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Photo from Adobe Stock — Adapted by Sylvain Saurel

The Fed That Prints Always More Money Is the Real Problem, Bitcoin Is the Solution

The Fed applies the same flawed monetary policy over and over again.

Sylvain Saurel
Jul 13 · 7 min read

The recession is here. While some had seen the strong rebound in the stock market that began at the end of March 2020 as a sign of a V-shaped recession, the economy is now heading towards a W-shaped recession. The coming months are going to be extremely difficult, and the stock market cannot remain disconnected from the real economy forever.

A real economy whose indicators are getting worse and worse week after week.

The bubble in the stock market is rooted in the Fed’s unlimited quantitative easing monetary policy conducted since March 23, 2020.

In just 3 months, the Fed printed more than $3 trillion and injected it directly into the current monetary and financial system. This has had the initial effect of increasing the Fed’s Balance Sheet as never before.

The Fed’s Balance Sheet now exceeds $7 trillion, making it the world’s largest asset manager ahead of BlackRock.

The Fed is far from being an exception. Rather, it serves as a model for all other central banks around the world that have printed a total of more than $10 trillion since the onset of the economic crisis in 2020.

The G20 member countries have of course taken advantage of this easy money policy to go even further into debt. In 2020, a new world is emerging in which having a GDP to public debt ratio above 100% is the norm.

As the world’s leading economic power, the United States now has a public debt that exceeds 26.5 trillion dollars. At this rate, the threshold of $30,000 billion public debt will probably be reached by the end of the year.

The economic crisis of 2020 highlights the flaws of the current system

The current economic situation is extremely bad, and I have the feeling that more and more people are beginning to open their eyes to who is really responsible for this.

You have no doubt understood that I am talking about the current monetary and financial system, at the centre of which are fiat currencies that are not based on anything tangible. This gives central banks the freedom to print as much fiat money as they want.

The economic crisis of 2020 shows everyone how easy it is for the Fed and other central banks to print unlimited amounts of fiat money.

Unfortunately, all this comes at a cost. This printing of unlimited fiat money is not without disastrous consequences for the vast majority of the world’s population. I am, of course, talking about the poorest people. The richest people, the famous 1%, benefit from this irrational quantitative easing policy to get even richer.

If you haven’t been interested in the economy for a very long time, you might think that the current situation is new.

In reality, the situation we are experiencing in 2020 has already been experienced in 2008, in 2000, and so on. Since Richard Nixon’s de facto introduction of the current system in August 1971, economic crises have been occurring at a frantic pace.

While during the Bretton Woods system period from 1944 to 1971, income inequality was stabilized and banking crises were avoided, the situation has been deteriorating steadily since 1971.

We are now experiencing an economic crisis every 10 to 15 years. This seems to be becoming a constant in the current system.

The printing of endless amounts of fiat money is at the root of all problems

At the root of the current system’s evils is the fact that central banks have full power to print as much money as they want out of thin air. Thus, the monetary and financial system is no longer based on anything tangible.

From 1944 to 1971, the system was based on gold, which had made it possible to stabilize the world economic situation on a lasting basis.

The endless printing of fiat money is the problem at the root of all the ills of the world economy.

Unfortunately, the Fed and the central banks are dealing with the ills of the global economy by tirelessly applying the principles that are at the root of those ills. We are in the middle of a vicious circle that had no way out until now.

Central banks are like an alcoholic patient who is advised by the doctor to drink even more

Let me give you a telling example. Imagine a doctor who has an alcoholic patient in his office. The patient knows he is an alcoholic, but he cannot stop, even though he knows that what he is doing is bad for his health.

The doctor immediately understands that the patient is an alcoholic.

Following the current strategy of the Fed and the central banks, the doctor would then decide to order his alcoholic patient to drink whisky all day long.

The doctor would tell him that by drinking even more, the patient could forget his real problems. That way, he would not have to treat them. Obviously, this would be at the cost of the patient’s health. Moreover, it would only postpone the time when the problem really needs to be treated.

You have to tell yourself that no sensible doctor would do that with his patient. And you are absolutely right.

