Post
Topic
Board Economics
Re: Bitcoin vs. Cash Inflation — A discussion on which is better
by
o_e_l_e_o
on 21/06/2020, 09:48:13 UTC
However, all this is temporary. It is an emergency measure so to speak.
That's the problem though - it isn't temporary. Here's the Federal Reserve's balance sheet for the last 17 years (click for full size):



Pre-2008 crisis it was sitting at a fairly stead $800-900 billion for several years. 2008 financial crisis hits, and they rapidly print around $1.4 trillion to stabilize the economy. You could argue that needed to be done, which would be fine if they then undid those changes at a later date. Instead, during the next 10 years, instead of slowly removing that $1.4 trillion, they continue to print more and more, devaluing the dollar more and more, and their balance sheet reaches a record level of $4.5 trillion. Finally, 11 years later in 2019, they think about starting to reduce their balance sheet, until COVID hits and they print almost $4 trillion in the space of a few weeks.

If it took them 11 years to start reducing their balance sheet following the 2008 crash, how much longer do you think it will take following this crash? Not to mention they probably aren't even finished printing for this crash yet. There will be another crisis, and another, and another, all before they even begin to undo these changes, let alone get their balance sheet back down to "normal" levels. The printing will never end. The dollar value will never stop falling. This isn't temporary - this is normal.