The moves to boost liquidity in the markets and the imagination in invention… The addiction of the banking system to cash and the hidden traps. 48% rally for Bitcoin in… 48 days.
The Central Bank of China announced the day before yesterday that it would boost markets with liquidity of 1.2 trillion euros. 173.8 billion yuan, worth $173.8 billion Dollars.
In other words, they will distribute to the system an amount of money as much as the capitalization of Bitcoin. In other words, they will distribute to the system an amount of money as much as the capitalization of Bitcoin. As much as Greece’s GDP is.. And all that in one day!
It is a provocative irony to criticise Bitcoin as a stooly air (which of course is not true, as it has very high production costs) by the same people who do just that in their own currencies. Central Banks are showing envious imagination in the invention of terms such as: “quantitative easing”, “balance sheet expansion”, “credit relaxation”, “monetary finance”, “large-scale asset purchases”. All these terms contain the same meaning: “we create money out of nowhere at will.”
The banking system is addicted to a liquidity pipeline. Especially in recent years, it is so necessary that they alone think to contain it; the whole structure is in danger of collapsing. This, of course, favours bitcoin holders.
Of course China is not the first time it ‘’favours’’ they bitcoin/blockchain era. According to crypto blog, bitnewsbot, president Xi told that he will support the blockchain economy by easing his prior ‘’tough’’ stance.
And what is the solution devised by the banking elite and the eminent economists who define our fortunes? Give even stronger doses.
At its core, money is nothing more than a social contract, a relationship of trust. I trust the banks that the digits in my bank account correspond to corresponding value notes. I trust the government that the papers it presents us as banknotes are worth it. That with them I can buy in the future goods or services that I desire.
Inflation is the pace at which new money is created. Inflation is the pace at which new money is created. Inflation is insidious. Inflation is insidious. Usually, its effects are not immediately obvious. Depending on the inflation rate (and other factors), the time between cause and effect may vary.
It also affects different groups of people more than others. It favours those closest to printers. It takes time to release the newly arrived money and adjust prices, so anyone who is able to raise more money before they are undervalued is one step ahead of the inflationary curve. That is why inflation is seen as a hidden tax.
The issuance of new currencies is a completely different economic activity than all the others. While goods and services produce real value, money printing does the opposite: it takes value from all those who keep the currency inflation. The most affected asset is cash savings.
The hardness of the money document depends on who is responsible for the “printing machines” and how willing he is to print the money. The value of the coins is deliberately lost. This is not a coincidence or misfortune. History has shown that governments are only a matter of time before they succumb to the temptation of inflation of money supply.
The catastrophic effect of inflation becomes apparent once low inflation turns into much. All the money people have been saving during their lives will disappear. The bills in our wallet of course will still be there, but their market value is shrinking.
Gold is rare because the “flow” of gold is limited and because mining requires effort, time and expense. Over time, gold and silver coins were replaced by banknotes, which were slowly accepted as payment. This acceptance created the illusion that the paper itself has value. The final move was to completely cut the bond between representation and the real one: abolishing the golden rule and convincing everyone that the paper alone is valuable.
The abolition of the Rule of Gold has given way to a new reality: adding new money requires only a few drops of ink. In our modern world, attaching a few zeros to the balance of a bank account requires even less effort: typing a few digits into a bank computer.
The graveyard of the forgotten coins leaves no doubt. It proves that the money that can be printed will be printed. So far no political system in history has managed to resist this temptation. Bitcoin removes the temptation to print money in the most reliable way: mathematics.