Second wave

The world keeps expanding its monetary base. China and the U.S. keep adding assets (and liabilities, of course) to their balance sheets, as well as most developed economies. Because of that we will surely have a second wave in inflation, at some point. Wars, tariffs, and fiscal stimuli are also contributors to inflation, so it’s normal to assume that eventually, prices will trend up. And then there’s the debt which helps create growth and price increases during the expansionary phase, but creates a problem when its repayment time. The effect of these monetary base expansions is the debasement of fiat currencies that are tied to these economies. And that why gold and Bitcoin keep going up. Perhaps Powell is right after all.

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