In June more money than in the first two hundred years since its founding was issued by the US Federal Reserve — money that was used to fight British imperialists, buy Alaska and the Louisiana purchase, end the great depression, win World War Two, create the Interstate Highway System and go on the moon.
Pantera Capital CEO, Dan Morehead, announced in a letter to investors on 29 July that the United States has been printing disturbing money to combat the lockout and the pandemic-induced financial crisis.
“In June, in comparison to the first two centuries after its founding, the United States printed more currency,” Morehead wrote. “The U.S. budget deficit – $864 billion – was higher last month than the overall debt that existed between 1776 and the end of 1979.”
Morehead also compared in recent months the impact of money printing on how the corresponding currency has been in the course of centuries:
“We defeated British imperialists in the first trillion, purchased Alaska and the purchase of Louisiana, defied imperialism, ended the Great Depression, created the Interstate Highway System, and went to the Lunar River.”
The effects of Fed money printing are also disturbed by Goldbug Peter Schiff.
He commented that the Federal Reserve Chairman, Jerome Powell, used his “full range of resources” to respond to the pandemic this week: printing the currency, keeping interest rates close to zero and making asset purchases continuously at $120 billion a month.
“The U.S. is about to experience one of the world’s biggest inflationary times,” Schiff said on Twitter. “The Fed ‘s reputation would be lost. Notes from the Federal Reserve will soon be worth no Continental. “(Continental paper money was traded at 1% of its value at once for treasury bonds)
Inflated prices too?
While there are widespread concerns about inflation, many analysts expect that consumer prices will eventually go through a cycle of deflation – exactly that’s what happened this week in Australia, where ABC News announced that the country’s consumer prices actually fell by 1.9% in June. Deflation has been record since the Korean War.
But many scholars believe that inflation is actually hidden in asset prices instead of consumer prices, and that money printing has helped the share market boom in the midst of the pandemic.
