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

[BlackBoss_]

Purchasing Power of the U.S. Dollar Over Time.

Governments don't lose anything by printing more money and the losers are their citizens who have to carry massive burden of inflation and purchasing power losses of fiat currencies. Unfortunately, this is like a common hobby of governments and central banks around the world so it's unrealistic to think of any scenarios in which governments and central banks abandon this hobby and stop printing more money.

[The Sceptical Chymist]

The book written by "Lawrence Lepard" discusses in detail the effects of printing money.

While we're on the subject of edge-of-lunacy money printing and books written about it, here's another really good read:



But damn, does anybody read books anymore?  Regardless, Lords of Easy Money gives a great explanation of the Fed's quantitative easing policy in response to the economy of 2010 that just would not bounce back after the banking/housing crisis.  I'm not done reading it yet, but since I basically knew nothing about what went on behind the scenes I'm finding it fascinating.

And the money printer keeps going brrrrrrrrrrrrrr.

[Churchillvv]

It's very unfortunate that the Act of money printing is a generational coincidence, Of course we might seem immune because we have a little of our wealth stored in bitcoin which gives us a bit of guarantee that it will appreciate over 4 years but then if you person have you assets stored in bitcoin does everyone around too? of course not them it affects you indirectly, hence I see no fun in government printing more money because it's basically hitting even the slightest person.

Imagine you want a BMW worth of $30k and you have $15k worth of BTC and you kept it waiting for bitcoin to appreciate so you can buy them inflation hits and the BMW is now $60k price double and you bitcoin price too double so you have only $30k yet you're unable to afford the same vehicle. It's just unfortunate whether we like it or not we all are suffering this bullshit.

[betswift]

It's very unfortunate that the Act of money printing is a generational coincidence, Of course we might seem immune because we have a little of our wealth stored in bitcoin which gives us a bit of guarantee that it will appreciate over 4 years but then if you person have you assets stored in bitcoin does everyone around too? of course not them it affects you indirectly, hence I see no fun in government printing more money because it's basically hitting even the slightest person.

Imagine you want a BMW worth of $30k and you have $15k worth of BTC and you kept it waiting for bitcoin to appreciate so you can buy them inflation hits and the BMW is now $60k price double and you bitcoin price too double so you have only $30k yet you're unable to afford the same vehicle. It's just unfortunate whether we like it or not we all are suffering this bullshit.

Everybody is hit because of that.

Some are just smarter and are hit less via BTC

[Lida93]

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.

A similar situation with Nigeria Naira when the government decided to print launch new Naira notes even in larger quantities of different denominations. A situation that led to the devaluation of the naira to the dollar from around #460 equally to $1 to about #2000 equalling to $1 between 2022 to 2023 (though currently it fluctuates between#1500/1600 to 1 USD). Leading to a hyperinflation in the country that till date people are still finding it difficult to navigate their way around to survive the harsh economic situations of increasing prices of goods/services the government decision of printing excess new more notes caused.

[hero_the_bossman]

A similar situation with Nigeria Naira when the government decided to print launch new Naira notes even in larger quantities of different denominations. A situation that led to the devaluation of the naira to the dollar from around #460 equally to $1 to about #2000 equalling to $1 between 2022 to 2023 (though currently it fluctuates between#1500/1600 to 1 USD). Leading to a hyperinflation in the country that till date people are still finding it difficult to navigate their way around to survive the harsh economic situations of increasing prices of goods/services the government decision of printing excess new more notes caused.

When it goes to such an extent - it's a disaster.

I also remember a thread regarding the Naira itself, as I remember, that it wouldn't be profitable to buy BTC via DCA due to that exact reason - it would be less and less viable as an option..

[memehunter]

The OP gives the wrong definition of M2.

I have not given any definition mate. Where do you see the definition in OP?

M2 included all deposits except if a  time deposit is above 100k. Do it's even broader.

It is written there, Please check the source link.

The M2 Global measure includes cash, checking and savings deposits, money market accounts, and smaller deposits under $100,000.

There is a little sarcasm in the post 

[avp2306]

Purchasing Power of the U.S. Dollar Over Time.

Governments don't lose anything by printing more money and the losers are their citizens who have to carry massive burden of inflation and purchasing power losses of fiat currencies. Unfortunately, this is like a common hobby of governments and central banks around the world so it's unrealistic to think of any scenarios in which governments and central banks abandon this hobby and stop printing more money.

They don't lose anything since by printing more money they can finance everything they want and they can boost their spending on things that these officials think important to them.

The worst thing out there is their people would bare those consequences on the actions they have done since there's instances that they might suffer from inflation or worse hyper inflation situation.

