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Dollar Devaluation: The Race To The Bottom
Every fiat currency has died. The only question is, how long will it take?
The US money supply is growing exponentially, and it won't be long before the country is printing an incredible $1 trillion every week. In a thread on Twitter/X, CFA and crypto analyst Timothy Peterson unpacks the data that shows the accelerating rate of M2 growth.
What Is M2?
M2 represents the most liquid part of the money supply, and includes all elements of M1 (instantly-available money including physical currency, demand deposits, and other liquid assets), plus assets like savings accounts, time deposits, and retail money market funds. As such, it's a helpful gauge of the overall liquidity and financial health of an economy, providing insights into what funds are available for spending and investment.
Accelerating Money Printing
Peterson notes that current US M2 money supply is over $22 trillion, but that this number is growing exponentially. In fact, while half of all money was created in the past 10 years, a quarter was created in just the last three.
At the current average rate of printing, another trillion dollars is created every 70 days, or 10 weeks. However, the more money is printed, the faster the money supply grows. If the equation holds, then the US will be adding $2 trillion to M2 every week within the next 15 months.
Peterson also notes that this phenomenon is not simply an anomaly of the last 40 years, instead being a pattern that goes back millennia. Debt, money "printing" or debasement, and inflation have been a feature of many civilizations over the past several thousand years. State-controlled currencies always tend to lose against hard assets.
History says this all ends badly. The "winners" are those who correctly identify and adopt the new #economic / #currency system before the decline of the old one spirals out of control.
In our case, he says, Bitcoin is the hard asset that offers an opt-out to those who recognize the trend for fiat currency is firmly against them. In a recent blog, BitMEX CEO Arthur Hayes reaches a similar (if more verbose) conclusion as he asks: "As we ponder the ongoing fiat debasement, what is the best way to profit off of the demise of the filthy fiat financial system? What is the best expression of this trade?"
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