Australian Reserve Bank Blasts Money Printing: ‘There’s No Free Lunch’

CoinTelegraph

Australian Reserve Bank governor Philip Lowe has taken a swipe at the concept of money printing, as further fiscal stimulus measures are rolled out in the country amid the ongoing pandemic.

In a speech in Sydney on Tuesday, the central bank boss said the government could borrow “on very favorable terms” and said public debt was currently much lower than in many other countries. Calls for money printing are misguided he said:

How To Get Free Crypto  

“There is no free lunch. The tab always has to be paid and it is paid out of taxes and government revenues in one form or another […] The message here is that somebody always pays.”

Dr Lowe, who has headed the RBA since September 2016, made the comments following the announcement of extensions of emergency social security measures that will cost an additional $AU20 billion ($US14.2bn), according to reports.

No free lunch with money printing

Lowe is opposed to following the US Federal Reserve’s strategy of rampant money printing, and is adamant that monetary financing of fiscal policy is only appropriate if the government could not influence the amount of money the central bank created, and where government debts were very high.

The RBA is not totally adverse to modern monetary theory, however, having repurchased around $AU50 billion ($US35.6bn) in state and federal government bonds over the past three months, while slashing interest rates to a record low 0.25%. Lowe ruled out negative interest rates in his speech on Tuesday.

Safe haven narrative strengthens for Bitcoin

Fiscal stimulus packages that involve printing more money are seen as good news for Bitcoin holders as they strengthen the underlying safe haven narrative due to its nature as a finite asset. Digital asset manager, Charles Edwards, commented this week on the U.S. stock market hitting new highs while the country was still in recession:

Coinbase Banner  

“This is the power of exponential money printing. Your dollars in 2020 are worth 28% less than 2019.”

He said overvalued stocks contrasted with undervalued Bitcoin, adding that, in his opinion, it is just a matter of time before the money floods into Bitcoin.

European leaders strike $2 trillion stimulus deal

In related news, EU leaders have agreed to a 750 billion Euro ($US865 billion) recovery fund, with the money to be borrowed on financial markets. Just under half of it will be distributed in grants to the hardest hit EU states.

The European Commission also agreed upon a new EU budget of nearly 1.1 trillion Euros ($US1.27 trillion) for the 2021 to 2027 period. This creates a combined spending power of approximately $2 trillion USD.

Go to Source
Author: Martin Young


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

FreeBitcoin Banner  

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.