The economy of the United States has been tumultuous for quite some time now, and as time progresses, more and more people believe that a recession is upon us. The fears have been allayed due to the market crunch and the increased circulation of banknotes in the economy.
Economists have claimed that the problem is in the government going against the ‘supply and demand’ rule, with more and more notes being printed routinely. According to Rhythm, a Bitcoin proponent:
“The Federal Reserve had to loan banks the equivalent of 12,700,000 bitcoin last night to stabilize the financial system.”
Some people believe that the lack of transparency in the industry is what makes these developments scarier than it already is. The recent influx of cash into the economy has started another round of debates amongst supporters of cryptocurrency, with many asking the government to reconsider its stance on digital assets.
The general rule of thumb for countries has been that whenever a region begins to print more and more currency, inflation would be right around the corner. This has been a pattern that has been seen in countries like Venezuela and Zimbabwe, two countries that are currently buckling under the weight of hyperinflation.
The Federal Reserve Chief Jerome Powell had also spoken in public recently, telling the Congress that there will be no more rate cuts this year. He claimed that the US economy would continue to grow at a steady pace even though it faces risks from multiple quarters. Powell had stated:
“The federal budget is on an unsustainable path, with high and rising debt. Over time, this outlook could restrain fiscal policymakers’ willingness or ability to support economic activity during a downturn. Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2% objective as most likely.”
Many officials of mainstream banks have also given their opinions on the rate cuts with John Williams, the President of the Federal Reserve Bank of New York, adding that the recent cuts had left the benchmark interest rate low enough to support growth.
The main reason why crypto enthusiasts have pointed out the capital influx was because it went directly opposite to what naysayers of the crypto industry believed in. Several proponents of fiat currencies have repeatedly added that the digital assets industry does not have any value as it was based on disproven technologies. The Federal Reserve was also in the news recently for another round of capital loaning to banks recently.
Disclaimer: The presented information is subjected to market conditions and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.
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