Continuous Printing Of Money Out Of Thin Air Has Never Being The Answer

[shield132]

~snip~

Some may think that printing money is an internal matter of the US, which is partly true - but since the US economy is not something that can be separated from the world economy, the whole world is likely to feel the consequences of such actions. But the US is not an isolated example of such a policy, similar things are happening in the UK and the EU, although the amounts are much smaller, and citizens do not receive stimulus checks to their home addresses.

The most curious thing is that despite the fact that US is printing money like they breath air, it's value is gaining more and more strenght in some countries, paradox, right?

It is obvious that there are those who advocate this model of financing and those who are against it, but I think at least two things matter throughout the story : The first is that it is easiest to follow the line of least resistance (in this case printing money), and the second is that politicians are only politicians and not experts, so we cannot expect smart moves on their part. What they are doing today is likely to have consequences for future generations, but I think they can live with it - after all, no one lives forever and only history can judge them for their mistakes.

I wouldn't call politicians to these rundom people. Everyone who states silly statmenets, calls politicians to themselves. For me, politicians were Ronald Reagan, Abraham Lincoln, Winston Churchill and similar figures.
And we don't have economic experts or in overall experts in different fields, if you call youself an expert, then you mustn't be a minister of economics that's falling.

Cryptocurrency as Bitcoin can hardly become a solution on a global scale, such an idea does not fit into the current world order, and it would be foolish to expect any change in the near future on this issue. The world will continue to live by the old rules until the current system collapses completely, and then it is possible that a new, better and fairer system will emerge.

That's a question of time, when will current system collapse? Because technics and etc are going all against it. They analize our behaviors, what we buy and when, where we go, what's our basic health conditions (by fitness trackers) and so on.

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[exstasie]

Do you think 21 million bitcoins can supply more than 8 billion people worldwide?

Um, yes? Ever heard of divisibility? Ever heard of layers on top?

Let's not get ahead of ourselves. It's not economical to spend in the hundreds of satoshis. That can extend orders of magnitude higher during periods of high fees. Lightning as a consumer grade solution is probably 5-10 years out, and that's assuming the economics and network effect work as hoped.

Correct me if I'm wrong but Lightning also faces problematic limits in this sense. If you are transacting in satoshi or sub-satoshi amounts that cannot economically be pushed to the mainchain due to fees (or technically due to unit limitations) the security model is not very strong since the last valid (pre-fraud) channel state can't be confirmed by miners.

I'm not 100% sold on the Layer 2 narrative. I think there is a significant non-zero chance altcoins never go away since all Layer 2 solutions involve significant tradeoffs among security, liquidity, useability, and so on. A global fee market with a spectrum from low security altcoins to expensive mainchain BTC is likely to persist.

[Lorence.xD]

This may not be the solution but we can’t stop the government from printing money and they need more funds to fight the virus especially those small countries. The inflation will become more expensive because of this, and I know government know this thing and they must be prepared on that as well. Time will come for the fully adoption of cryptocurrency but for now, it is still not consider as a legal tender but there’s a big potential for this thing to happen soon.

The money printing might be a band-aid solution but I think that they are preparing a countermeasure that will combat the possible high inflation, this stimulus solution is very serious because many people are suffering and they need the money right now, maybe if the government are focusing on relief operations like soup kitchens, essential grocery giveaway and such, then they wouldn't have to worry about money, I think that money is not always the solution, this pandemic needs to be looked in a diverse and novel perspective because times are changing and sometimes the old ways are not the best way.

[NavI_027]

This may not be the solution but we can’t stop the government from printing money and they need more funds to fight the virus especially those small countries.

I will say that printing even more money is not the right solution in this crisis. Yeah maybe it can help to relieve each and everyone's hunger for the meantime but the cons we can feel in the long run could be unbearable. Actually there is no problem with the physical supply of money so printing more of it is unnecessary. What I think is happening is that the circulation is greatly interrupted that's why most of us especially the poor suffers. I believe that there are other ways to fight this. Government could encourage private organizations or rich citizens to reach out for the needy .

[Keiser Soze]

The current money printing phenomenon is far too weak to fix the structural problems of the world's big economies. The US has borrowed itself into a lost generation or two of debt. When the dust settles after the war, those left standing will have very different priorities that those seen today.

