Money seems broken these days because the world never recovered from the Great Recession.
This is the velocity of money, which shows how many times each dollar in the economy is spent.
It just falls post-2008. Nothing like this is in history.
<thread> 🧵👇 #bitcoin
This is the velocity of money, which shows how many times each dollar in the economy is spent.
It just falls post-2008. Nothing like this is in history.
<thread> 🧵👇 #bitcoin
2. Even in high inflation periods like the 80s, money has never been created this inefficiently. This is due to how we view recessions.
Recessions are required. They purge inefficiencies. It's bad for politicians though, that are more worried about access to a pension.
Recessions are required. They purge inefficiencies. It's bad for politicians though, that are more worried about access to a pension.
3. So they decide to game the system. All they need is positive GDP growth, right? It doesn't matter where or how it impacts society.
So they print money. A lot. And they keep doing it, with inflation being the only goal. Inflation comes from velocity though, not volume.
So they print money. A lot. And they keep doing it, with inflation being the only goal. Inflation comes from velocity though, not volume.
4. When inflation didn't come, they kept printing. If you print more, people will get the money and they'll consume more, pushing velocity up, right?
Except few people can get more. Remember. The economy is only superficially improved. Only a few really capture the majority.
Except few people can get more. Remember. The economy is only superficially improved. Only a few really capture the majority.
5. These few people are now making so much money, they can't allocate it efficiently.
So they look for ways to protect themselves, knowing the government will print more. They attack sensitive industries that are required.
Housing is the best example.
So they look for ways to protect themselves, knowing the government will print more. They attack sensitive industries that are required.
Housing is the best example.
6. What's the government's solution to housing becoming a financialized asset, and difficult to get for the average person unable to capture the printed wealth?
Before you answer, keep in mind the people elected are indistinguishable from folks that escaped a brain injury ward.
Before you answer, keep in mind the people elected are indistinguishable from folks that escaped a brain injury ward.
7. Right. They decide to print more. Both Biden and Trudeau are rolling out plans to get people with low incomes access to more credit.
Not more money. More credit. They won't make more money through an improved economy that targets them for long-term prosperity. Just debt.
Not more money. More credit. They won't make more money through an improved economy that targets them for long-term prosperity. Just debt.
8. They want them to borrow more of their future earnings to pad near-term growth.
Now everything is a bubble, and you need to compete for shelter with a guy halfway around the world who wants to use it as an NFT token.
Now everything is a bubble, and you need to compete for shelter with a guy halfway around the world who wants to use it as an NFT token.
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