Sorry Crypto Maximalists, But QE Is NOT The Devil - Alex Blum from Two Prime
So topic number one. qe Is not the devil, right so Wednesday teasing the central banks fancy word for create new currency and why call Keynesian model. So. We'll just looking at the. The nausea has crypto was born as a reaction to the two thousand eight financial crisis. We can talk about the you can talk about the positive implications for crypto markets that was kind of interesting. I see I would think that the Qe is will be seen as. Positive full crypto is just that what we expect to happen terms of light hyperinflation and then bitcoin going to the moon that's not been happening. Yeah. And with twelve years into bunkers levels of Qe. So can you speak on that? Yes. So I think to start I think a lot of people in the space very little trust for. Governments. Fans `institutions, which basically set monetary policy and end up printing. new money. It's not out of the world. A lot of the growth of Western economies has come from quantity quantitive easing, fractional, banking, fractional reserve banking, and so what this last to do is Basically. Create new acids new opportunities and and put money into things without having everything directly backed by a piece of gold or some other kind of hard asset Actually what's made it possible for our economy to grow post gold and post slavery as a different model I think we're things run into issues when you create this new money and it goes to a junk so. The Super Leverage Politics that have no real value generating a real value and you get this collapse in believer faith in that in the underlying and as well as claps and faith in the money that represents it, and so truly question of allocation. If you do to easing and give the money to chucky cheese dollars, you're GONNA have a problem if the money goes to space exploration and developing new medical research and helping the poor in a way that is reasonable and actually creates value than you have. Okay. You know banks. Currently, they do publication where their lending out money to people to buy real estate. For example, the recently generating that money themselves and then were getting the money returned to them through. The return of principal plus interest, and so you can basically create and get it back plus some if it's done correctly. So. In terms of its relation to crypto space I mean. In the last twelve years obviously bitcoin his done quite well in the last year or two a little bit more flats. It's tough to I. Think Today we look at like bitcoin why isn't going up more but it's pretty astonishing that it exists at all and that it was able to take flight, and so you know you can kind of see this risk premium or maybe a extra. Now the in the price of all this kind of uncertainty especially the early days of Bitcoin. By quantitative easing or new money helps to move into the space. That I think in terms of the. Performance recently and like its relationship to new money printing in the US, for example. I. Think it's. Very early yet to say, that money hasn't come into the space or you we might have seen a giant collapse so they're not been quantitative easing. It's tough to know what to compare it to necessarily but It's not surprising that there's a bit of lag or not an exact timing of like new dollars per did in twenty cents immediately goes Debbie Bitcoin obviously there could be some time lag. Structure Market. Dynamics. That caused the price do not move exactly the same moment and probably a good thing that it's not completely dependent upon the money supply for the price of Bitcoin number just be another leveraged financial product just like any other make bitcoin anything special unique. Okay. Isn't that the argument though like This there's a delay. In between the creation of new currency and having an impact on prices. And The. Question is I think they'll answerable question about. Eighty degrees of that economic effect. Happens. And be will. No. One can tell how long it takes. To to actually have a real effect on relation. In the the question. Show in the. Bitcoin. World. We all love. The fish supply, right Twenty one, million goings. Will ever exist right all twenty, one, million of mind. But we know that that is the absolute guarantee monetary policy. That's most people are into crypto four and it can be changed. You know technically you can change the rules of the network, but it require mass consensus, which is highly unlikely to ever get past right because the bitcoin would lose its value since that's One of the tenants everyone's into it for so just purely by simplifying it. If. There's a pile of twenty, million bitcoin. The. Ratio a prices ratio between one asset. Another right. So if you trade against US dollars, you have a ratio with dolls and wanted to on the other. And if you took old dollars in existence will bitcoin existence and credit ratio than you've got. A bitcoin price say, right. Now, if you increase the supply on one side of the equation, he changed the price.