[abhiseshakana]

As a measure to curtail the household hardship instilled by the ongoing covid-19 pandemic, The United States has already pumped in $2 trillion into the public, and is currently proposing another $2.2 trillion bringing the number to more than $4 trillion. The chief cause of currency devaluation is excessive money printing by the Fed.

They print trillions out of thin air and render the value of the dollar worthless in the long run. For the records, the U.S dollar has already lost more than 96% of its value since 1913. If the same narrative was true for Bitcoin, you and I won’t probably be talking about Bitcoin, we would have counted our irredeemable losses and moved on.

With the possibility of deep inflation already knocking at the door, a commodity-backed currency or a full-scale adoption of cryptocurrency could be an answer to this continuous cycle of currency devaluation and economic meltdown. Now, the big question is, is there ever going to be a time when crypto will be fully embraced as legal tender on a global scale?

America enjoys enormous income from creating money (seigniorage). The advantage of creating currency is even greater when many supporters circulate the dollar to all corners of the world through trading activities. The consequence is that all over the world dollar users come to pay for inflation that results from printing dollars.

As long as the level of user confidence in the dollar is still high, the dollar will remain the primary means of payment. This can be detected from the ability of the US to maintain the stability and sustainability of its economic fundamentals. Even though the US debt level continues to increase every year, the inflation rate is relatively stable with thin fluctuations, and the unemployment rate at a moderate level except when a corona pandemic occurs, of course the unemployment rate rises by accident. So it can be concluded that the US has no problems with its economic fundamentals.

In addition, the FED also has an "unconventional method" to stabilize the economy, namely coordinating US corporations to buy up shares of other US corporations in order to attract dollars that circulate too much in the world.

Seigniorage in the fiat system is a form of theft and seizure in subtle ways by the monetary authorities of one country towards its people and robbery of one country against another country.

Well decentralized and safe cryptocurrency could advance in such a way that many governments will have no option than to surrender to it.

Be careful with your expectations. The essence of government and should be the main task of the government is to protect its citizens. Are you sure you can escape the role of the state? Many supporters of democracy in my country, when it was hit by globalization, finally realized that open competition and a borderless world were frightening. If globalization alone had a frightening effect on citizens in developing countries what about a purely decentralized financial system. Who gives guarantees can all get the same access and who thinks of individuals who do not have access to these systems.

I am also a bitcoin fan but I am still realistic that bitcoin will only be an option not a solution for all micro and macroeconomic problems. What's wrong with our economy is that the system is not the lubricant.

[Miaallen]

I don't think any country of the world will be considering printing of more money at this time. Printing more money without a proportional productivity will only result in the country's currency losing values. No country will want to be another Venezuela at this time a help may not come from anywhere.

[deisik]

I don't think any country of the world will be considering printing of more money at this time. Printing more money without a proportional productivity will only result in the country's currency losing values. No country will want to be another Venezuela at this time a help may not come from anywhere

They may have no choice

Printing excessive amounts of money is a way to squeeze more juice from the local populace. This has been a viable economic policy since the ancient Greeks and under pharaohs as well (the Romans took the lead soon thereafter). The essence of inflation tax is that the government is the first in line to receive the new money, and thus it has extra buying power for free before prices start to rise everywhere. Indeed, it is not going to work forever, and in the end people will either switch to barter or start using a foreign currency like it occurred in Zimbabwe

[Guryon_master]

Well, you are absolutely right about this but I doubt that this would help to cryptocurrency to get easily accepted in the society. Even this could be possible I don't think the said same manner would never be seen after all. 

[FanatMonet]

Honestly, I would not even think about the global scale, because In any case, there are countries that will oppose cryptocurrencies, because this will oppose the economies of these countries, and in the future, may reduce tax revenues from the population.

[7788bitcoin]

They print trillions out of thin air and render the value of the dollar worthless in the long run. For the records, the U.S dollar has already lost more than 96% of its value since 1913. If the same narrative was true for Bitcoin, you and I won’t probably be talking about Bitcoin, we would have counted our irredeemable losses and moved on.

The old model of finance is how things are moving even today and the government is not taking a look at other alternatives rather than printing money when there is a shortage and it will lead to inflation in the near future, but the problem is not solely in the US, most of Europe is following the same strategy for decades

With the possibility of deep inflation already knocking at the door, a commodity-backed currency or a full-scale adoption of cryptocurrency could be an answer to this continuous cycle of currency devaluation and economic meltdown. Now, the big question is, is there ever going to be a time when crypto will be fully embraced as legal tender on a global scale?

