The main reason why people lose their trust in the central banks is the lack of sustainable policy applied by them. The central banks, including the FED, try to find a balance in the economy of a country or a group of countries.
The responsibility of the central banks is to manage the total supply of a fiat currency and the banks that accelerate or slow down the economy with loans. The burden on the central banks has never been bearable but, since 2020, the whole system is at risk.
Recently we witnessed the collapse of Silicon Valley Bank and now many people talk about Credit Suisse, one of the "too big to fail guys" is at risk. The investors are not satisfied with the lifeline of $54 billion may not be enough.
Quantitative Easing & Tightening
Quantitative easing is the easiest thing anyone can do with no issue, press the button to print more money.
Unfortunately, printing money is like drug addiction. When someone uses the drug, s/he feels the hype that comes suddenly and drastically. However, as time passes and the effects of the drug decline in time, the negative sides start to show up.
Here you can see the quantitative tightening that happened within a whole year time. However, there is something weird in the chart. If it were and altcoin chart, Nobody would be surprised. Yet, it is the central bank of central banks.
Since November the whole money withdrawn from the markets has been injected within a day. Not kidding, 5 months of suffering was for the sake of nothing if we change our perspective.
This chart speaks a lot in addition to what we see. You can see the banks that become zombie banks that need more money to initiate their operations, the prices of everything go up, and the more trouble we will be in.
Can anybody talk about the stability of the health of the global economy after seeing that the Federal Reserve is taking sharp actions to maintain its operations?
I'm glad to see that the crypto ecosystem is green, Gold and Silver go up and markets are positive. However, I also believe that these green days may be for a limited time. We will only learn it as the FED shares its new vision.
The trust in banks needs some time to be recovered. Meanwhile, personally, I will embrace my digital and real gold to save myself in this global drama.
Posted Using LeoFinance Beta