The US Printed More Cash in One Month Than in Two Centuries.
Now the question is- will it really lead to inflation cause the Federal Reserve’s money printer has cranked up to absurd levels.
Pantera Capital CEO Dan Morehead wrote in a letter to investors published on July 29 that the United States has printed a shocking amount of money to fight the pandemic-induced financial crisis.
Morehead wrote: “The United States printed more money in June than in the first two centuries after its founding,” and added, “Last month the U.S. budget deficit — $864 billion — was larger than the total debt incurred from 1776 through the end of 1979.”
He made it clear that Pantera Capital sees Bitcoin as the solution for the current crisis. He also compared the effects of money printing in current months, to how the equivalent amount of currency had worked across centuries:
“With that first trillion [USD printed] we defeated British imperialists, bought Alaska and the Louisiana Purchase, defeated fascism, ended the Great Depression, built the Interstate Highway System, and went to the Moon.”
Morehead told the resulting inflation as one of the main reasons one should “get out of paper money and into Bitcoin.”
“There is no need for inflation-adjusted numbers [with Bitcoin] because there is no inflation/hyperinflation,” according to the CEO.
Going to zero
Peter Schiff is also worried about the consequences of money printing. He noted comments by the Chair of the Federal Reserve, Jerome Powell, who announced this week that the Fed was using its “full range of tools” to respond to the pandemic: printing money, keeping interest rates close to zero, and making asset purchases steady at $120 billion per month.
Schiff told on Twitter: “The U.S. is about to experience one of the greatest inflationary periods in world history,” and added “Any credibility the Fed has left will be lost. Federal Reserve Notes soon won't be worth a Continental.” (Continental paper money in the U.S. was at one time exchanged for treasury bonds at 1% of its face value.)
Inflation or Deflation?
Several experts prognoses that consumer prices will go into a period of deflation- that's exactly what happened in Australia this week where ABC News reported that consumer prices in the country really dropped 1.9% in June. It’s a record for deflation since the Korean War.
Still, several theorists believe the inflation is actually buried in asset prices, rather than consumer prices, and that money printing has underpinned the share market rally in the midst of the pandemic.
Pantera Capital announced its simple investment plan for riding out the pandemic:
“Stay long crypto until schools/daycare open. Until then the economy won’t function and money will be continuously printed.”
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