In an economy of so many bubbles, the fed money has just presented itself as the one, most likely to pop. Some key points to note in all this economic distress and internet money hate, is how inflatory the coming times are for Fiat, and how hedge-like the cryptocurrency industry presents itself. The federal reserves are clearly against a deflationary economy as though it poses some amount of threats to the central bank earning streek.
The more we look at it, the less we'd understand this fucked up model. The Fiat based economy has always turned out to be more complicated than any monetary system. The U.S. central bank has been reportedly hovering up mortgage-backed securities and Treasury bonds, buying them with newly printed dollars, which it creates at its own discretion. This, in turn placing the dollar market in a provably bubbled trend, indications to a coming times of inflation. The Fed brings to the public a weekly balance sheet which clocked yet another all time high, a whopping $8 billion more dollars were printed.
The Fed took a step which specifically, would result in massive devaluation rather than its supposed aim to curb inflation. More than 30% in M2 money supply was reported in April 2021, since January 2020. This was roughly $20.11 trillion thrown at the economy.
With certain indications, a great deal of manufactures have pick points and are all watching this unravel slowly. The downside of more dollars going after fewer products and produce is massive price spikes. Covid being a big player in this case, where most production companies had to fold up, the worries count up high and citizens are rather advised to spend their dollars sooner than later.
Consumer prices increased 5.4% in June from a year earlier, the biggest monthly gain since August 2008. reports
Excluding food and energy, inflation increased 4.5%, the largest move since September 1991.reports
Used car and truck prices comprised about one-third of the total CPI increase.reports
Crypto To The Rescue?
While the Federal Reserve is essentially skimming other people’s money and lending it out at zero interest, investors on DeFi (decentralized finance) cryptocurrency lending platforms are lending their own money for massive, sometimes double-digit annual percentage yields. Meanwhile, others are parking their savings in deflationary digital assets like Bitcoin.quote
The Fed actions may be backed by sentiment on how the inflation would be kept on watch, not moving far off an average of 2%, this is believed by them, possibly because cheap dollars would attract the FX traders, meaning foreign countries would find it sexy to buy in, but hold up, is buying up a dollar promising unlikely Stabler forms with tiny interests more fancier than the crazy yields in Defi farms and bitcoin deflationary nature, with major predictions of a parabolic rise to $100k per unit at the end of Q4 2021?
This could only go down one way. During the pandemic, A good hedge against inflation was Bitcoin, at this time, Bitcoin was trading at well below $5,000. Then counting it forward, it has seen roughly a 235% increase, report states. Also, the DeFi world has seen exponential growth so far. Fiat-backed Stablecoins are currently possessing more value than its actual peg. The inflow of cash to the industry is only the beginning, and as the industry expands in coming times, the Feds guesses on how long inflation and the dollar devaluation would span, will be terminated.
