{"id":18519,"date":"2023-03-09T19:56:13","date_gmt":"2023-03-09T19:56:13","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/pay-attention-to-qt-and-the-money-supply-economics-bitcoin-news\/"},"modified":"2023-03-09T19:56:13","modified_gmt":"2023-03-09T19:56:13","slug":"pay-attention-to-qt-and-the-money-supply-economics-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/pay-attention-to-qt-and-the-money-supply-economics-bitcoin-news\/","title":{"rendered":"‘Pay Attention to QT and the Money Supply’ \u2013 Economics Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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During the Covid-19 pandemic, central banks such as the U.S. Federal Reserve loosened fiscal and monetary policy. Now, these same financial institutions are seemingly engaging in quantitative tightening (QT) practices. According to Nick Gerli, CEO and founder of Reventure Consulting, \u201cthe money supply is officially contracting.\u201d This has only happened four times in the last 150 years. Gerli warns that every time it occurs, a depression takes place with double-digit unemployment rates.<\/strong><\/p>\n

The Contraction of Money Supply and its Impact on the Economy<\/h2>\n

Several market analysts and economists are uncertain about the future of the economy, while many believe things will soon get worse<\/a> due to significant inflation and failures in central planning. When the Covid-19 pandemic hit, the U.S. government and many other nation-states worldwide financed trillions of dollars<\/a> in debt to sustain the economy. The debt has grown to colossal levels, and many believe it could sink several Western economies. Speculators insist that this will harm the dollar and that only hard assets will survive the fallout.<\/p>\n

In a recent interview<\/a> at the 2023 BMO Metals, Mining, & Critical Minerals Conference, Rob McEwen<\/a>, executive chairman of McEwen Mining, said, \u201cHard assets will increase in value as the dollar drops in relative value to other currencies because governments are irresponsible. They steal from their citizens by printing excess money and borrowing in ways they shouldn\u2019t \u2026 Look at the amount of debt most of the Western world has right now; it\u2019s enormous.\u201d<\/p>\n

On March 8, 2023, Nick Gerli<\/a>, CEO and founder of Reventure Consulting, warned<\/a> that the money supply is contracting. \u2018The money supply is officially contracting,\u2019 Gerli said Wednesday. This has only happened four previous times in the last 150 years, and each time, a depression with double-digit unemployment rates followed.<\/p>\n

\"Expert
Picture shared by Gerli on March 8, 2023. Gerli\u2019s Reventure Consulting shares weekly insights on real estate and finance.<\/figcaption><\/figure>\n

The Reventure executive insists that when the money supply contracts while inflation rises, it creates a \u201cnasty combination\u201d because there are fewer dollars available to pay for higher prices, eventually leading to a deflationary crash.<\/p>\n

Gerli added<\/a>:<\/p>\n

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This is exactly what happened in the depression of 1921. (NOT the Great Depression). This occurred after WWI and the Spanish Flu. Where there were years of high inflation\/money supply growth. And then\u2026WHAM. 11% Deflation and the unemployment rate skyrocketed. All it took was a -2% contraction in the money supply in 1921 to cause that deflationary depression.<\/p>\n<\/blockquote>\n

The Reventure executive noted that there has already been a 2% contraction in 2023. Gerli says that this suggests that \u2018the resilience of our economy and the current inflation might not be as strong as people think.\u2019 However, Gerli admits<\/a> that there is still a significant amount of money circulating in the financial system in 2023, with the money supply being about 35% higher than it was pre-pandemic, at $21 trillion. Despite this, history shows that just a little nudge and depression and deflation could mount.<\/p>\n

\u201c[The] historical record is clear: Depressions\/Deflation don\u2019t need a \u2018linear\u2019 decrease in money supply to occur\u2014 It just needs to be a little bit. 2-4% contraction YoY \u2014 And then problems occurs,\u201d Gerli added<\/a>.<\/p>\n

Gerli thinks<\/a> that people are too focused on rate hikes<\/a> and not paying attention to quantitative tightening (QT) practices and the money supply. He thinks that at the current pace, the money supply will shrink more while recession fears are mounting and inflation continues to persist. \u201cThat\u2019s how you get a system meltdown and a deflationary depression,\u201d Gerli stressed<\/a>. The Reventure executive added that a deflationary depression in 2023-24 is \u201cnot a guarantee.\u201d Because governments are watching diligently, there is a possibility they might \u201cattempt to print money again, send stimulus checks, and re-ignite inflation\/economy,\u201d according<\/a> to Gerli.<\/p>\n

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BMO Metals<\/a>, borrowing<\/a>, Central Banks<\/a>, central planning<\/a>, Covid-19 pandemic.<\/a>, Critical Minerals Conference<\/a>, debt<\/a>, deflationary crash<\/a>, Depression<\/a>, Depression of 1921<\/a>, Dollar<\/a>, economists<\/a>, excess money<\/a>, Fiscal policy<\/a>, Government<\/a>, hard assets<\/a>, historical record<\/a>, inflation<\/a>, market analysts<\/a>, McEwen Mining<\/a>, mining<\/a>, Monetary Policy<\/a>, money supply<\/a>, Nick Gerli<\/a>, Quantitative tightening<\/a>, rate hikes<\/a>, recession fears<\/a>, Reventure Consulting<\/a>, Rob McEwen<\/a>, Spanish Flu<\/a>, speculators<\/a>, Stimulus Checks<\/a>, system meltdown<\/a>, trillions of dollars<\/a>, U.S. Federal Reserve<\/a>, unemployment rates<\/a>, Western economies<\/a><\/div>\n<\/div>\n

What do you think the government should do to address the possible contraction of the money supply and the threat of deflationary depression? Share your thoughts in the comments below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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