I probably shouldn't have started of directly with the bitcoin angle. I fully acknowledge that I'm wrong all the time about many things and a lot of my ideas are bad, so it's certainly possible that I'm wrong about bitcoin as well. My intent is to just have a discussion so I can learn more.
What I really wanted to focus on was the future of our monetary policies. If this isn't the place to discuss it then so be it and I can accept that. But, at the moment it seems that we are almost certainly headed into a recession, the first one in 13 years (discounting the one quarter after the covid crash).
It's not guaranteed that this recession will be as severe or worse than 2008, but it's certainly not out of the realm of possibilities. It's not something most people like to think about, but as someone who works for himself I have to think about these and plan for them to avoid getting wiped out. Again, if this is not the place to discuss it then so be it.
IF it is an extremely severe recession (2008 or worse for example), then what will most likely happen is we get more bailouts, and more money created to "soften the blow". I say that because that's what the response was in 1987, 2000, 2008 and 2020.
If it turns out that this recession is much more severe then governments across the world are going to have a decision to make:
1. Let the economy crash, have people lose their jobs, and homes, and businesses on a scale unlike we've ever seen in our lifetimes, not to mention default on their own government debt when tax revenue drops, or...
2. Bailout everyone using "borrowed" money from the central banks (which is just new money created that will never be paid back in full), which would almost certainly result in inflation, and probably even higher inflation than we are experiencing right now.
Historically, going back 500 years, when governments are in this situation, they always go for option 2. They didn't create the situation, they just inherited it from their predecessors, but they do have to deal with it and do what they think is best for the people (and get themselves re-elected). Historically that means that they believe that it would be easier for people to accept inflation than losing everything.
If (and I can't stress the "IF" enough) we are now at that point, then I fully expect all governments including our own to choose inflation, which would reduce the number of defaults but ultimately sacrifice the currency.
Canada is in relatively good position compared to most other countries, but certainly not immune to this. Poorer countries with lots of debt will almost certainly see their currencies collapse if this recession is that severe.
So my question is, when this happens, whether it's this year or 20 years from now, what then? I obviously have my own ideas about what I think might happen, but other people see this from another point of view and I would like to know what they think - I like finding out when I'm wrong about things as it improves my perspective.
Last edited by LightingGuy; Jun 24, 2022 at 3:56 PM.
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