A Deflation SuperCycle: Not Likely To End Any Time Soon
Tell me if you heard this one: central banks printing money is going to cause hyperinflation.
To believe in that means one believes that a single factor has severe impacts on global economic and financial markets. It ignores variables such as sanctions, recessions, supply/demand, wages, and growth to name a few.
In this video I discuss how people who are bullish on Bitcoin simply because they believe we are going to see hyperinflation, especially in the USD, are missing the mark.
Here is the article mentioned in the video:
https://cointelegraph.com/news/blocktowers-cio-predicts-hyperinflation-could-send-bitcoin-parabolic
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I fully agree. I'd also like to add that because of the economic crisis, money creation in the private sector has going down drastically. Commercial banks are not issuing loans nearly at the same rate they used to. Still, all the BTC maximalists and gold bugs are fixated on what the Fed is doing.
Summary:
In this video, Taskmaster4450 shares his views on the misconception of hyperinflation, particularly within the context of Bitcoin and cryptocurrencies. He challenges the notion that money printing automatically leads to hyperinflation and explains that various factors influence economic stability. Taskmaster4450 emphasizes the deflationary impact of technological advancements and the digitalization of society. He discusses the potential shifts in economic paradigms, the impact of innovation on the financial system, and the evolving nature of cryptocurrencies. Taskmaster4450 also touches on the repercussions of the COVID-19 pandemic on the economy and the potential changes in consumer behavior and economic output.
Detailed Article:
Taskmaster4450 delves into the misconception regarding hyperinflation triggered by money printing, particularly in the context of Bitcoin and cryptocurrencies. He critiques the belief that excessive money supply automatically leads to hyperinflation, highlighting the multifaceted nature of economic factors that influence inflation. He points out that inflation and hyperinflation result from a variety of factors such as supply and demand, economic activity, sanctions, and wages, debunking the linear correlation between money printing and hyperinflation.
Furthermore, Taskmaster4450 emphasizes the long-standing deflationary super cycle that the global economy has experienced over the past four decades. He draws attention to the significant shift in interest rates from the double digits in the 1980s to negative interest rates on sovereign debts in the present day, underscoring the role of central banks in combating inflation through interest rate adjustments.
Taskmaster4450 also explores the deflationary impact of information technology on the economy, pointing out the increasing percentage of global economic activity governed by IT laws. He discusses the potential hyper-deflationary effects of certain technological advancements like AI and image recognition software, highlighting the rapid deflationary trends in the IT sector.
In addition, Taskmaster4450 addresses the evolving financial landscape and the role of cryptocurrencies as an alternative to traditional financial systems. He predicts an expansion in the cryptocurrency market due to the evolving economic needs, technological advancements, and insufficient money supply in the current economic environment. Taskmaster4450 speculates on the potential market cap growth of Bitcoin and envisions cryptocurrencies becoming integral to the digital economy.
Moreover, Taskmaster4450 reflects on the changing consumer behaviors and economic paradigms, particularly in the wake of the COVID-19 pandemic. He discusses the impact of fear-induced reductions in consumer spending, demographic shifts like an aging population and declining birth rates, and the subsequent economic consequences.
In conclusion, Taskmaster4450 reiterates his belief that Bitcoin serves as a store of value while other cryptocurrencies may function as a medium of exchange. He emphasizes the intrinsic value of cryptocurrencies, the pace of innovation outstripping traditional monetary mechanisms, and the challenges central banks face in keeping up with digital advancements. Taskmaster4450 closes by encouraging his audience to consider the dynamic nature of the economy, technological advancements, and shifting consumer behaviors in understanding the future of cryptocurrencies and the financial system.