Modern Economic Nonsense — The money shortage

xuanling11
Coinmonks
Published in
2 min readJun 4, 2022

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We heard about quantitative easing, which is printing money infinity. The opposite will happen. It is called quantitative tightening ✂️, which shrinks the money from the existing market.

We also knew from the beginning that crypto is to prevent the government from reluctantly printing infinite amounts of money to avoid inflation. Still, it does not tell you if the government starts to withdraw money away from the market. What could possibly happen when the market has a shortage of cash? Recession perhaps?

Since the COVID-induced financial crisis happened in 2020, the market crashed overnight, and the Fed had to bail out again after the 2008 housing crisis. The barrrrrr of money was a meme and brought happiness to the equity market along with cryptocurrencies and many other assets.

Image credit: https://fred.stlouisfed.org/series/WM2NS#

Many assets’ valuations have been multiple and raised faster until inflation starts catching up.

Thanks to additional money out of nowhere that pushes everything higher, including inflation, we are now in global financial stagnation. There will be no growth in the future with too much money chasing too few goods.

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