This is also good to read regarding on pros and cons on the situation they are doing Modern Monetary Theory: The Pros and Cons of Government Just Printing More Money.

[Callido]

A similar situation with Nigeria Naira when the government decided to print launch new Naira notes even in larger quantities of different denominations. A situation that led to the devaluation of the naira to the dollar from around #460 equally to $1 to about #2000 equalling to $1 between 2022 to 2023 (though currently it fluctuates between#1500/1600 to 1 USD). Leading to a hyperinflation in the country that till date people are still finding it difficult to navigate their way around to survive the harsh economic situations of increasing prices of goods/services the government's decision of printing excess new more notes caused.

Specifically to your instance of the Naira note, you had to look closer than what the government termed the course of changing the currency, it wasn't all what we thought it was, it was part of an agenda to go uncovered, let me not go deeper but it never benefit the economy, don't we use the old notes up till date?

If we think the government is there to sort out our complaints, then better stop the old thinking. Governments keep printing new notes so they have enough to bundle in a safe house, all part of the plan with massive inflation in the country.

[Don Pedro Dinero]

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?

I am surprised that this response had so much merit, as Despairo mentioned the price of bitcoin outpaces inflation but it is something like that:

The price of a car and a certain amount of bitcoin is initially $1000 and after a year the price of the car raises to $1100 but the price of bitcoin on average has raised to $1500. So, what has changed is not only that you have beaten inflation, but that you have come out ahead. If you invested in the S&P 500 you stayed the same, if you invested in less profitable assets like bonds you lost out (despite the nominal increase) but with bitcoin? You have gained a lot.

[d5000]

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.

In most countries this is incorrect. The (commercial) banks create the money, but they can only create a multiple of what they deposited on their Central Bank account (typically they need to deposit about 3-5% of their own balance). That's the so called "fractional reserve banking" system. Some countries don't even have that rule anymore but rely on other rules to prevent "too much printing", e.g. the US.

What the Central Banks do however is to control the central bank money supply and thus regulate the amount of money which can be printed by the banks.

[...] fixed-supply of money (all things being equal) create deflationary economies due to technology.

Not only due to technology (productivity growth), also due other factors influencing economic growth, like population growth (demand growth) and also imbalances between countries.

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.

This mechanism is correct. But according to classical economic theory, the problem is: you can also simply hoard your money and wait so long to purchase things that the economy suffers. Hoarding does not benefit anyone.

For this problem, I still haven't read a convincing answer which could apply to a "Bitcoin Standard" world.

It can however be debated if this is really a "problem" or if it' a "feature". It should lead to a economy where economic growth is lower and less ressources are consumed.

But now tell that to the population of a developing country. They want their economy to become bigger.

Central banks themselves should loan out to its citizens thereby removing the need of such middlemen.

That would be a CBDC

[Fivestar4everMVP]

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.

I don't know about other countries but in corrupt countries like mine, fiat are heavily printed not for the purpose of doing or executing any important project, but it's simply done so the politicians find and have enough money to rig and launder out of that country to invest in foreign lands, and thereby destroying the economy of the country, inflation is high and so also is the cost of living, alot of people can no longer comfortably afford even 2 square meals in a day.

But thank goodness for Bitcoin, inflation is different countries around the world is a win for bitcoin, more fiat in the circulation is also a win for bitcoin since most will still end up investing same fiat in bitcoin, so let's just say that the more central banks keep printing money, the more bitcoin is winning.

[Nothingtodo]

Dollars/BDT/Ruppe= Unlimited Supply= Centralized= More Inflation rate

Bitcoin= Limited supply (21 Million)= Decentralized= No Inflation

World choices now Bitcoin...

[BlackBoss_]

Dollars/BDT/Ruppe= Unlimited Supply= Centralized= More Inflation rate

The most hilarious thing is people feel fearful about fiat currencies but they ignore Bitcoin by its high price, consequently they choose altcoins with very likely bet intention. It's nothing more than being degens and bet on altcoins while most of altcoins are very low in quality and weak in survivability.

They tried to run away from fiat currencies but in practice, they did not choose a better one - that is Bitcoin -  but actually chose even worse ones - that are altcoins.

How many cryptocurrencies failed?
Don't buy altcoins because they are top altcoins.

Bitcoin= Limited supply (21 Million)= Decentralized= No Inflation

World choices now Bitcoin...

Bitcoin has inflation and it is inflationary!

[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?

