Have We Ever Learn Anything from 2008?! To Print or Not to Print?!

By xuanling11 | Crypto Learning | 20 Sep 2021

The 2008 Housing Crisis is like a dream. It happened but it got forgotten quickly as it had never really happened. 


Emergency Economic Stabilization Act (EESA)

This act enabled the government to print more money to bail out collapse companies to prevent the collapse of the financial system as a whole. 


EESA prolonged the economic collapse

The act did not resolve the systematical issue of error but prolong the collapse. It did not help to stop the virus from spreading into deeper financial markets but encourage it to penetrate deeper into the global market. 


The Chinese market

China was not part of the global economy back in 2008 and it was avoidable of the housing crisis effect in 2008. However, Chian has aggressively joined the global trade and make itself in to the global economy in the last decade.


How was China made money?

Since the Chinese economy was lack back then, it only took them another decade to catch up fast through mimic the western economy model and occasionally broadcast its political propaganda. 


2020 economic crisis 

COVID-induced crisis was triggered the everything bubble. Every asset has been infected with a bubble. It made the government not choose but bought everything. 


We are now living on a zombie island

The economy is dead. Nothing will move upward but artificially push through supplying more money. 


One thing has remained the same - high inflation

Inflation then goes up quickly. It ate up everything you own and devalued everything you have. Your purchasing power decline dramatically. Your assets valuation may seem to go up a lot on paper but you will have a hard time selling. You will pay more taxes to cover the financial blackhole that previous mistakes the government created. 


Optimistic on cryptocurrencies

Cryptocurrencies may be a disruptor to change the path of the future. The government got nothing on their hand but have to print more money and tie up its regulations. 


The global financial market will burst no time

Other countries will experience the same as the US did but their central bank may not be able to print as much and as effectively as the US did in 2008. Rebasement of fiat currency may have become.


The market will fluctuate and swing as cryptocurrencies did but cryptocurrencies will swing less until they detached from fiat currency completely

As the debt grows faster than credits the government creates, the market will be weaker with a large swing but the crypto market may become more stable until it is uncorrelated with the financial system to create its own system.


The short term is painful

While the process may take a long time with occasionally both markets correlated with one and another. 


Current FUDs will damage more in legacy financial markets than cryptomarket

With China’s housing FUD, and many other regulation FUDs, the market is volatile but it will create opportunities to take which market may sustain the future.


In conclusion

The cryptocurrency’s vision becomes more and more clear and we may have an opportunity to see how the future change along with cryptocurrency as the force to push the innovation.

Photo by Linus Nylund on Unsplash

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