When it rains, it pours. It appears that this is true for both weather and expansion to the monetary base of the United States. According to a report by the New York Times, “President Biden will propose a $6 trillion budget on Friday that would take the United States to its highest sustained levels of federal spending since World War II, while running deficits above $1.3 trillion throughout the next decade.”
Only a year ago, the pandemic began, and the Federal Reserve was forced to initiate a major stimulus for the economy via inflation and quantitative easing. Starting with $2 trillion, the stimulus package was supposed to enable the continuation of the American economy. Of course, the pandemic was simply a catalyst for increasing the already present inflationary practices of the Fed.
Inflation is a dastardly concept, not only removing value from the common people’s money, but giving access to an elite few the ability to create value out of thin air. Bitcoin Magazine’s “When More Isn’t Better: Inflation In The 21st Century,” by Sebastian Bunney, explains in detail how monetary expansion ruins economic growth and potential. And it isn’t simply the rampant inflation in the sense of more money that ruins the system, reducing interest rates and making credit cheap lead to long-term debt cycles, as explained by Bitcoin Magazine’s Dylan LeClair.
With all of this, bitcoin is set to gain. Although it cannot be explicitly stated, the previous stimuli have often been seen as drivers of the bitcoin price bull run. And with coinciding upward catalysts such as the halvening, it appears that the economic environment for a sound money such as bitcoin to surge forward is ripe. It remains to be seen whether the $6 trillion proposal will be accepted, but it is obvious that further inflation is to be expected and should contribute to revitalizing the bitcoin bull market we are in.