Repo Markets Prove: Bitcoin Is Just Better Money Than USD

Recently, The Federal Reserve has been growing its balance sheet, expanding the USD money supply by an average of $5,800,000,000 per day. That statistic comes according to this Finance Yahoo article published on November 28, 2019.

And that’s just 1 country. Yeah, the USD a currency that makes up almost 2/3 of all central bank reserves. But still, it's only one country! In fact, we're sitting at an all-time high of $15.1973 trillion of M2 money supply in the United States right now. That's the end-of-October figure, up $168.9 billion from the end of the third quarter in September. At that rate, it really makes one wonder what the November number is going to be.

This frenzy of money creation started on September 17 when the Fed, in the words of The Economist, experienced an "unexpected shortage of liquidity in the financial system," specifically the repo markets in which banks turn "risk-free" Treasury securities into short-term cash loans every day. As a result, the Fed has, in the words of Forbes contributor Milton Ezrati, "begun to rethink the bank capital requirements established after the last financial crisis."

Uh oh! Once you do your research at The Washington Post and find out that repurchase agreements result in "$3 trillion in debt being financed each day," that doesn't sound too good. That's why part of what made the 2008 financial panic so bad was worry over the repo markets freezing up that year. Our new regulations like the Dodd-Frank Act were supposed to fix this!

Apparently, they didn't fix anything.

All of which to say, that it's mighty good to remember in times like these, that Bitcoin, at today’s price of ~$7350 per BTC, only expands its supply by a value of $13,230,000 per day.

That's $5,786,770,000 less expansion per day than the US dollar. And that’s for a currency that serves the whole world and everybody in it, not just the top 1% in one country.

To me, the conclusion is clear: