Bitcoin the Answer to Monetary Debasement?

As central bankers around the world get set for a prolonged period of monetary debasement, the 99% could look to Bitcoin for protection.

A Decade of Monetary Debasement Looms

The European Central Bank issued guidance at the end of last year that it would keep “the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to — but below — 2%.” The ECB cited weak, although stabilized, GDP growth in the Euro area of 0.2% quarter-on-quarter to justify its inflationary monetary stance.

President Trump has famously called for Federal Reserve Chairman Jerome Powell to weaken the dollar, with a tweet in July arguing that:

“China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games — as they have for many years!”

Fed’s Efforts to Stoke a Flailing Economy

In the wake of the Global Financial Crisis of 2008, the Fed made five percentage points worth of interest rate cuts, to rates approaching zero. It embarked on a quantitative easing package to stimulate the economy, buying bonds among other means. Yet the recovery from recession was weak and drawn out.

Despite a stronger economy and near full employment levels, the Fed remains concerned about growth. Interest rates remain low, sitting now at 1.5 to 1.75%. In the event of an economic crisis, it has little wriggle room to stimulate activity.

From Roubini to the Gini

Nouriel Roubini infamously railed against cryptocurrency, with one of his more notorious accusations coming at the end of 2018. The economist argued that Bitcoin was less equitable than North Korea:

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