We all knew this day was coming, but few could have imagined it to be so soon. Yes, it has been confirmed that the Fed balance sheet has exceeded 8 Trillion US Dollars as the money printing machines work overtime funding the massive spending spree that the Biden Administration has embarked on.
In 2020, investors and economists balked at the fact that whilst Covid closed down pretty much the entire world, that simultaneously around 20% of all the money that had ever been created started life during the Covid-19 shutdown. If this is the first time you’ve heard this, take a moment to consider the impact this will have on the economy, and in particular your children and grandchildren’s futures. If you were ever concerned about the state of the world they will grow up in, now is the time to be really worried. There’s no doubt that banks don’t really have much of a track record when it comes to doing what’s best for the average Joe (unless it’s ‘the Big Guy’).
And just in case you didn’t think that the 2008 banking crisis was nasty enough, just wait until the inflation really starts to bite, and it’s not just going to affect the citizens of the USA, but could have wider implications across the globe, as the world’s reserve currency inflates at an unprecedented rate. In fact, according the weekly report issued by the central bank, the Feds balance sheet has just about doubled since the start of Pandemic.
This could have a massively positive effect on the Bitcoin price, as many investors regard the digital currency as a strong hedge against inflation.
The report also showed that the central bank had divested about $160 million of its corporate debt holding this week, after announcing that it would unwind its $14 billion corporate credit portfolio earlier in the week.
Investors did seem to shrug off the inflation warning on Thursday, with the S&P500 rising to a new all time high, but how long this sensibility will last is anyones guess.
Mati Greenspan sarcastically tweeted the ‘new world record’ and closed his tweet with the tag #LongBitcoinShortTheBankers, alongside a graphic of the huge rise in debt-backed currency the central bank had printed over the last year.