(Liberty Nation) In response to the Great Recession a decade ago, the international community fired off the big guns to stave off the inevitable decay of the global economy that had been manipulated and distorted through the Keynesian doctrine. Despite the massive fiscal and monetary stimulus at the time, many countries failed to recover from the financial crisis – and those that survived the market meltdown are still paying for the spending and bailouts.
After pulling the trigger on the Coronavirus-targeted bazookas, the world’s pockets are empty, potentially creating a scenario for a reset in the global monetary order.
On the other side of the lockdown, who will stand tall and reign supreme? If history is any indicator, it will either be the country with a lifetime supply of printing press ink or the one with a vault full of gold.
A NEW MONETARY ORDER
Jp Cortez, the policy director at the Sound Money Defense League, believes the global pandemic could usher in a new era of sound money in the future. However, before that happens, he thinks the immediate fallout will lean against a fundamentally stable currency structure.
“Countries have massively overleveraged their economies, leaving them with two options: print now and deal with inflation later, or collapse,” Mr. Cortez explained during an interview with Liberty Nation. “While the printing presses are already running at high speed, politicians and unelected bureaucrats will seize this opportunity to pass measures with massive price tags.”
“The inevitable inflationary consequences will show up down the road as economic demand starts to recover and money velocity picks up,” he continued. “When rising inflation begins destroying the real value of trillions of dollars in U.S. Treasurys held by central banks around the world, that could be a catalyst for a monetary reset.”