Over the past year, the fine gentlemen of the Crypto Voices podcast have been doing a quarterly update on the Global Monetary Base, how much it has expanded or contracted from quarter to quarter, and where Bitcoin fits into the pecking order. In their view, and Uncle Marty's as well, people often benchmark Bitcoin's success against the wrong metrics. Whether it be stock market returns, Bitcoin's market cap compared to real estate investment or the market cap of gold; these benchmarks either completely miss the mark or only tell part of the story.
If Bitcoin really is to become a dominant monetary good in our world, the best benchmark to compare it to is the world's base monies. Or monies/currencies that are used in final settlement between central banks, commercial banks and other banking entities. Throw in gold and silver on top of these government-mandated currencies and you have the global monetary base, which currently stands at $19.47 Trillion.
What's most interesting about the first two quarters of this year is that the world monetary base is on pace to decrease by 4%. This would be the first time that the monetary base has fallen, on balance, ever. This is something that we should all be paying attention to. Especially in regards to how it forces the hands of central banks around the world. The expansion of the monetary base represents money printing, and contraction in that base coupled with an economic downturn would signal to me that money printing is the only thing keeping this charade alive.
Though, it seems as if the Fed has made a complete 180 in recent weeks and now plans to cut rates and do their part to help expand the base, which has been falling in the US since 2014, in an effort to keep the party going.
If you haven't already, make sure you peep the thread that explains the most recent monetary base update, peep the podcast that goes along with it, and follow Crypto Voices if you aren't already. Matty and Fernando do an incredible job of breaking down complex economic concepts for the layman. An invaluable service for those attempting to understand Bitcoin.
Podcasts make car rides better.