T he money printer goes brrr, and the hyperinflation is hiding under our noses. Since the global financial crisis, 2007 — 2008, money is printed on

There is no such thing as a financial bubble; hyperinflation has already arrived.

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2021-05-20 14:43:55

T he money printer goes brrr, and the hyperinflation is hiding under our noses. Since the global financial crisis, 2007 — 2008, money is printed on an unknown scale. Initially, this was done to give us time to solve our financial markets’ problems, but that never happened. I will explain what is happening with the financial system now from my perspective and present it so that people without an economics degree also can understand what is happening. I restrict myself to the US and Europe, and nothing in this article should be used as investment advice.

The global financial crisis has never been really solved. We are now in another financial crisis because of the measures taken because of COVID-19, and we made our money printers print even more money. The scale is almost beyond imagination; estimates are that 22% of the circulating US dollar was printed in 2020. The US Federal Reserve has injected more than $ 9 trillion (10^12, 1,000,000,000,000) into the market since September 2019. The European Central Bank has put up a €750 billion Pandemic Emergency Purchase Program (PEPP). This is all added to the trillions already put into our economies because of quantitive easing programs since 2008–2009.

The `gold exchange standard´ was established in 1944 by the Bretton Woods Agreements. Under this system, many countries fixed their exchange rates relative to the US dollar, and central banks could exchange dollar holdings into gold. All currencies pegged to the dollar had a fixed value in terms of gold. In 1971, US President Richard Nixon ended the US dollar’s international convertibility to gold (the `Nixon Shock´). The consequence is that there is no relation anymore between your money and gold. Before, to print money, there had to be a backup of gold, with automatically made that there was a limit on what countries could print. After 1971 this relation did not exist anymore, making it possible to print money without any backup. And this is why now the printer goes brrr, and there is no limit to what the Federal Reserve or European Central Bank can print.

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