Money Supply Growth Has Never Been As High As It Is Today

[teosanru]

Yes this is one of our most dire concerns. The huge money supply needs a strong back support , the country must be able to tolerate it , but unfortunately due to the pandemic I don't believe that they can keep this up for long.

The Inflation is bound to affect not only the people but the country as a whole , but I do believe it's going to be worse for the nations who rely on import, even of basic things like flour and vegetables.

The countries that are heavily relying on imports food are Mexico, Japan, S-Korea, Egypt. With the exception of China, the proportion of the globally imported food for most other countries is relatively small (usually less than 20%)..

{Taken from google}

So these countries will be worst hit eventually.

The zero interest rates aren't helping actually, people are taking loans more and eventually they would have to pay off somehow, it might stimulate economic activity for a while but unfortunately right now every country is at a peak.

We need more job creation.
More production of foods and other resources in the countries themselves.
Better and cheaper healthcare facilities right now.
Free distribution of masks and gloves , because I have seen shops selling masks for 0.5$ -1$ , unaware that this would just cause more problems.

We need to go though this pandemic without loosing the value of the printed money.

I think this is because of the fiscal deficits pushed by almost all the countries. Moreover even US has announced a major fiscal deficit and the International institutions like World Bank and IMF too have announced a lot of relief measures in USD so it's obvious that money supply would be increased. But yes the inflation rate looks pretty disturbing. I would grow another contrast here. While inflation rate is higher the LIBOR is at all time low. Which means even with interest rates too low they are not able to keep down the inflation.

3 Months LIBOR data of 2020 :



Graph of long term interest rate development from 1980s to today:


 Source of charts: global-rates.com

You can see how the long term LIBOR is also at all time low in the history. This means even the credit facilities have become enough lucrative yet people are not interested in taking credit to expand their businesses due to other prevalent risks in market. This I think is pretty interesting situation. Either they are trying hard to bring back the consumer production and spending in the market or this is a sign of a economic flux.

[Dorodha]

The corona virus has slowed the growth of money supply with the economies of all countries but the reason for the loss of the United States is the rapid adoption of the economy. Most of the companies in the sector were closed at the time of Corona so growth was not expected. Which can cause inflation monetary inflation will bring the country's economy down a lot, which can lead to a terrible situation inflation is also expected to remain close to the target at the end of the financial year due to the desired improvement in the supply situation in the economy due to a slight rise in commodity prices in the international market.

[proTECH77]

Covid-19 has caused so many hardship in the country that is making some countries to overcome the hardship in the country. Many government has print more money to end the virus and save the people from hardship that is treating the citizens in the country.
I think the money supply by the government to end the hardship is not enough for what covid-19 has destroy in the country.  Upon all the money my country has printed to assist the citizens to grow their businesses and other things for what corona virus has caused the economy of the country.

[bitgolden]

Would you take a credit and expand your business in this situation right now? Obviously people are not certain about what the future will be like which makes them not take out credit and risk their business.

Let's assume you have a business, and you are making 10k per month profit, if you take out a 250k loan you know what you will use it on and you will make 15k instead of 10k and you will repay your loan eventually and will also continue to have greater profit later on after your debt is paid, you will take that loan right? Almost everyone would take that loan without a doubt.

However when there is pandemic, political chaos and basically every economical anomaly you can think of, so if you take out that 250k, maybe something unexpected would happen and instead of 15k like you expected, you will make even less than the 10k you were making, so there is no need to risk it.

[davinchi]

I doubt that consumer inflation could ever stay the same when there is this much money pumping into the market, you are giving hundreds of billions of dollars to people called stimulus and we are talking about once more, that means people will have a ton of money but when people have that much money to spend, it would be very hard to actually keep the prices same, it should be making the prices go up as well otherwise it would make no sense for companies to keep selling for the same price when everyone has a lot more money, if companies markets and stocks go up they would need to make even more profit for shareholders which would happen with increasing the price which would mean people would need to spend more and cause inflation.

This is of course in theory, we will have to wait and see after the stimulus is done again and maybe few months after that.

[sheenshane]

I rather have my own conclusion about this and it might we had to expect that inflation will hit the US and this will affect everyone globally.

Time to move assets to gold and another store of value then. But there's still a way for the US to recover from losing the value of dollars. By making successful vaccines and creating more jobs from it and pursuing globalization because of it. They probably control almost anything though, WHO is on their side and most probably, they are the ones who run it, IMO.

Then it might just they had to approve a vaccine from them and franchise it to back up the dollars.

[henmark]

The Inflation is bound to affect not only the people but the country as a whole , but I do believe it's going to be worse for the nations who rely on import, even of basic things like flour and vegetables.

This is my major concern about my country, I expect more from them. We have some mineral resources, we have so many things, but I don’t know why it is difficult for our government to strengthen those areas that will benefit economy. There are things we have naturally, but the government will still choose to import them, such a disgrace.

Instead of importing such things that we already have, why don’t they set up funds to support Businesses that are focused on those areas. That way we wouldn’t have to be importing, rather we export.

[Silberman]

Inflation is becoming a legitimate concern. Savvy investors are putting their money in gold and bitcoin in an effort to avoid having their wealth be devalued.

It's been a concern for a while now, but for whatever reason we haven't seen rampant inflation (Venezuela, Zimbabwe, and one or two other countries aside) yet.  I'm not sure why that is, because this out-of-control money printing has been going on for years now, and interest rates have been near zero for about as long.  But just because the inflation tidal wave hasn't hit our shores yet doesn't mean it's never going to.

