Zero USD intrinsic value is setting up Bitcoin (BTC) according to Bloomberg Jared Dillian. While central banks continue “mass paper money printing” the market leader crypto also faces inflation.
Dillian has taken the U.S. Federal Reserve and other central banks to task after it became clear that they are printing money. This comes at a time when the coronavirus pandemic is causing havoc to the global economies. Due to the multi-million stimulus packages, Dillian says traditional money is losing value leading to “zero USD intrinsic value”. He adds:
It’s not crazy to think government spending may reach $10 trillion- for just one year! And the numbers will go up from there.
Dillion sentiments appear to contradict Waren Buffet’s assertion that Bitcoin has no real value in mid-February.
Is Fed creating zero USD intrinsic value?
The “money printer” meme doing rounds could be a just a tip in the iceberg. The Fed could be printing more cash to cushion the coronavirus blow on the economy. This might work to slow down the pandemic but the effects will linger on for a while and may watter down the USD intrinsic value.
After unveiling the QE plan on March 23, the global largest bank was criticized by PlanB, an anonymous Netherlands economist and the creator of S2F who argued that the Fed has chosen to go the ‘Zimbabwe route” by printing more money.
In a 60-minute interview that has since gone viral, Neel Kashkari, an American banker has blamed the US Federal Government of stashing an ‘infinite amount of cash’. Despite the criticism, the Fed is not responsible for the creation of spending power but lends money for other assets including treasury bonds.
Though there is still a possibility of inflation, Dillian says it is not possible to predict the impact the COVID-19 pandemic will have on the economy. Coronavirus is an emergency and the dollars spent on it are for a good cause.
Using the USD to stand for a reserve currency is not likely to go the Venezuela or Zimbabwe hyperinflation way. What might happen is the rate of inflation to head north. Consider this perspective:
In our present day, it just so happens that the best stores of value are also those that have some element of utility as a commodity. The key distinction here is that gold, real estate, or any form of commodity money, is not a store of value because of its utility as a commodity, but despite that utility!
Bitcoin has no “intrinsic value” as a commodity, but that’s a great thing for Bitcoin (and the rest of the world).