Buying Bitcoin Is Front Running The Money Printers

in LeoFinance2 months ago

Hey Jessieconomics advisors

2020 was a year of money first for all of us, and probably one of them that went a tad under the radar is that the world created more new units of money last year than it ever did in previous years.

Has it helped?

I am not sure, but they keep doing it, and I doubt it will slow down in 2021.

If anything that we all still happily allows it to happen without much protection and many actually support unsound money and the policies running, it means that there is very little will power on the side of restraint.

The desperation of governments wanting to get the economy up and running means they will be willing to sacrifice their currency to fund anything they feel will stimulate growth.

If it cost a billion to generate a 250 million extra in GDP, you bet they're going to do it, even if the returns continue to diminish with each canon of cash shot into the economy.

moneyprinter.png

What is the M2 Money supply?

One way we can look at how much money is sitting around chilling waiting for newly minted friends to join is via M2 money supply.

M2 is a calculation of the money supply that includes all elements of M1 as well as "near money."

  • M1 includes cash and checking deposits,

  • Near money refers to savings deposits, money market securities, mutual funds, and other time deposits.

These assets are less liquid than M1 and not as suitable as exchange mediums, but they can be quickly converted into cash or checking deposits according to Investopedia.com.

M2 Money is basically things we invest in from stocks, EFTs, derivatives, it's money in a different vehicle, and all have their own markets where they are traded.

When new money is created, it often takes it's formed in the shape of a security like a bond, and through various investment strategies gets transformed into things like equities.

How Bitcoin is reacting to new money

Source: Twitter: Eric Wall - @ercwl

If we look at a Bitcoin chart vs the growth of M2 money supply, you'll notice that BTC is slightly ahead of that growth. These indicators are not definitive by any means, but it sure does look like Bitcoin is trying to front-run the expansion of the money supply.

As new money is created, Bitcoin is responding and keeping its holders at a higher return than the increase in supply.

I know this means nothing because it's all about the velocity of money and how it generates GDP which Bitcoin is probably pretty rubbish at doing right now. Still, like a savings tool and hedge against debasement, it sure looks like it's responding favourably in these conditions.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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The money printer is going to speed up all year, I'm so glad that I saw this coming many years ago. I'm sure the precious metals will kick ass this year too!

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I have no doubt assets will all do well when the thing you measure it in is falling like a rock! I think we should start actually having a distraction between the two like the savings economy and the borrow debt economy and not treat all money the same

So if you want to save you buy these things if you want to borrow you use this medium and educate eveyeone on how to get the best out of finance

I don’t feel like it’s a victory to be hedged only for others to have a shit time about it that’s not winning to me

Sorry can you speak louder, I can only hear BRRRRRRRRRRRRRRRRRRR :D
Agree that BTC will rise and act as a protection of currency devaluation.

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LOL it's pretty loud in here, but then again, have you heard what Bitcoin miners sound like? Pretty much the same lol

What ? BTC is not mined by nerds in their room anymore ? haha

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LOL but we did try, my friend and I tried mining ETH back in the day and it honestly sounded like the place would explode

Hahaha like your computer is being possessed by a demon

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who would give up at least one bitcoin)
Many people sell apartments to buy it.
I don’t worry about the cold winter, the climate in Russia and Ukraine is almost the same, so I know how to keep warm.
I will ask my mother to knit a hat, scarf, and mittens for you) You will be like a milk bear at the North Pole)

I’m not giving up any of my Bitcoin I just need 2 more and I think I won’t have to work every again 😁

LOL you know how we keep warm? The ☀️ sun don’t have to think about cold! You can’t make a brown bear into a polar bear okay? I don’t care how thick those scarfs and mittens are I don’t like the cold

Interesting thoughts about the M2, I didn't know they could be called that. When the EU money goes brrrrrrr....the money in Nigeria goes brrr brrrrrrrr brrrrrrrrrrrr brrrrrrrrrr and guess where it goes? Pockets of politicians and govt officials. 👏crazy isn't it

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LOL well when eveyeone is trying to remain competitive they all gotta print to keep up with the last guy abs since trickle down doesn’t work the ones closest to the printer pocket the gains!

It’s so crazy that we’ve allowed this to go on for so long and that we don’t question it every few people do, but they all too happy to participate

We’re all at fault really

My brother some who have tried to question it have gone missing 😂😂😂its not funny but..... Now everyone just murmurs in their corners

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They gonna print more dollars and halve more bitcoins increasing value every next 4 years

2 forces smashing one another at the same time, you can be sure that it's going to be a crazy ride for all of us involved in Bitcoin

Printing more money is negative and mining more butcoin means the increase in price thats the beauty...

Lol totally, it's like a match made in heaven, you'd think the governments WANT bitcoin to succeed the way they print, but it's all coming together nicely

Either way, you'll need ear defenders if you're printing fiat or mining Bitcoin - both are excessively loud! Heard those Russians are setting up a mining farm in the Arctic Circle now! Should melt whatever is left of the ice caps!

Bitcoin mining farms are the only place I'd want to be during a Russian winter, I am not made for - temperatures, this is not the African way.

Lol then it's a 2 bird 1 stone for them since it will open up new shipping routes and they can tell the EU to suck it, which no doubt Putin would love to do!

lol