I think the reason that for the most part we do not see rampant inflation yet is because governments are playing a game of hide the currency, bankers and different powerful entities receive the money printed by central banks but they immediately invest it in the stock and bond markets, so that money never touches the real economy and remains as numbers on a computer screen, however things like the stimulus check given by Trump during the pandemic actually hit the real economy and the inflation is felt immediately as the people spend that money right away, and when we add the US dollar is the reserve currency of the world and countries do the equivalent of burying it underground then this explains why inflation is so low, but make no mistake once that money tries to enter the real economy and governments try to use it to buy real products and services inflation will shoot up like crazy.

[AmoreJaz]

Unfortunately, the urgent need for more and more money is there. So the Fed cannot just easily pull out a considerable amount from the circulating supply into thin air in order to somehow counter the incoming huge inflation wave. It is imperative during this pandemic to try to keep the economy afloat in whatever means necessary despite the fact that stores are closing, companies retrenching, others even declaring bankruptcy, people losing their job, and so forth.

The growth in the amount of money supply has always indicated the inevitability of inflation growth. The current inflation can be very strong and lead to a rather severe economic crisis. This has been discussed periodically for a long time. The onset of the second wave of the coronavirus pandemic has again sparked talk of an economic crisis. If it does come, it is possible that the crisis could have a positive effect on the popularity and demand for cryptocurrency. We also talk about this for a long time, but we do not have such experience yet. This may be the first global economic crisis during the existence of a cryptocurrency.

though we dont like to prolong this pandemic crisis, yet, this crisis will somehow be contained once commercial vaccine is available for public. and we are looking this to happen by next year.
coz right now, they are still in clinical trials. look at the current stats regarding this vaccine devt. 6 are approved for early or limited use but still 0 approved for full use

https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html


below are just several articles discussing about the increase of interest in crypto, even crypto wallet, BRD reported to increase their number of users during this period. so this is actually the benefit from this pandemic. not that we like this pandemic but this situation opens doors to increase the number of crypto users and that is actually good for crypto community.

https://www.pymnts.com/cryptocurrency/2020/pandemic-sparks-mainstream-interest-in-bitcoin/
https://ia.acs.org.au/article/2020/cryptocurrency-booms-during-pandemic.html
https://techcrunch.com/2020/10/06/cryptocurrency-wallet-brd-reaches-6-million-users-driven-by-growth-in-latin-america-and-india/
https://timesofindia.indiatimes.com/readersblog/eduscribble/phenomenal-increase-in-crypto-trading-during-covid-19-pandemic-26307/

let's just hope that vaccine will be available soon so the government will get back on their feet and do what is necessary to uplift their respective economy

[DooMAD]

There will come a day when the situation is irreversible and forced to convert to another currency.

Arguably, the situation was irreversible from the offset.  It follows rationally that:

• the greater the debt there is within the system, the more money they have to print from nothing to feed the debt
• the more they print, the greater the debt becomes

Rinse, repeat.  It's a self-fulfilling prophecy.

Sure, money supply growth looks bad now.  But I guarantee it's going to look even worse in another 10 years if it hasn't collapsed already.  It was always going to go this way.  It's unavoidable.  There's a clear design flaw that makes failure inevitable at some point.  I'd imagine that's why satoshi went about it in a completely different way when they designed Bitcoin.

[palle11]

Government find new solution for the crisis. However, this will make the situation even worse in the next years. Inflation will burn this money sooner or later

Inflation is a breaker for economic growth. Most government need to look for means to solve the inflation problem because the world crisis is increasing daily and price of goods keep going high because of scarcity. If you check into the European economy, you see hike a little in price and that is going to affect the euro, meaning more euro is going to chase few goods and inflation gets higher.

[Mauser]

Government find new solution for the crisis. However, this will make the situation even worse in the next years. Inflation will burn this money sooner or later

Inflation is a breaker for economic growth. Most government need to look for means to solve the inflation problem because the world crisis is increasing daily and price of goods keep going high because of scarcity. If you check into the European economy, you see hike a little in price and that is going to affect the euro, meaning more euro is going to chase few goods and inflation gets higher.

The thing is that inflation is not really that high at the moment. Sure food prices and services are rising, but there are other costs which are very low at the moment, like energy cost. In Europe for example the last two months we had a negative inflation even.

Euro area annual inflation was -0.3 % in September 2020, down from -0.2 % in August 2020.

https://ec.europa.eu/eurostat/statistics-explained/index.php/Inflation_in_the_euro_area

[Silberman]

There will come a day when the situation is irreversible and forced to convert to another currency.

Arguably, the situation was irreversible from the offset.  It follows rationally that:

• the greater the debt there is within the system, the more money they have to print from nothing to feed the debt
• the more they print, the greater the debt becomes

Rinse, repeat.  It's a self-fulfilling prophecy.

Sure, money supply growth looks bad now.  But I guarantee it's going to look even worse in another 10 years if it hasn't collapsed already.  It was always going to go this way.  It's unavoidable.  There's a clear design flaw that makes failure inevitable at some point.  I'd imagine that's why satoshi went about it in a completely different way when they designed Bitcoin.

While true I think you are being too nice by describing this as a flaw, this is how the system is designed on purpose, those in power have had several opportunities to correct what is happening and instead they push for this, this means they have an end game in mind and we are being conducted to it, what is that end game? I do not know, but to me this seems intentional, however it seems they could not predict that people will act against their wishes and create something as revolutionary as bitcoin that goes completely against what fiat currencies stand for.

[disconnectme]

Extreme situation calls for extreme reaction, the way 2020 has pans out calls for extreme reaction and with these lock down people need government to step up. I do not have problem with the rate of money supply provided they are being implemented to the right source and resulting into high productivity.