It is only a matter of time before Bitcoin reduces “death spirals” to its true intrinsic value of $ 0, said Steve Hanke, professor of applied economics at Johns Hopkins University.
“What is the basic value of Bitcoin? The basic value is zero, ”said Hanke. “The flow of [income generated by Bitcoin] is zero. It’s not like money. Money, in its broadest sense, is fundamental to most fiat money because it pays interest. If you look at the fourteen components of M4, it is the broadest measure of money in the United States. Ten of these components, like treasury bills, pay interest. Bitcoin does not pay interest. ”
Hanke does not speak this week of Powell’s remarks that money supply growth would not contribute to economic expansion or inflation.
Powell had said in his testimony that “there was a time when monetary policy aggregates were important determinants of inflation and they have not been the case for a long time,” adding that “the correlation between different aggregates [like] M2 and inflation are just very, very low, and you can see that inflation is now 1.4% this year. ”
“Chairman Powell is clearly delusional. I can’t believe the chairman of a central bank actually said that, ”said Hanke. “Comprehensive monetary measures are very closely related to nominal GDP [gross domestic product]Nominal GDP comprises real economic growth plus inflation. ”
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