I like it bloody.

And, it looks like it is going to lose a lot of blood at this stage.

The inflation rate hit 9.1% and after increasing the total money supply by about 40% over the last two years, they are still surprised by this. Lol, the "incompetence" is astonishing.

Our incompetence, that is.

They know exactly what they are doing.

For example in Australia, the government pumped 20 billion into getting those struggling to get into the market, a home. The problem? Well, they gave they printed that money up, but they did nothing to increase the supply of houses, so what anyone should realize would happen, happened. Prices of houses went up dramatically, making it even harder for the people who were trying to get in, to get in. Who benefitted, the same as always, the people who were already in. Massive profits for home owners and investors - massive costs for everyone else who had to take on higher debt.

Oh, but debt is okay, because the interest rates are so low.

Yeah, but those interest rates go up when inflation increases as it is the only mechanisms the central banks have to control it and, they just printed 40% more money supply, saying "printing money like water doesn't cause inflation". So now, all those new home buyers are lumped with a high debt load after buying the peak, the interest rates are rising pushing them to breaking point and, the value of the house they bought is crashing.

Sweet!

But don't worry.... We are entering into the...

DoomLoop

OOOooooooooooohhhaaaaaaa

It sounds ominous.

But, according to Arthur Hayes who is the ex-CEO of BitMex, $1 USD being equal to €1 Euro, is the signal needed to pump up the value of Bitcoin to 1 million. This is actually not hard to do, all that really needs to happen is that the governments keep printing money to dilute the supply until 1 million dollars buys a carton of milk and BTC will have parity.

But really, there is "some" sense to this hopium, because it leverages the sheer incompetence of governments to manage themselves in way that is for the benefit of the average person, or other governments. Essentially, the DoomLoop, is summed up here:

Hayes’s doom loop scenario sees the Euro and US dollar both depreciating in favour of “hard” savings commodities such as gold and Bitcoin, with central banks resorting to yield curve control (YCC) amid out-of-control inflation.

Elaborating further, Hayes wrote: “as gold succeeds so will Bitcoin … Why should any central bank ‘save’ in any Western fiat currency, when their savings can be expropriated arbitrarily and unilaterally by the operators of the digital fiat monetary networks?”

I didn't know what Yield Curve Control was, but have had a bit of experience with curves on Steem and Hive in the past, so looked it up: Investopedia

Sounds like fun. Especially this part in the "disadvantages" section at the bottom.

Moreover, YCC could spur companies to increase their already heavy debt loads, while punishing pension funds and other savers.

Read all those articles about "topping up your retirement funds" with extra? Well, now that it is in there, if they introduce YCC, it will be bled out nicely. Awesome!

More blood.

Love it. Live it. Drink it.

So, if the DoomLoop is correct, the savings in fiat currencies by central banks will become even more unattractive, because the "owners" of those currencies can devalue it at their whim and on a very short time frame like two years (short in reality, not in crypto). So, instead of this, the central banks will have to look for alternative resources, which means... gold and (with hopium) Bitcoin (and hopefully other digital assets).

Now, I don't know about Bitcoin being worth a million dollars anytime soon (Hayes did say "this will take time"), but I do think that we are entering into unchartered territories in so many ways economically, that something has to happen. The wheels are going to come off the box car whilst hurtling down the hill and the economy is going to spill all over the road, with broken bones, lost limbs and...

Blood everywhere!

But, the thing with financial economies is that they are man made and are driven by the laws of supply and demand. What this means is that as long as humans are around to trade, they will always recover. But, this recovery doesn't mean that they will always stay in the same form and follow the same applied rules.

Essentially, like a blockchain fork that changes the code, the code of the economy is always changing too and has always done so. Economic disruption is not new, nor is economics as a whole and it has all changed over time many times before, sometimes for the better, sometimes for the worse but, it has always driven us in the general direction of technologically forward.

That is interesting, isn't it?

No economy in the past has had at its disposal what we have at ours now and we have the power to act as our own financial agents anywhere on earth, literally in the palm of our hands. This is an incredibly interesting time to live, because unlike those who have come before us, we are able to connect and interact with each other instantaneously anywhere on earth. This means that the way we manage ourselves is driven by how we gather with each other and collaborate and, we aren't bound to the arbitrary lines of nations, because we are able to build communities globally.

This fundamentally changes the economic activity possible and, the way it needs to be managed, in the same way that Keynesian economics never factored the likes of Amazon and Google type companies and the way they operate in the economy. Now, Adam Smith was all about limiting government intervention and increasing free market systems, but has that been the way it has gone over the last decades? Not at all - the "free market" is not free at all - it is engineered by the governments to suit their purpose, a purpose that suits the narrow few.

So, now that we have the tools and are able to manage ourselves, what is going to happen? Well, isn't it funny that the DoomLoop relies on the central banks shifting their savings strategies away from themselves and into systems that are decentralized? Well, it makes sense because like it or not, the only reason that anything has value, is because it is backed by demand. So at the end of the day, no matter what the governments and the banks do, if we change our consumer habits, they have to fork their codes too, in order to capture demand.

This is competition in action, but for the first time in history, it isn't the competition between two products, two companies, two teams, two nations - it is the competition between the centralized economy and, the decentralized economies.

It doesn't matter if Bitcoin ever reaches a million dollars or not, because that marker point is based in fiat, which is quickly becoming irrelevant as an indicator of anything. What matters is what value it has in trade between people and in terms of economic integrity, whether it can be trusted.

Interesting - for a trustless system.

Economies are always in a constant push and pull process of bleeding and healing, but what the hope is, that more balance can be found so that it isn't the masses that are doing all the economic bleeding, while the select few do all the healing.

But, due to fear and economic illiteracy, changing people's behaviors to support a decentralized economy, is like getting blood from a stone, instead of a nice, juicy slab of

steak.

Stake.

Taraz
[ Gen1: Hive ]