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RE: Creating Money Out Of Thin Air Is Magical

in LeoFinance3 years ago

crypto printer go brrrrrrrrr

hahaha nah this actually makes a lot of sense. The only money being injected into the economy is when someone takes out debt. That pretty much means if no ones taking out loans inflation is going to be very low. While times of barrowing lots will increase inflation is that right?

It's pretty awesome what crypto is able to do even more so what DeFi is becoming. We are not even a full year into it yet but I expect some new cool stuff coming out for it here in the next few months as new investors and project creators step in.

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That pretty much means if no ones taking out loans inflation is going to be very low. While times of barrowing lots will increase inflation is that right?

It is more nuanced than that. For example, in times of high borrowing, if there is a lot of economic growth, then yes it can result in some upwards pricing pressures. Of course, be careful about the part of technology in there, especially when it comes to keeping wages under control.

However, if the borrowing is done in a period of economic stagnation, resulting from most of it coming from government, then we see the opposite effect. Part of the problem is the Fed starts its easing process which actually works in reverse and locks money into the banking system, like we have now. The more that is locked in there, the slower the velocity of money which is catastrophic to the push for inflation. Another reason they the Fed finds themselves backed into their own self-imposed corner.

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