As everyone knows, the US government and central bank can "print money out of thin air" (printing money out of thin air: English idioms saying money printed unexpectedly, impossible estimated) and in unlimited quantities. The United States and Federal Reserve have created money from nothing for years because they have used up all their monetary policies. While many Americans will be happy to receive a check of $ 1,200 from the Treasury, this move will essentially devalue the US dollar, reduce purchasing power and make people poor. than.
Billion-dollar stimulus package
According to the news, the major stimulus package has been approved by the Federal Reserve and the US Treasury, thereby transferring trillions of dollars into financially responsible units. Moreover, these entities plan to pay directly to each American.
A US $ 2 trillion stimulus plan is underway and some estimates suggest that the package could be worth US $ 6 trillion. Basically, there are certain financial criteria that Americans must meet and those who earn $ 75,000 or less each year will receive a check worth $ 1,200. Those with children will also be eligible for $ 500 per child under the program.
The Great Depression was made great by Hoover and Roosevelt’s attempts to rescue the economy. Politicians could not resist the temptation to "help", even though their programs unnecessarily extended and exacerbated the Depression. Today’s #stimulusbill Will do far more damage.
- Peter Schiff (@PeterSchiff) March 26, 2020
“During the great crises, Hoover and Roosevelt made great efforts to rescue the economy. Politicians cannot resist the temptation to "help", even though their programs are unnecessarily prolonged and worsen the crisis. The stimulus today will deal much stronger damage. ”
Unfortunately, people who are excited about this money don't understand how devastating it is to their purchasing power. The US government is copying the devaluation tactics used by all previously collapsed empires, such as the Eastern Roman Empire and the Roman Empire. Moreover, several central banks around the world are discussing the delivery of checks to citizens. Financial institutions like the Bank of Canada have also promised to provide Canadians with $ 2 thousand per resident. Last week, many of Canada's largest banks announced they were providing relief to homeowners by allowing deferred payment on mortgages. However, they plan to settle only deferred payments at the end of the loan and gain interest at an additional rate. US banks are also planning to benefit from those who cannot pay mortgage loans on time by simply raising loan rates.
When central banks buy a security, they pay it with money they create out of thin air.
There is more money in circulation, BUT NOT MORE GOODS AND SERVICES.
That’s how they debase the currency, lower its purchasing power, and make you poorer.https://t.co/JXEzHSvrS2
- Maxime Bernier (@MaximeBernier) March 25, 2020
“When central banks buy securities, they pay with the money they make out of nothing.
There is more money in circulation, but there are no goods and services.
That's how they devalue your currency, reduce purchasing power and make you poorer. ”
Central banks have several methods of adjusting the monetary system such as increasing the amount of money available for loans and eliminating the deposit requirement that banks must maintain to ensure solvency. The Fed also issued treasury bonds so that private banks and foreign investors can buy them but this tends to raise interest rates. So instead of paying more to lenders, the Fed bought treasury bonds to lower interest rates. By implementing this plan (quantitative easing - QE) with stocks, bonds and equity, the Fed essentially generates money from nowhere to boost the economy in the short term. This move reduces the value of the US dollar because it has more money than the number of products and services. So far, the US government deficit is about $ 23 trillion and the outstanding debt plus the trillions of newly printed dollars basically creates permanent debt.
How does money printing lose monetary value, cause inflation and reduce your wealth?
Basic economics clearly shows that the rise of any money supply causes inflation and reduces purchasing power. The reason for this is that the spike in demand that exceeds the supply makes the price of everything rise higher. Every empire collapses and every modern government today always exaggerates the supply of money and the ‘in more’ mentality spread everywhere.
Unfortunately, scholars and economists understand that the units responsible for finance and US politicians today are addicted to selling debt to generations not even born yet. The last 30 years of so-called progress in America have come from the revolving debt machine. Back in 2010, a group of famous economists wrote to former Fed Chairman Ben Bernanke and told him how continuing to buy large-scale assets (QE) was risky. Economists warn:
“We believe that Federal Reserve's plan to buy large-scale assets (called quantitative easing) should be reviewed and discontinued. Such a plan is unnecessary and not recommended in the present situation. Risk of buying assets as planned devalues the currency and causes inflation. At the same time, we think the Fed will not achieve its goal of promoting employment. ”
Purchasing power in US dollars is measured in gold
Increasing taxes, austerity measures and 'Biggest budget responsibilities'
Politicians think they can 'cure' the economy just by raising taxes on nearly everyone, but they claim to get it from the rich and corporations. To combat rising inflation, the common solution is higher taxes and austerity measures. When people ask why they can't print as much money as they want and eliminate taxes, the question is not answered. This is because officials expect you and future generations to pay off all debt with interest. A recent tweet from Coinshares CEO Meltem Demirors noted that taxing is part of the plan. Demirors tweeted:
1 / time for some fun facts!
how does the government pay for stuff? simple - the federal government collects TAXES.
per @thebalance, the US expects to collect close to $ 4T in taxes in 2021.
over 75% of it comes out of our paychecks - as individual income tax and payroll tax. pic.twitter.com/V2UztXbYVp
- Meltem Demirors (@Melt_Dem) March 25, 2020
“How will the government pay that money? Simple tax collection. The United States expects to raise nearly $ 4 trillion in taxes by 2021. More than 75% of that comes from our wages - like personal income taxes and payroll taxes. ”
“Like many people, the US government spends more than it makes. Prior to the recent instability, the government's budget in 2021 is expected to run a deficit of $ 966 billion. Because this happened for a while, the total national deficit was $ 23 trillion, more than the entire US GDP in any given year (the sum of all manufactured goods). If you add your outstanding debt, the figure is close to 120 trillion dollars. 120 trillion dollars, the taxpayer 798 million dollars each. 35% of the US workforce - mainly the boomer generation will retire in the next decade. They are also responsible for paying the biggest budget debt - based on pensions, social security, bailouts - money that they simply don't have right now. ”
After being aware of US politicians and all governments printing money from nowhere, many Bitcoiners have turned down the crazy monetary system. This is because cryptocurrency advocates understand the importance of not only anti-censorship money, but also the predictable math system, without unexpected inflation. Central banks and the Fed want to keep the inflation rate at 2% but after the whole world creates trillions of surprises, that number will be much harder to control. On the other hand, the BTC inflation rate will fall to 1.8% after halving in May.
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