I am surprised that this response had so much merit, as Despairo mentioned the price of bitcoin outpaces inflation but it is something like that:

The price of a car and a certain amount of bitcoin is initially $1000 and after a year the price of the car raises to $1100 but the price of bitcoin on average has raised to $1500. So, what has changed is not only that you have beaten inflation, but that you have come out ahead. If you invested in the S&P 500 you stayed the same, if you invested in less profitable assets like bonds you lost out (despite the nominal increase) but with bitcoin? You have gained a lot.

Why were you surprised? Look at it otherwise. If the car price remains $1000, then doesn't mean that Bitcoin will remain $1000. Bitcoin grows anyways because of too many reasons, it's simply the financial revolution. If during the inflation, the price of the car goes from $1000 to $1100 and Bitcoin's price goes from $1000 to $1500, then why do you exclude the fact that if there is no inflation and car remains $1000, Bitcoin will be $1400? Even if there is no inflation, Bitcoin still significantly grows because it's decentralized, it's revolutionary and so on, it's a digital gold that we invented in 21st century, it's adoption and price increment is impossible to stop.

Inflation is very good if you are a millionaire and own some businesses and assets. In that case, the price of your assets grow while the life is getting harder for people, which means that they work harder for lesser money and it directly benefits the company (of course it also depends on the business type). Keep in mind that average person doesn't hold many assets.

[betswift]

Dollars/BDT/Ruppe= Unlimited Supply= Centralized= More Inflation rate

Bitcoin= Limited supply (21 Million)= Decentralized= No Inflation

World choices now Bitcoin...

People fear what is not tested with time and sweat already.

Little by little, they will see what BTC truly is about.

[peter0425]

It's very unfortunate that the Act of money printing is a generational coincidence, Of course we might seem immune because we have a little of our wealth stored in bitcoin which gives us a bit of guarantee that it will appreciate over 4 years but then if you person have you assets stored in bitcoin does everyone around too? of course not them it affects you indirectly, hence I see no fun in government printing more money because it's basically hitting even the slightest person.

At least while the rest of the world tries to save money only to realize that their money did nothing but decline in value, we keep our money and its value increases over time.

Imagine you want a BMW worth of $30k and you have $15k worth of BTC and you kept it waiting for bitcoin to appreciate so you can buy them inflation hits and the BMW is now $60k price double and you bitcoin price too double so you have only $30k yet you're unable to afford the same vehicle. It's just unfortunate whether we like it or not we all are suffering this bullshit.

You were never able to afford the vehicle from the start anyway. Inflation is expected. If you want to be able to afford the vehicle, you need to find a way to triple or quadruple your money. You can do that through crypto but it will not be as easy of course. But this is the price you have to pay to be able to afford anything you want.

[Dr.Bitcoin_Strange]

It's not funny at all, this is a problem that majority of the world's population are suffering, remember that people must eat, go out for their daily activities which on the process money is spent on a daily basis and it's annoying to see that the purchasing power or the money value is dying, It's so sad  bro. In the country where I live, roughly 99% of the money you spend is in Fiat and not in Bitcoin because there's just not so many business that accepts Bitcoin.

Now, let's assume that there are even so many business that allows you to pay in Bitcoin, are you not going to be required to pay same Bitcoin equivalent of the Fiat price of the goods? For example, if you want to buy whiskey and the price is $250, you will pay Bitcoin worth that amount in the current market exchange value. It's only if the seller holds that Bitcoin and the price appreciates before they can have additional profit.

[Ambatman]

History always shows insight of the future. Weimar Germany hyperinflation showed the world what printing more Fiat would lead to.
Now they are going relatively slower but it doesn't change the destination.
The citizens are always the end victims.

Hoarding does not benefit anyone.

For this problem, I still haven't read a convincing answer which could apply to a "Bitcoin Standard" world.

It can however be debated if this is really a "problem" or if it' a "feature".

I would say it's a feature.
Bitcoin is best left as an alternative to me not a replacement to the Fiat system.
In economics every choice made has a sacrifice. None is perfect, the best that the government can do is balance things out using economic tools.
Printing more money is supposed to be a last in correcting deflation but now it's poorly used
Bitcoin could help but we know it could lead to deflation, so a little printing would limit both tool defects.

It should lead to a economy where economic growth is lower and less ressources are consumed.

But now tell that to the population of a developing country. They want their economy to become bigger

I believe one shouldn't attempt flying without knowing how to stand.
The rate of inflation in my country makes the US dollar feel like a deflationary currency.
The citizens bears the brunt of this, it changes nothing when money printed for development is used by corrupt politicians.
So even with inflation and their printing mY country isn't experiencing economic growth.

[l3pox]

thanks for this website
I was looking for a dynamic website to track M2 vs btc price for a while
their low-to-low tab is quite cool too, if things repeat this cycle we'll top around october and bottom around october 2026

governments will keep printing, this is for sure.