The government will not be willing to back the currency with any commodity when the economy is struggling already and facing inflation and cryptocurrency is not a complete solution for the situation either.

Image when government will print more money and then purchase the commodity and then claim that the currency is backed by something  . These drastic changes should be taken when the economic situation is running smooth and not the verge of crisis.

[Petryakov]

Let's not get ahead of ourselves. It's not economical to spend in the hundreds of satoshis. That can extend orders of magnitude higher during periods of high fees. Lightning as a consumer grade solution is probably 5-10 years out, and that's assuming the economics and network effect work as hoped.

Correct me if I'm wrong but Lightning also faces problematic limits in this sense. If you are transacting in satoshi or sub-satoshi amounts that cannot economically be pushed to the mainchain due to fees (or technically due to unit limitations) the security model is not very strong since the last valid (pre-fraud) channel state can't be confirmed by miners.

I'm not 100% sold on the Layer 2 narrative. I think there is a significant non-zero chance altcoins never go away since all Layer 2 solutions involve significant tradeoffs among security, liquidity, useability, and so on. A global fee market with a spectrum from low security altcoins to expensive mainchain BTC is likely to persist.

I completely agree that second layer solutions are not the answer to the scalability issue. Lightning or any other payment channels network is simply a separate payment system, which is connected to Bitcoin, but is not a part of it. Moreover, its properties radically differ from the first layer, which will certainly become a problem for general audience, as common people will not be capable of understanding the difference correctly. If you want to read a bit more on the matter, you can look here, starting from page 120. Moreover, claiming that Lightning can solve the scalability issue is the same as claiming that fiat can solve it too - simply convert bitcoins into USD, perform any number of transactions you wish and buy bitcoins again in the end. How is it different from payment channels?

This may not be the solution but we can’t stop the government from printing money and they need more funds to fight the virus especially those small countries. The inflation will become more expensive because of this, and I know government know this thing and they must be prepared on that as well. Time will come for the fully adoption of cryptocurrency but for now, it is still not consider as a legal tender but there’s a big potential for this thing to happen soon.

The matter of inflation is not that simple. During the 2008 crisis, the FED issued more than 4 trillion as bailouts, which surprisingly caused near-zero effect on the inflation rate (as a price index). BTW, inflation is not bad and some small rate should be always maintained to avoid a liquidity trap, which is one of the reasons for QE (or printing money) to be applied. Moreover, a liquidity trap and the subsequent deflationary spiral can be even more devastating than hyperinflation.

Be careful with your expectations. The essence of government and should be the main task of the government is to protect its citizens. Are you sure you can escape the role of the state? Many supporters of democracy in my country, when it was hit by globalization, finally realized that open competition and a borderless world were frightening. If globalization alone had a frightening effect on citizens in developing countries what about a purely decentralized financial system. Who gives guarantees can all get the same access and who thinks of individuals who do not have access to these systems.

I am also a bitcoin fan but I am still realistic that bitcoin will only be an option not a solution for all micro and macroeconomic problems. What's wrong with our economy is that the system is not the lubricant.

But don't you think that developing countries are such, because governments protect only a small fraction of their citizens, particularly elite groups? On the example of Singapore, we can see that developing countries do not stay long in such a state, once a person comes into power who actually cares about the citizens. I live in a developing country too and I embrace globalization despite any frightening effect, for I prefer any difficulties it can bring instead of living under the power of these scum in the government. Same with crypto - I would prefer an algorithmic decentralized system instead of scammers who fill their pockets at my expense.

[Latviand]

Printing more and more money is the answer in a short period until the next hyperinflation each time. The government understands that it's ineffective, and they have to deal with it.

I really disagree with that, it is too obvious that if you print a lot of money, the money itself will become useless. It's value will become lower than you can imagine so it is really not the answer, no matter what rules and regulations you put to that. As what you've said ineffective, as you print a lot of money, the economy will not grow because of increase in the demand especially in the basic necessities if everyone can afford it.

Why? Printing money is their tool for controlling the economy. 

