Crypto in general has long been viewed as a sort of the antithesis of the traditional finance system, with central bank’s constant money printing and loose monetary policy running counter to the credo of scarcity that underlies Bitcoin.
The recent turbulence in the global economy, and the Federal Reserve’s reaction to it, seems to have further confirmed the importance and critical need for decentralized digital currencies.
Fed Chairman Jerome Powell further confirmed the imperative nature of crypto in a recent interview, in which he explained that the Fed is “not going to run out of ammunition” – a comment that lends credence the widespread “money printer go brrrr” meme that is currently spreading across social media.
Fed confirms that they have unlimited cash reserves in a recent interview
Although it has never been a secret that the Federal Reserve essentially has unlimited money, it is often something that they have been rather discrete about.
This is emblematic of the fact that sitting Fed Chairmen rarely give interviews, with their words holding significant power that can sway markets.
In spite of this, Federal Reserve Chairman Jerome Powell recently gave one of these rare interviews with NBC’s Today show, in which he told the host that the Fed running out of buying and lending power simply “doesn’t happen.”
“We will keep doing that aggressively and forthrightly, as we have been… When it comes to this lending we’re not going to run out of ammunition. That doesn’t happen.”
The lending he is referring to is the Fed’s massive multi-trillion-dollar plan to help bolster the economy and keep credit flowing properly, with this plan encompassing bond purchases, direct business lending programs, and more.
Fed’s admission of having unlimited monetary supply a striking endorsement of crypto
One of the hallmark traits of Bitcoin – the original crypto – has been its limited supply, with its regular mining rewards reductions acting as deflationary measures to ensure that the release of unmined BTC is predictable and fixed.
This runs counter to the traditional financial system’s loose monetary policy that entails constant inflation and unpredictability.
Powell’s claims regarding having an unlimited supply of “ammo” to combat the ongoing economic decline is startling, as it shows just lacking in value fiat currencies are.
Although in the short-term the injection of freshly minted money into the economy will likely bolster it, the long-term impacts of these policies are grave, and may set the stage for an implosion of the current financial system as we know it.
This potential implosion may, with time, usher in a societal shift towards decentralization that favors crypto.