Central bank debts and balance sheets seem to be overflowing dangerously. The effects on currencies and economies and the alternative choice of cryptocurrencies.

he balance sheet of the US Federal Reserve continues to move upwards, as if the laws of gravity have completely disappeared. This year, so far, it has increased by 75%. And we're not done yet. The government is preparing a proposal for another trillion dollars .

According to Bloomberg News, they are intended for infrastructure projects such as roads, bridges and infrastructure for 5G. If we include that amount, the Fed's balance sheet will rise to $ 8 trillion. A 100% increase in a few months. How logical does that sound?

If you play with fire, is there a chance you won't get burned? Of course there is. But if you keep repeating it, can it finally escape you and burn you? For sure. Central bank policies do not differ. Can you print money to deal with financial issues? Of course. Is it the right move? It depends.

This is not nuclear physics. It is not possible to "print" thousands of billions of dollars without affecting the long-term value and viability of the currency. Historically, national currencies have been a matter of time overflowing with inflation and devaluation. They are few, measured in fingers, what they have endured for more than a few decades, without facing such phenomena and finally disappearing.

It is not only the balance sheets of the Central Banks that have escaped any scrutiny, it is also the debts. Bloomberg estimates that US debt will reach the levels it had during World War II . The same goes for the deficit. It is worth noting that even before the recent crisis, debt to GDP had more than doubled in 2019. From 35% in 2007, it had reached 79%.

What transparency?

The economic stimulus package is the largest in history. The plan included, among other things, the Paycheck Protection Plan , which, if a company does not make redundancies, will be able to obtain loans at extremely low interest rates. The favorable terms of the loans, combined with the unfavorable economic impact of government measures to prevent the spread of the pandemic, have led 4.5 million small businesses to receive more than $ 500 billion.

It was initially said that the names of the companies, the loan amounts and other information would be public data. They would be posted on the Small Business Administration site . However, Finance Minister Steven Mnuchin turned 180 degrees . He revoked it during a hearing of the Senate committee, on the grounds that it was confidential information.

However, the Government Accountability Office, whose job it is to control the government, will not be able to access the information either. The agency is expected to write a report on the $ 3 trillion in spending by the end of June. Probably unlikely anymore.

It is clear that transparency is not one of Mnuchin's immediate priorities, to put it mildly. One reason is the reactions of the citizens. In the previous major aid package for the 2008 crisis, several companies went so far as to return the money due to the backlash. If the names and amounts of each loan are revealed, there will be criticism of whether the money was distributed "fairly".

Another scenario is that this aid package does not exclude companies related to government officials, the Senate, etc. The Paycheck Protection Program was exempt from these conflict of interest rules. Logically, there will be companies that belong to or are related to holders of public office.

Finally, there is a significant possibility that the government does not really know where all the money went. There have been allegations that some of the aid money intended for civilians has been lost or sent to the dead. The inability to exercise strict control in conjunction with the disclosure of the data would lead to ridiculous incidents that would embarrass the government.

However, when billions are shared, even if we accept that there is the best of intentions, it is unacceptable not to disclose where that money is going. It is not necessarily morally but also economically necessary. If there is no transparency, it is very easy to direct money to misguided, unproductive attitudes. Sooner or later it will boomerang. The amounts are too large to be significant.

The alternative to bitcoin

We are watching one of the largest monetary experiments ever conducted. There is no precedent for comparing the situation we are in. These policies may help economies escape the painful situation or they may accelerate the collapse of the current monetary system. Let's hope they know something that the rest of us don't know. But we are very afraid that the central bankers will look like air traffic controllers at a busy airport with old-fashioned equipment. Night. With fog.

Why break our heads and explore investment alternatives, since there is a proven solution to stocks? At least the Americans proved to be resilient once again. They even continue to rise, despite the prospect of a new wave of Covid-19 . Good luck FED.

Shares are related to the economy. Bitcoin, no. No matter how much the authorities intervene in the market, the main force that directs it will not change: the tug of war between supply and demand.
Bitcoin, as time goes on, is becoming rarer. It no longer exists as a theoretical possibility.

In practice, we have seen it repeatedly applied faithfully over the years, dispelling any doubts. In government money, as time goes on, the opposite happens. Their rarity is changing. The unbridled creation of money made the contrast more pronounced. In the age of uncontrolled money creation, the characteristic of rarity is of particular importance.

The news from the crypto market

* A city that will be created from scratch and will use exclusively a specific cryptocurrency, akoin. It's a $ 6 billion project , inspired and funded by renowned singer Akon. The first phase of construction of the Akon City, which will be located in Senegal, an hour's drive south of the new airport in Dakar, includes roads, a hospital, a shopping mall, hotels and a school.

* Something we didn't expect to see. In the video for the 50 years of Range Rover , a selection of the events that marked the course of humanity during this period is made and one of them is the birth of bitcoin ). Happy birthday, Range Rover!

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