Posted 5 months ago | Ben Armstrong
Welcome to the Global Venezuelan Inflation Hell
There is a lot of money – and it will make most people poor.
We think of money as wealth – but it isn't. Money is a means of accounting and nothing more. You can ask John Law about it – and ask him how the Mississippi bubble ended.
Some think that the French Revolution was a direct result of this era of history – but again – most people don't actually pay attention to money – how it works – why it has value – or why it matters.
It is probably time to educate yourself – because there is a $h&t storm coming.
Ask any Venezuelan About Inflation
Statistics come from somewhere – and they generally understate any given phenomena – counting and all that.
To put this into perspective, in a normal economy, FMQ is between 35% to 40% of GDP, but with the current situation, the projection shows we might reach 125% of GDP in just a couple of months.
Follow the money
To answer the question of where is all of this extra money coming from, we turn to the Federal Reserve (FED).
By buying up Treasury issued bonds,
“The Fed buys Treasury bonds up to the previously announced monthly QE limit, only now there is no limit, giving the primary brokers a guaranteed turn and crediting the selling banks’ reserve accounts with the proceeds,” according to an article on GoldMoney.
The global purchasing power of the US dollar has decreased by 10% due to the lack of demand, and countries such as China are opting to sell the dollar in returns for commodities instead.
This means importers will have more dollars on their hands, creating another stream where US currency is coming back into the country and it is unlikely that China is the only country doing so.
If these extra dollars were to be spent into the real economy, it will likely depreciate the dollar even further and inflation will continue to rise unless the Treasury goes out of their way to buy back these dollars to deescalate.
Let's Talk About the End Game
People are limited by imagination. We all want to see the future as being positive – but in this situation – we may not be able to imagine the horror that awaits us all.
If you are into crypto because you want to make returns in fiat terms – that is fine and you probably will. But that isn't the real issue. Fiat currency is a global control mechanism and it is failing fast.
Much in the same way that the social fabric in many Western nations has fallen into tatters – the global fiat hustle is falling apart. With massive inflation comes more crime – corruption on a scale that most people can fathom – and hardship that leaves intergenerational scars.
The French Revolution wasn't a great time to be in Paris – and the next decade may be far worse in many places.
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