The underhand truth that no one wants to look at

By My_crypto_Ideas | MyCryptoIdea | 21 Jan 2021


Today's will be a slightly different consideration that is perhaps a little outside the crypto world.
I would like to say a few words about the monetary policies of central banks, they are insane.
The unspoken goal is to trigger a strong inflation that in the long run can decrease what is the impact of debt on the various states.
A small regression: if I take on a debt of 100k today, I will pay back 100k + X interest in the future, but the 100k will have infinitely less purchasing power according to two parameters, the time horizon and the rate of inflation.

If we take a snapshot of the situation today, it is almost impossible for states to repay their debts. I repeat Impossible!

The trick should be to achieve high inflation over the next few years so as to reduce the countervalue of the debt expressed in purchasing power in the years to come.

This raises two problems, the first being that it is not so easy to trigger inflation, just ask Japan, which has been trying for decades without success. This depends on technology and demographics.
It depends on technology, because increasing production efficiency increases the supply of goods and consequently lowers prices. From demographic characteristics because as average age increases there will be less propensity to spend and therefore less demand will lead to lower prices.

The second problem concerns how we try to stimulate inflation, i.e. by buying anything on the financial markets.
This translates into the socialisation of losses and the privatisation of profits, because if the company does badly it is supported by issuing public debt (purchase by the central banks) and if it does well the private sector keeps the profit for itself.
This situation is bound to end very badly. I will explain why.
The stock market is in a strong bubble because of the continuous infusion of money into the market by the central banks, this infusion of money creates an increase in the debt of the states.

Inflation has not occurred except for food and commodities.
In other words, the population suffers as its expenditure on energy, food and various other things increases.
Those who own assets, on the other hand, enjoy the growth of the market and become richer.
This leads to the gap between rich and poor growing inexhaustibly.
For as long as history has existed, this problem has always ended in the usual way: revolutions, violent demonstrations and chaos.

There is no escape. These last until a new equilibrium is created and the wealth gap narrows again.

I think we are in for some very tough times in the near future.

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