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Free money – nice fantasy but truth is different

free money

Free money is always nice. When you get money for free and you don’t have to do any work for it, it’s a nice fantasy. This money also has its dark side.

Let’s take a look at how free money could destroy the economy.

The pandemic again

We’re talking about it again. If the pandemic had not started, we would not have the data we have now to assess the direction the economy should take. From the response of governments to individual aspects of the pandemic, they showed us which options are functional and which are not.

Companies that started to have big debt problems were usually given the opportunity to get a stimulus package of money from the government and stay afloat. However, the problem is that just such free money created more zombie companies that would normally go bankrupt in such a situation. That is why the economy has not recovered from these companies, and the number of such companies is, unfortunately, still growing.

zombie companies
Source: ft.com

How cryptocurrencies could help

We come to cryptocurrencies and their use in a similar situation. The central financial system has shown us that it is not responding well to a possible crisis and also that free money cannot function in the long run and, on the contrary, is placing a heavy burden on the economy. On the other hand, the cryptocurrencies, which recovered very quickly from the fall of Black Thursday, were built for unexpected crises.

At the same time, they can be seen as protection against inflation, which is one of the main reasons why people have invested in them and interest in them is still growing. The financial system we live in now is inadequate, and in the future there will be a need for a financial system that does not generate money, as is appropriate for the economy, but fair and which people will trust.

Conclusion

The pandemic has affected everyone. Although its effects are dire, it has shown us things we should improve as humanity. Finance is one of the things that need to be healed and reworked in this world. People need to trust and support the system when something as unexpected as a virus happens. If you decide to invest in cryptocurrencies, study as much information as possible and invest only as much as you can afford to lose.

Source: kurzy.cz

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