During the Covid-19 pandemic, central banks such as the US Federal Reserve loosened fiscal and monetary policy. Now, the same financial institutions appear to be engaging in quantitative tightening (QT). According to Nick Ghali, CEO and founder of Leventure Consulting, “The money supply is officially shrinking. This has only happened four times in the past 150 years. Gerli warns that each time this happens, a depression with double-digit unemployment will ensue.
contraction of the money supply and its impact on the economy
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Some market analysts and economists are worried about the economy’s future, while many others believe that things will quickly worsen due to significant inflation and the failure of central planning. When the Covid 19 pandemic broke out, the U.S. government and many nations around the world financed trillions of dollarsof debt to keep the economy afloat. Many believe that this debt has ballooned to enormous levels and could sink several Western economies. Speculators argue that this will harm the dollar and only the hard assets will survive.
Recentinterview withat the 2023 BMO Metals, Mining,&Critical Deposits Conference,Rob McEwenExecutive Chairman of McEwen Mining, stated, “When the dollar falls relative to other currencies, the value of hard assets rises because the government is irresponsible. Governments are irresponsible and stealing from the public by printing excess money and borrowing in ways they should not … Look at the amount of debt most of the Western world is in right now.
March 8, 2023Nick GerliCEO and Founder of Leventure Consultingwarnedthat the money supply is contracting. The money supply is officially contracting,” Gerli said Wednesday. This has happened only four times in the past 150 years, and each time was followed by a depression with double-digit unemployment.
Leventure executives argue that a shrinking money supply while inflation rises is a “nasty combination” because fewer dollars are available to pay for higher prices, ultimately leading to a deflationary crash.
Gelliadds:
This is exactly what happened in the Depression of 1921. (Not the Great Depression). This is what happened after World War I and the Spanish Flu. High inflation and increased money supply lasted for years. And then…. . an 11% deflation occurred and unemployment skyrocketed. All it took was a -2% contraction in the money supply in 1921 to cause this deflationary depression.
Leventure executives noted that there was already a 2% contraction in 2023. Mr. Gerli states the following.