Yes, this is right, but it seems that printing money is not the answer for the growth of an economy, proper manipulation and right regulations are the key for us to improve and grow our economy. The government should know the importance of money printing and they should tell it to the people so that they know what are the effects of it in the market.

[omone1]

I am currently fully into Cryptocurrency because the move by USA in printing of money will spell financial doom for the world economy and my nation won't be are from this economic virus. Wise people will buy bitcoin and other good Crypto project.

[Kakmakr]

The question is ....Do they have a choice? If they leave the pandemic to play out and people are laid off by the millions, then the economy will collapse and the Dollar will then also collapse as a global reserve currency. So they artificially manipulate the system to generate spending, so that the US economy and businesses can get a boost to survive.

It is a knife with two sharp ends, because left without help, the US economy will collapse... so by injecting that "help", it keeps the economy alive and the Dollar stable. 

[deisik]

The question is ....Do they have a choice? If they leave the pandemic to play out and people are laid off by the millions, then the economy will collapse and the Dollar will then also collapse as a global reserve currency. So they artificially manipulate the system to generate spending, so that the US economy and businesses can get a boost to survive

And that instantly puts us back to square one

That is, whether the quarantine was any good in the first place. Just a few days ago a Nobel laureate in chemistry (Michael Levitt, to be exact) came up with the idea that it probably killed more people than saved (apart from ruining the economy). As he sees it, indiscriminate lockdown measures were a mistake because in all countries which were affected most by the coronavirus outbreak, the death total levels out at roughly the same fraction of the total population, no matter what measures had been taken to fight the pandemic. That essentially confirms that the quarantine was pretty much useless. In other words, the cure turned out worse than the disease

It is a knife with two sharp ends, because left without help, the US economy will collapse... so by injecting that "help", it keeps the economy alive and the Dollar stable

It works but does so very much according to the law of diminishing returns, and the response curve goes down abruptly after some point

[Subbir]

Now is an honest time to shop for Bitcoin and Crypto wise people must attempt to buy and hold for an honest profit. However, thanks to the crisis within the country, the economy has been severely hampered, so it'll never be possible to print uninterrupted money out of nothingness at this point nobody will prioritize it and therefore the financial system of other countries as a leftist is far weaker.

[Savemore]

There is a recent tweet by Robert Kiyosaki about that issue where they say the printing trillions of money can become solution to revive the economy. That is also the reason why he encouraged the public to buy bitcoins than to stay and hold cash. I'm sure that there will be hyper inflation that will happen especially if they will keep printing trillions of money. We should remember how the law of supply and demand works in every types of economy.

[Harlot]

If inflation is already in the way which is more likely because some already have declared that were in the recession even cryptocurrencies aren't immune to the inflation. Yes it won't be directly affected by the supply of fiat but if the inflation will be too big its effects would come across all kinds of assets including cryptocurrencies which honestly speaking is getting its value in fiat equivalent. So even if BTC is valued at 9,500$ this time and during the high inflation rate those 9,500$ worth of BTC will have the same purchasing power as a fiat currency.

[abhiseshakana]

But don't you think that developing countries are such, because governments protect only a small fraction of their citizens, particularly elite groups? On the example of Singapore, we can see that developing countries do not stay long in such a state, once a person comes into power who actually cares about the citizens. I live in a developing country too and I embrace globalization despite any frightening effect, for I prefer any difficulties it can bring instead of living under the power of these scum in the government. Same with crypto - I would prefer an algorithmic decentralized system instead of scammers who fill their pockets at my expense.

Decentralized blockchain is very different from globalization. In globalization, there is still a third entity that regulates whereas, in decentralized blockchain, there is no governing entity. We also have to realize that many of our brothers are not ready for technological advances let alone algorithms.

We know and understand and have used blockchain and bitcoin but we must be realistic that bitcoin cannot be a solution for all the world's economic problems and apart from that our society is not ready to accept total change. The ambition of globalization is more the ambition of the owner of money rather than the ambition of the middle class and the poor. Because globalization opens wide opportunities but also invites threats, especially for countries whose societies are still underdeveloped.

Even the trends that have arisen in my country have begun to compare to the better times of the dictatorship, although they have to be careful in talking but there is no hunger, development has also entered the villages, than in the current era of democracy, but many people die because they cannot eat. Peaceful globalization can only be realized if prosperity in the world is equal.