We often say the inflation of the US dollar will push more $USD into Bitcoin, i.e., BTC as a hedge against inflation. But the opposite is also true: when fiat currencies deflate (the buying power increases) it is because fiat savings are no longer paying enough interests. In times of deflation, people are taking their money to the stock market, and to Bitcoin.
Deflation means prices are dropping. And deflation means people will want to wait to buy new goods and services hoping that prices will continue to drop further.
So in Europe, the central banks are already speaking of the "Deflation Ghost", which may kill the economy (grind it to a halt). Have a look at our stock markets and see how that world is completely disconnected from reality. Our monetary-financial system is running on its last reserves. Negative interests for saving accounts have already been introduced for the wealth with savings over $250,000. But negative interests will be introduced for Joe Schmoe and Suzy Homemaker soon as well. Namely, to push people to spend more (to counter the deflation.)
Worlwide, debts are increasing and Central Banks, including the American FEDeral Reserve are afraid to "normalize" things since the last time they tried, stock markets collapsed. As a consequence: Central Banks are afraid to normalize and stocks are soaring to the moon, because everyone who still has money in the bank is FOMOing. Stocks aren't soaring because those companies are worth so much but because money isn't generating interests in the savings account anymore. It no longer pays to keep money in the bank.
Stocks are turning into a giant mega bubble (it already is) and sooner or later it is going to burst. Then, money won't flow back into money but into scarce stuff like bullion and bitcoin, whereas the value of FIAT is going to zero.
Time will tell.
[link] [comments]
Comments
Post a Comment