Unfortunately, the Fed and the central banks have been doing this for decades now.

Every time there is an economic crisis, these institutions opt to print more and more money, whereas this irrational printing of money is at the root of all economic crises. By printing fiat money, central banks always allow the real solution to be postponed until later.

What is worrying is that with every economic crisis, the bill increases.

As the magnitude of the problems becomes greater and greater, central banks have to print more and more money.

In 2000, tens of billions of dollars were enough. By 2008, hundreds of billions of dollars were needed. By 2020, central banks had grown to the trillions of billions of dollars.

In the future, central banks will eventually print quadrillion dollars.

The powerful at the head of the current system will do nothing to change it

The attitude of the powerful at the head of the current system is like a headlong rush that will never stop. Politicians, central bankers and economists know full well that the current system is flawed.

However, they will do nothing to change it. They benefit too much from this flawed system.

For example, the current members of the Federal Reserve Board of Governors are all millionaires who are at least 50 years old. Most of them are closer to 60 or even older. These people have benefited fully from the current system for years, so they have no reason to end a system that benefits them.

If the problem of the current system is known to everyone, the solution cannot come from above.

As always in this type of situation, the solution must emerge from the people.

During the economic crisis of 2008, we all had no real hope of a better solution for the world of the future. We were all in a kind of fatality in the face of a monetary and financial system that seemed to be set to continue this way for many years to come. Without an alternative, it seemed impossible to hope for anything better.

Bitcoin is the answer to the flaws of the current monetary and financial system

And then Satoshi Nakamoto invented Bitcoin as an answer to the flaws of the current system.

Bitcoin is hard money. Bitcoin is an improved version of gold that is easily accessible to everyone on Earth. The main advantage of Bitcoin over fiat currencies is that it is available in finite supply. There will never be more than 21 million Bitcoins in circulation.

In addition, Bitcoin’s monetary policy is written in its source code. It is automatic and known to everyone in advance. No human can change the rate at which new Bitcoins are issued by a simple arbitrary decision.

Bitcoin is the solution that we will be able to rely on in the future to stabilize the world economy.

Many continue to criticize Bitcoin, but little by little, even its fiercest opponents are coming to admit that Bitcoin is not going to disappear as they predicted. Bitcoin is here to stay, and the anti-Bitcoin bubble will eventually burst in the years to come.

More and more people will come to Bitcoin in order to discover a credible alternative to the current system that is flawed.

The greatest value of Bitcoin is currently in the protection of wealth in a censorship resistant way.

By meeting this essential need, Bitcoin price will be able to reach a price between $300,000 and $1 million within the next 20 years.

Conclusion

What happens next will depend on Bitcoin users, as has always been the case since its inception. In my opinion, States will not be able to continue ignoring Bitcoin, and even central banks will end up using Bitcoin as a reserve currency to limit their dependence on the U.S. dollar.

Because Bitcoin has the advantage of being politically neutral, many countries will see its use as a way out of the current system in which the United States rules as the hegemonic master.

I will stop here, but I hope this story has made you want to learn more about Bitcoin, to open your eyes on the current system. If you wish to do so, you will find a whole bunch of stories in this publication that will help you do so.

If you have any questions, please feel free to ask me as a comment.

In Bitcoin We Trust

In Bitcoin We Trust is a place where Bitcoin believers…

Sylvain Saurel

Written by

Entrepreneur / Developer / Blogger / Author. In Bitcoin We Trust: https://www.inbitcoinwetrust.net

In Bitcoin We Trust

In Bitcoin We Trust is a place where Bitcoin believers share their ideas about the upcoming revolution. Blockchain and cryptocurrencies are also covered in this publication.

Sylvain Saurel

Written by

Entrepreneur / Developer / Blogger / Author. In Bitcoin We Trust: https://www.inbitcoinwetrust.net

In Bitcoin We Trust

In Bitcoin We Trust is a place where Bitcoin believers share their ideas about the upcoming revolution. Blockchain and cryptocurrencies are also covered in this publication.

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