Dear Banks, Please Keep Printing More Money. (LOL)

[memehunter]

Source: https://bitcoincounterflow.com/charts/m2-global/

[LDL]

The book written by "Lawrence Lepard" discusses in detail the effects of printing money. When a country's central bank prints excess money, the effect is to cause inflation. Hyperinflation occurs when a country prints too much currency, as happened in Zimbabwe in 2000 and is currently facing an extreme situation in Venezuela.
When there is excessive inflation in a country, the value of the currency in that country decreases so much that even if you take a sack of money to the market, you cannot buy a kilogram of rice. In this situation, Bitcoin will play an important role in combating hyperinflation.

[Dunamisx]

Source: https://bitcoincounterflow.com/charts/m2-global/

More money signifies more inflation, because there is no fix supply to it, which means the entire system can be manipulated when there's no cognate amount of this fiat currency that must be printed, bitcoin has come for the change we all needed regarding financial challenges, because it is limited in supply and has overcome the effect of inflation over the financial system, everything happens in an open and decentralized network, unlike the fiat.

[Alphakilo]

Source: https://bitcoincounterflow.com/charts/m2-global/

The chart should have been explained. Not all of speak chart language. And people who are cautious about opening links may not open the link provided.

This is from the link you put under the chart that explains it.

Chart Explained
This chart illustrates the year-over-year growth in the global money supply (M2) from the top 21 central banks, compared to the price of Bitcoin. The M2 Global measure includes cash, checking and savings deposits, money market accounts, and smaller deposits under $100,000.

An increase in global liquidity indicates that major central banks are making more money available to their economies. They typically achieve this by lowering interest rates or purchasing government bonds and other securities to expand the money supply.

When comparing Bitcoin’s price to the M2 growth rates of central banks like the FED, ECB, PBoC, BoJ, and others, there is a clear correlation—Bitcoin tends to rise in tandem with the growth of the M2 supply. Historically, Bitcoin bull markets have aligned with periods of increased global liquidity.

[Synchronice]

OP, I understand where you are coming from, M2 measures the money supply of multiple countries and economic blocks, as banks increase the money supply, so increases the money flow into the financial system and drives up the prices but does that really matter? If the price of car is $1000 and you have Bitcoins that worth $1000, during the inflation the price of the car will grow, it will become $1100 but according to M2, the price of the asset increases and your Bitcoins might worth $1100 but what changed in the end? The purchasing value is almost always the same. The more money we print, the more money we need to buy things and nothing changes for better in the end. You also can't have everything in assets if you are not a multi millionaire, so this money printing negatively affects average people in any way.

[AVE5]

Arthur Hayes said it that ‘They always print money’ and and on the excessive practice of printing more monies, so liquidity of the fiats will be reverted to lost values and then investors will be moved to buy and hold their funds on bicoin which would outcome the surge of bitcoin price.

[avikz]

Lol! I can see a very nice correlation between money printing and Bitcoin price. So yes, if Banks keep on printing money, we should be able to see higher Bitcoin price as the time goes.

The governments needed a way to keep on printing money, that's why they have moved to a debt based economy. The more loan it disburses, the more money is printed and the economy grows.

Bitcoin stands at the opposite end and smiling 😊

[alani123]

The OP gives the wrong definition of M2. M2 included all deposits except if a  time deposit is above 100k. Do it's even broader.

M2 expansion is the result of several factors. It could be monetary policy in terms of direct "printing" or issuance but it's usually less of an effect from issuance. The new money in circulation can come from quantitative easing and interest in deposits paid by the central bank.

Banks can also create some money in terms of giving loans and prescribing fractional reserve.

When M2 expansion is moderate it's actually a good sign but what has been happening lately is a new craze. Central banks have out tons of liquidity to banks and this ended up being of hell to corporations and only them. The inflation we've been seeing comes because they want higher profits while most of us saw nothing in terms of higher income.

[Curious T]

The book written by "Lawrence Lepard" discusses in detail the effects of printing money. When a country's central bank prints excess money, the effect is to cause inflation. Hyperinflation occurs when a country prints too much currency, as happened in Zimbabwe in 2000 and is currently facing an extreme situation in Venezuela.
When there is excessive inflation in a country, the value of the currency in that country decreases so much that even if you take a sack of money to the market, you cannot buy a kilogram of rice. In this situation, Bitcoin will play an important role in combating hyperinflation.

