Recently, the Bank of America highlighted the fact that the economic stimulus being planned by the governments across the globe could result in unprecedented economic overheating that once occurred . This is a situation that played out in post-WW1 Germany and was described by Michael Hartnett, who is the CIO of the bank, as “most epic, extreme analog of surging velocity and inflation following the end of war psychology, pent-up savings, lost confidence in currency & authorities.”
In this period, the German economy witnessed an hyperinflation that led to a loss of confidence in fiat currencies and the government generally.
Renowned American investor, Michael Burry, who correctly predicted the US housing market crash of the mid-2000s, tweeted that the current world is beginning to witness what panned out just before Germany saw one of the most explosive hyperinflation in history. According to him “the US government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket.”
The US government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket. #ParadigmShift https://t.co/kNT4memOVt pic.twitter.com/Bdw1CDn3Yf
— Cassandra (@michaeljburry) February 20, 2021
Burry added that he was making this warning now so that posterity could judge that he made attempts to call the attention of the authorities to this coming “hyperinflation.”
Burry’s Warning is an Indication of the Need for Crypto
Notably, long before Burry or the Bank of America began highlighting the coming danger of inflation, many crypto users had the foresight and have been investing in the industry as a way of hedging against this possible inflation.
Elon Musk, whose company recently invested over $1 billion in Bitcoin, had long tweeted that the stimulus package of the government is not in the best interest of the people. He has also consistently maintained a public stance against printing more fiat currency and he recently also said that only a fool wouldn’t look elsewhere especially when fiat currency has a negative real interest.
Another government stimulus package is not in the best interests of the people imo
— Elon Musk (@elonmusk) July 24, 2020
At the end, the warnings of Burry and the Bank of America only points to the need for the wider public to adopt crypto assets like Bitcoin and others to better protect themselves against this coming inflation.