Property is hard to buy and sell (takes time), and there were a lot of new printed dollars and euros recently.
Supply is only half the equation. Velocity matters. [1] The new supply was added due to a drop in velocity, and they plan to remove it from circulation once (if) velocity returns to normal. This is SOP - and a huge advantage of centrally managed currencies. There's no doubt in my mind we'd have seen a massive deflationary spiral otherwise.
Let me ask you, why do you think this new supply was added and what was its impact?
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
(M2 * M2V) / GDP = 1[0]
That's the formula to calculate M2V.
New supply is not created due to the drop in velocity, velocity drops when new supply is added. When M2 rises and GDP stays the same, M2V drops.
As you can see from your own chart, when the economy came back to normal in 2015, they did not remove it from circulation. And yet velocity, when the economy was booming, was still dropping. M2 is constantly rising. This is forced because we have trade deficits that force us to accept debt equal to those deficits.
The impact was rising asset prices. The value of goods was not touched at all. Money is not neutral.
Velocity does not by necessity drop when new supply is added. Velocity is how quickly money changes hands in an economy - an increase in economic activity is an increase in velocity. GDP is calculated from supply and velocity, not the other way around, yeah? [1] Adding supply by decreasing interest rates can stimulate economic activity, increasing both the supply and velocity commensurately.
The economy slowed down, money stopped changing hands as people were locked inside, and the Fed lowered interest rates and allowed the supply to rise to incentivize economic activity.
The pandemic scared people into saving. The new money is in fact to your point invested, which has led to an increase in certain asset prices, but at a rate that far outpaces inflation (i.e. the same quantity of Apple shares will today buy you a lot more bread than a few years back). [2]
As for 2015, the supply was actually contracted in that the fed began unwinding its balance sheet. It was doing so at a good clip. As you can see here [3] the balance sheet dropped from 4.5T to 3.75T before the pandemic. However, to the extent inflation remained well controlled, it shouldn't be particularly critical to do so.
[1] https://www.investopedia.com/articles/investing/051415/how-c...
[2] https://fred.stlouisfed.org/series/PSAVERT
[3] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
No.
Your graph shows that the Fed only starting to unwind their balance sheets in 2018. Why was the Velocity of Money dropping during a boom phase? It's because it's calculated like I said.
Our trade deficits force us to take our greater and greater amounts of debt. During recessions - where people and companies are unable to take out the debt - the government is forced to back us.
The growth of GDP has been constantly dropping because our economy has been keeping alive more and more zombie companies. Many of these companies are taking out debt, and funneling that debt directly back into their stock through buybacks. These buybacks increase the demand of their stock and reduce the supply, which raises prices, which raises their market cap, which allows them to take out more debt! Since their market cap has risen, Vanguard and Blackrock and all of the other index funds are now forced to buy more, which pushes even more demand to these stocks.
With the growth of debt, the Fed can now unwind their balance sheets. The cycle continues...
Source: tried to buy property for many months in 2 different foreign countries. Havent been able to do so yet mostly due to challenges around title and very poor broker listings / knowledge
But in many ways it is easier than in the west, since you don't need to deal with: inspections, appraisals, mortgage contingency, closing periods, CCRs, escrow, etc.
I own two pieces of property in a developing country and in both cases it took about a day. I gave them cash and they handed over the title.
It definitely doesn't take months.
Bulgaria seizing 213K BTC: https://www.coininsider.com/bulgarian-government-owns-3-bill...
The US seizing 73K BTC: https://www.bbc.co.uk/news/technology-54833130
are prime examples.
More recently, US getting back some of the ransom paid: https://www.fastcompany.com/90644461/stolen-bitcoin-is-hard-...
In fact, seizing property can have many complications and be very hard(ownership structures, occupant protection laws, debts and obligations etc).
https://www.theguardian.com/business/2019/aug/25/british-cit...
This is incorrect. If the owner doesn't reveal the private key, the government cannot seize the bitcoin.
Never underestimate the cryptanalytic power of whacking someone with a rubber hose until they give you their keys.
Source?
>Never underestimate the cryptanalytic power of whacking someone with a rubber hose until they give you their keys.
No forms of wealth is safe against torture, and I don't think people expect bitcoin to be any different. It's still vastly more secure than a bank account (which only requires a phone call to seize) and is trivially linked to your identity (as opposed to pseudonymous bitcoin addresses)
I believe there are only 4 addresses with more than 100,00BTC each. Satoshi is 1. I believe Bitfinex is 3.
[1] https://www.coindesk.com/bulgarian-government-sitting-3-bill...
[2] https://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-sa...
The flaw in your analysis is that you assume that there's a one to one relationship between an address and a person. This is not the case because a typical bitcoin wallet has hundreds of addresses and address reuse is discouraged. Therefore your conclusion that bulgaria is the nth largest bitcoin holder in the world because there are are only n addresses with balances larger than it is incorrect.
[1] https://medium.com/cryptocurrencies-ups-and-down/top-ten-bit...
It was while people had at least some hope to buy a property. But nowdays the yearly increase in a property price is more than the median yearly salary of a person in the poorer countries (this may soon be true for western countries as well).
In Eastern Europe people immigrate to west for higher salaries so that they can buy an apartment in their home country, but if they don't use a loan to buy it, they are losing a lot of time to be able to buy a good place that they planned to.
Still, as you wrote, in Europe people are still thinking very conservatively.
This is not a limiting factor for billionaires looking to protect their wealth from expropriation, the use case the parent post contemplates.
Hyperinflation is a monetary phenomenon. If the government prints a bunch of money, the purchasing power of people holding the currency will go down. If the money supply was fixed, there couldn't be such inflation (if it was completely fixed, this could cause other issues, but not hyperinflation).
Historically inaccurate. If the economic base vanishes, inflation—even hyperinflation—will manifest. Fixed quantity is no panacea.
What matters is the ratio between money supply and the economy. This is why, when the industrial revolution switched humanity from stable state/near-zero growth to positive-growth mode, we matured past the gold standard, first to bimetallism and finally to fiat.
[1] https://www.stlouisfed.org/on-the-economy/2014/september/wha...
The inflation in these countries is not because of the way their economy is structured but because lack of structure and integrity. Things are not good in these countries, people don't seek to preserve the current wealth(and fail because of their currency) but they seek to get out of poverty and those who are not in poverty seek to explode their wealth so that the can buy a mansion and a Ferrari. The richer ones seek ways to hide their wealth out of the reach of the politics because in this type of countries the political situation is usually unstable and those who get very rich are cronies. When the crown falls the cronies need to have an exit strategy(sometimes they can adopt but sometimes the new crown comes with its own people) and that usually is buying property or companies overseas. Now they have the BTC option.
Therefore, in such countries people don't really keep local currency long term already(when they do, they will do it to get interest rates that at least match the inflation). The inflation rate is relevant only when doing business deals, financing projects or purchases and adjusting employee salaries. No one is losing their wealth to inflation.