But somehow, politicians don't care about this. I can't understand it. Is it that they don't care, or they don't know, or they're just out of their depth?
In my country, they print it at will, but somehow keep accusing others of the reason for the currency taking a nose dive.
A person doesn't need a Harvard degree to know that if something is not scarce or if there is too much of a thing, it loses its value, so why do they keep printing money when they know it's hurting the currency and the people using it?

[pooya87]

We all laugh but it is a sad laughter because we are laughing at own economy that is integrated in the day to day lives of 7 billion people who live in hardship one way or another, just because the economy from its inception has been broken. The concept of printing money currency without any cap was doomed to fail from the start.

The worst part is that Bitcoin is not a solution, it is just an exit for a minority in the world who thought out of the box. The only viable solution is fix that fundamental flaw in the way economy is designed.

[uneng]

The lesson here is: don't hold large amounts of fiat currency for too long. Keep in fiat only the money you are going to need for you daily expenses and potential emergencies. All the rest must be exchanged into investments which will make your money value grow on long run.

I remember 10 years ago I was able to pay 1,26$ for a MC Donald's hamburguer. Now that same hamburguer is pricing 2,60$. Compared to 10 years ago, I need 100% extra fiat in order to acquire the same product. For me it looks insane!

That is actually a good exercise you can do as well. Think about how much you used to pay for certain goods 5 or 10 years ago and compare to how much you are paying right now.

[Despairo]

If the price of car is $1000 and you have Bitcoins that worth $1000, during the inflation the price of the car will grow, it will become $1100 but according to M2, the price of the asset increases and your Bitcoins might worth $1100 but what changed in the end? The purchasing value is almost always the same.

That's correct, we see the price of product and service increase, but if it's just due to inflation, it's actually nothing. Since global economy in the future doesn't look good, they will print more money and we will see Bitcoin price rise faster.

Fortunately the demand of Bitcoin is high, so the rising of price overtake the inflation rate.

I remember 10 years ago I was able to pay 1,26$ for a MC Donald's hamburguer. Now that same hamburguer is pricing 2,60$. Compared to 10 years ago, I need 100% extra fiat in order to acquire the same product. For me it looks insane!

Even worse, they might lower their quality and shrink their products, so you might pay more than 100% extra.

[crwth]

What great advice, lol. I think this is one of the best ways to get people to see the value of Bitcoin and understand why it's an essential asset against inflationary fiat.

I think the way governments are doing things is just collapsing. With all the bonds being sold to other countries, it is not sustainable anymore, and keeping up with the rates.

[freedomgo]

Banks will definitely do that, they’ve done it before. They’ll just keep printing unlimited money, which leads to inflation.

We don’t want that to happen, but honestly, it’s almost inevitable given the corruption among some elected leaders. The good thing is, bitcoin offers a way out for people who don’t fully trust banks or the fiat system, and who understand that fiat money isn’t backed by gold anymore.

They might be able to fool some people, but not those of us investing in bitcoin. We know bitcoin can protect us if hyperinflation ever happens. It would be foolish not to position ourselves now, especially when all the warning signs are already there.

[BenCodie]

Banks will definitely do that, they’ve done it before. They’ll just keep printing unlimited money, which leads to inflation.

We don’t want that to happen, but honestly, it’s almost inevitable given the corruption among some elected leaders. The good thing is, bitcoin offers a way out for people who don’t fully trust banks or the fiat system, and who understand that fiat money isn’t backed by gold anymore.

They might be able to fool some people, but not those of us investing in bitcoin. We know bitcoin can protect us if hyperinflation ever happens. It would be foolish not to position ourselves now, especially when all the warning signs are already there.

With large corporations and institutions acquiring Bitcoin, and new corporate entities being established just to raise debt to buy Bitcoin, it very much does seem like the play right now is to accumulate as much Bitcoin as possible in preparation for even more excessive printing, and that inflation will hurt more and more normal people who just can't find the means to buy bitcoin, or refuse to understand it.

[bullbandit9]

Great chart and an even better topic. Can someone with graphing skills take the data from the chart, and extrapolate the next ten years using the growth of the past 10 years? That would be very interesting to see.

