While bitcoin fans have long noted how fiat is devalued over time, bitcoin often appeared like a solution in search of a problem in this regard.
Central banks became the largest buyers of sovereign debt issuances and forced interest rates to artificially low levels.
Investors are literally paying debtors to take their money.
As owners of central bank-inflated assets over the past decade, these same investors profited from this dislocation, but now they are publicly shouting warnings.
The political independence of central banks has long been viewed as sacrosanct, a critical pillar of confidence for markets.
We've seen similar political pressure on central banks through both the developed and emerging world.
Like Pavlov's dogs salivating at the sound of a bell, investors have been well trained to continue betting on disinflation and USD strength.
Professional investors who tried to bet against central banks in the past decade had to give up that thesis or get fired for poor performance.
"The big question worth pondering at this time is which investments will perform well in a reflationary environment accompanied by large liabilities coming due and with significant internal conflict between capitalists and socialists, as well as external conflicts. It is also a good time to ask what will be the next-best currency or storehold of wealth to have when most reserve currency central bankers want to devalue their currencies in a fiat currency system."
Disclaimer: Ari is CIO of BlockTower, an investment firm, which may have a position in bitcoin and other cryptocurrencies.
With So Much Debt Around, Investors Need Bitcoin as a Reflation Hedge
Publicado en Dec 20, 2019
by Coindesk | Publicado en Coinage
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