentially paying for stimulus using newly printed money.

What you blowing up?

The absence of upward pressure on prices in the developed world means that there is no immediate need to slow the growth of central bank balance sheets or to raise short-term interest rates from near-zero.

Whose bank is it anyway?

Whereas in the past, commercial banks lay at the center of the financial universe, having to be savvy enough to determine who was creditworthy or not, now central banks have taken on that role and because the money is “free” (they just need to print it), the pressure to be circumspect is dramatically reduced.

Make it rain, why not? (Photo by Viacheslav Bublyk on Unsplash)

Read More

All provided materials and tools are for entertainment purposes only and should never be considered financial advice. Crypto News 19 will not take any responsibility for lost funds based on investments/trades made on information found here or any linking website/affiliate. This includes all social media posts and all other communications occurring under the name Crypto News 19. You should always seek professional advice before making any investment or trade.