When M2 expansion is moderate it's actually a good sign but what has been happening lately is a new craze. Central banks have out tons of liquidity to banks and this ended up being of hell to corporations and only them. The inflation we've been seeing comes because they want higher profits while most of us saw nothing in terms of higher income.

It is an elaborate scam, that is what it is. Wage growth has stagnated for more than 20 years now.

[Darker45]

The government prints more money. A portion of it goes into Bitcoin. Bitcoin's price in fiat rises. The catch, however, is that money is devalued in the process. It loses its purchasing power. The devaluation of money balances out the increase of Bitcoin's fiat value. In the end, everything could be pointless.

Just like gold. Recently, gold bugs were celebrating because the price registered another ATH. They're bragging that it is indeed a store of value, a hedge against fiat devaluation. The truth, however, is that for many decades it has failed to keep pace with inflation. It indeed reached an ATH in April this year, but prior to that its inflation-adjusted ATH was in January of 1980.

So, don't be too happy when Bitcoin's price increases along with the increase of the supply of money. It naturally should. Otherwise, it's depreciating.

[d5000]

M2 growing isn't bad per se, but the growth should be approximately in line with economic (and population) growth. This means: if M2 grows more than the economy, then one can say there may be something wrong.

Here's a chart based on the concept  "M2 per USD of GDP" during Bitcoin's lifetime (since 2009) for the US. For most of the time the number indeed grows and thus affirms the "money printing" theory.

But the correlations with the Bitcoin price are much less clear here:


Source

There is a correlation in 2012, 2013, 2015, 2016, 2017, 2018, 2019, 2020 and 2022 (either M2 growth when the BTC price increased, or M2 and price decline).

Instead we have no correlation or even a negative correlation for 2010, 2014, 2017, 2019, 2021, 2023 and 2025. A very close 8:6, i.e. there seems to be a correlation but it is very weak, and in the last 2 years it reverted.

2011 can be disputed, while the price grew until mid-year, the last 6 months were bearish, and M2 vs. GDP continued to grow. And in 2009 the market was still to immature.

Another thing I don't really like about that chart is that it is using a log scale for Bitcoin, but a linear scale for M2. This means it compares apples and oranges.

Also the OP graph probably includes the Chinese Renmimbi and China saw an enormous economic growth in the 2010s, so it's not a surprise that its M2 supply also grew a lot.

[Mastercon]

Banks don't print money , government mint does.

What does bank do then?
It borrows the money from Central bank and lends them to customers thereby circulating money.

We're continuing to inflate the money supply like always and this inflation compounds on the last 100 times we've done this same thing but at least the number we have made public is low. Anti debt, there are certainly good and bad debts. But state monopoly of the money supply obfuscates this. If rates which are really just the price of time and future resources are manipulated, then all debts can 'look' like good debts. The “value” of the dollar doesn’t fluctuate it is 1=1. Value is undefined jargon especially when real value can be set accordingly by man. Reckon it’s just part of the game of substitutions imperative to scale interest rates alongside the money supply. Not only is the risk-free rate zero, the cost of capital should be much higher since fixed-supply of money (all things being equal) create deflationary economies due to technology. Since things get cheaper over time, you will need a higher rate of return to justify lending money out vs today’s system where you’re forced to invest to preserve the purchasing power. It’s actually not important that the base layer is used by 8 billion self-sovereign people, it’s only important that it’s possible and that the sovereign states play by the same rules as their sovereign citizens. There is immense benefit for taking the money printer out of the government’s hands. The consensus will always be managed by the minority like all revolutions.

No LOL'ing though!!!

LOL - Loan on loan is a bad practice. Central banks themselves should loan out to its citizens thereby removing the need of such middlemen.

[Sanitough]

So, don't be too happy when Bitcoin's price increases along with the increase of the supply of money. It naturally should. Otherwise, it's depreciating.

That’s the natural effect, but it’s still a good thing for the bitcoin market because people are getting smarter about how to protect the value of their money. We all know that as governments keep printing money, it’s the taxpayers who end up suffering in the long run. So this shouldn’t be seen as some kind of gift or benefit to the people, it’s really just an additional burden for the future.

Where would we be if there was no bitcoin? Everything would be controlled by the government, and even if there are investments that can beat inflation, they’re not as accessible as bitcoin or other legit cryptocurrencies.