Why the current Monetary Policies mean Bitcoin wins either way

in GEMS4 years ago

How would you feel if you knew Bitcoin was going to win no matter what?

Pretty good right?

Well, if you think about the way things are going right now with Central Banks around the world it seems very likely that it will win no matter what.

The only way it doesn't is if countries band together and outlaw it, which is a possibility actually.

Anyways, back to my point...

Right now we have central banks around the world printing more and more fiat to try and keep us out of a global recession, the worse things get the more they will print.

Right now, the impact of what they are doing isn't really being felt, in fact as I type the dollar has been strengthening which is exactly the opposite of what we SHOULD be seeing happening if the stimulus was working...

IE, the money printing should be stimulating economic activity, but it isn't, at least not yet.

image.png

(Source: https://twitter.com/RaoulGMI/status/1264224756032778241)

Instead the dollar keeps getting stronger and stronger as the need to hoard dollars outweighs the increasing supply.

What happens next?

Well, the FED and other central banks have already shown and told us that this is their playbook.

They will keep printing and throwing liquidity at the problems until they go away.

It has sort of worked so far, so why not keep going that route?

I mean it got us out of the Great Recession right?

The playbook remains the same, whether it works initially or not, just throw more money at it until it eventually works.

From there, either eventually it will work and the economic activity will start increasing again or they will keep doing this all the way down until the whole darn thing implodes...

Bitcoin wins either way...

Lets say economic activity eventually starts picking up again, and all the extra liquidity being pumped in the world economies "worked".

Well, in that scenario, everything priced in fiat will go up.

It's very easy to see how bitcoin benefits in this scenario as its price in dollars would go up.

The other scenario is where the extra liquidity doesn't work and they just keep pumping and pumping until eventually the whole financial system implodes and we need a re-boot.

It's happened with every other currency since the beginning of time so it will happen with the dollar and current fiat currencies eventually as well.

In that scenario things like gold and bitcoin make a lot of sense, eventually.

People will want to preserve whatever value they can as their fiat currencies implode.

So, whether it be as an inflation hedge or as a store of value or as a hedge against fiat currency implosion, there are quite a few ways bitcoin will eventually win.

The only unknown is how governments will respond to all of this when it inevitably starts happening....

Stay informed my friends.

-Doc

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Eventually even Bitcoin will collapse due to inherent flaws... There will be another cryptocurrency that replaces it.

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