You probably have heard that the Fed is printing money to prevent a new financial crisis. Did you know that for every $ 100, there are $ 20 of newly printed money?
Let’s take a look at what this could mean for the financial system and the near future.
FED and $ 9 trillion
American Fed printed the money because of the global coronavirus pandemic. The reason was clear and simple – to mitigate the possible consequences of the coming crisis. The Fed printed $ 9 trillion in last year only. This is about 20% of the total USD in circulation. The problem, however, is that the money was backed by nothing. We have already written about how the American financial system works.
This currency is no longer covered by any precious metals or any other value, but trust, and this allows the system to print an infinite amount of money. You also know that banks are trying to maintain the so-called healthy rate of inflation, which will ensure the necessary growth of the economy. Banknotes can be seen as printed paper that we trust. But this trust has been violated too many times in the history already.
Basically, these are the reasons, why we are currently seeing more investors in cryptocurrencies. Cryptocurrencies, especially Bitcoin, are currently taken as a safe haven against inflation, and during a pandemic, many people began investing in cryptocurrencies so that they would not lose their money. Due to these reasons, we can also see high inflation in 2021.
Reasons, why the Federal Reserve keeps on printing more money, are understandable, but at the same time they can cause more damage. If you are not sure whether it is still good to trust such a system, you can start diversifing your portfolio by investing in cryptocurrencies or other assets, that are not dependent upon central authorities. There is no need to invest large sums. Investing smaller amounts but regularly is perfectly fine. Just remember that it is not wise to invest more than you can afford to loose.
Platon Life can help
Platon Life can help you with such an investment. If you are not sure how to start and what knowledge is needed for such an investment, we have prepared video lessons for you that will guide you through the world of digital finances. At the same time, you can start investing with our PlatonCoin (PLTC) and find that entering the world of digital finance is much easier than it may seem at the first glance.