This new economic crisis highlights the flaws of the current system

The economic crisis that is starting to unfold highlights once again the flaws of the current monetary and financial system. Nevertheless, the magnitude of these flaws is much higher than during the 2008 crisis.

While hundreds of billions of dollars were enough to push back the explosion of the fiat system in 2008, several trillions of dollars have already had to be printed by the Fed to prevent the collapse of the U.S. economy in 2020.

The Fed made it clear that it could print an infinite amount of U.S. dollar.

It is not depriving itself of this, as shown by the incredible increase in the money supply of the U.S. dollar in circulation.

Biggest part of this money goes into the financial system as shown by the phenomenal increase in the Fed’s balance sheet. The Fed’s balance sheet has exceeded $6.5T for the first time in its history:

Other central banks are also following the same path. The European Central Bank has had negative interest rates for several years, and it does not deprive itself of printing a very large amount of fiat money.

The Central Bank of Japan has just announced that it is blowing its limits as it will be conducting an unlimited quantitative easing program.

It seems that the Fed is becoming a model for all other central banks.

At the level of the governments of the world’s major economic powers, stimulus plans are multiplying. At the end of March 2020, the United States announced a $2T stimulus plan.

This stimulus plan has since been supplemented by other measures necessary to bail out American companies which are suffering like never before from the economic crisis which is becoming more and more severe every day.

The bill has already exceeded $3 trillion for the United States.

These stimulus packages are being financed by public debt that will explode in most of the world’s major economic powers.

The United States is now approaching $25T of public debt. The other world economic powers are doing little better. Public debt above 100% of GDP is becoming the norm in 2020.

In 2020, the exception is becoming the norm. And the situation is more than worrying for millions of people around the world. Indeed, as the Cantillon Effect explains very well, it is the richest people who will get even richer with all the measures that are being taken now.

Conversely, those who are already poor will be even poorer.