Global money creation increased $ 15 trillion in 12 months

Charlie Taylor

Central banks are flooding economies with more money. According to data from Bloomberg, the world sees $ 15 trillion more in liquidity in just the past 12 months. money market, mutual funds and other time deposits. Since the breakdown of paper money and gold, governments have always had incentives to issue more money, but there are no precedents for the levels of money printing seen since the beginning. According to the CEO of Pantera Capital, in the United States alone, in June 2020 more money was issued than in the first two centuries of the country's founding. In fact, about a quarter of all US dollars in history were issued last year.


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In 2022, this movement did not slow down. With the arrival of Biden as president of the United States, trillion dollar injections of emergency aid were approved. Elsewhere in the world the trend is similar. In Brazil, for example, the increase in the money supply was even more intense than in the USA. As explained by the Cantillon effect, each person feels the consequences of the increase in the money supply differently. The first to gain access to the newly created money are benefited, while the last to see the color of the money will have eroded purchasing power. What happens is that monetary expansion ends up diluting the value of money, but only after some circulation in the market do entrepreneurs perceive the increase in demand and raise their prices.

Falling and predictable money supply

"The central bank must be reliable not to depreciate the currency, but the history of fiat currencies is full of breaches of that confidence.", Was what Satoshi Nakamoto said when presenting his idea of ​​creating a scarce digital currency. As an alternative to power centralized, Bitcoin came up with a cap of 21 million coins and a programmable monetary increase. Every 4 years, in an event known as halving, the daily emission of coins falls by half, regardless of the number of miners in the network.supply of bitcoins over timeThe result of this is a decreasing increase and considerable predictability, differing enormously between the growing and uncertain expansion of Organs central organs. In addition to the maintenance of bitcoiners' purchasing power offered by the scarcity of the currency, most analysts agree that the increasing injections of liquidity on the part of governments have benefited the bitcoin price.See also: Analyst predicts when Bitcoin bullish wave should end

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