Biden’s $6 Trillion Budget Could Fuel Inflation Fears And Bitcoin Gains
The president wants to print like he’s got his own bitcoin bags, and there is no end in sight to the monetary expansion expected to come.
When it rains, it pours. It appears that this is true for both weather and expansion to the monetary base of the United States. According to a report by the New York Times, “President Biden will propose a $6 trillion budget on Friday that would take the United States to its highest sustained levels of federal spending since World War II, while running deficits above $1.3 trillion throughout the next decade.”
Only a year ago, the pandemic began, and the Federal Reserve was forced to initiate a major stimulus for the economy via inflation and quantitative easing. Starting with $2 trillion, the stimulus package was supposed to enable the continuation of the American economy. Of course, the pandemic was simply a catalyst for increasing the already present inflationary practices of the Fed.
Inflation is a dastardly concept, not only removing value from the common people’s money, but giving access to an elite few the ability to create value out of thin air. Bitcoin Magazine’s “When More Isn’t Better: Inflation In The 21st Century,” by Sebastian Bunney, explains in detail how monetary expansion ruins economic growth and potential. And it isn’t simply the rampant inflation in the sense of more money that ruins the system, reducing interest rates and making credit cheap lead to long-term debt cycles, as explained by Bitcoin Magazine’s Dylan LeClair.
I explain in my own essay, “If You Don’t Buy Bitcoin You Can’t Be Rich,” that anyone holding cash right now is exposed to an astronomical amount of risk, as the entirety of their value resides in trust that the Federal Reserve will maintain belief in their system. But truly, the gig is up. Even elected officials have lost faith, such as Miami’s Mayor Francis Suarez who has admitted that the previously proposed stimulus of $1.9 trillion pushed him to buy bitcoin. Indeed, when articles are being written about the death of the US dollar, and billionaires are sounding the alarm that monetary policy is out of line with economic conditions, something is going drastically wrong.
With all of this, bitcoin is set to gain. Although it cannot be explicitly stated, the previous stimuli have often been seen as drivers of the bitcoin price bull run. And with coinciding upward catalysts such as the halvening, it appears that the economic environment for a sound money such as bitcoin to surge forward is ripe. It remains to be seen whether the $6 trillion proposal will be accepted, but it is obvious that further inflation is to be expected and should contribute to revitalizing the bitcoin bull market we are in.
