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Bitcoin price surge signals inflation lurking: PayPal CEO

Key facts:

Entrepreneur Peter Thiel regrets that he did not buy more BTC cheaply.

In the US, prices rose 4.4% year-on-year in September, a new high in 30 years.

PayPal co-founder Peter Thiel believes that the rise in the price of bitcoin (BTC) is a good reason to understand that inflation is already lurking. For him, the phenomenon manifested by the United States economy will not be temporary, so he considers it necessary to prepare to face the increase in prices and services for a long time.

Businessman regretted not buying more BTC in the past because at $ 60,000 per unit you are not entirely sure that it is a good investment strategy. However, he is convinced that “we are going through a moment of crisis”, as he pointed out at the Second National Conference on Conservatism, held in Florida, in the southeastern United States.

Thiel believes that the rise of bitcoin is a warning sign for the world to understand that something is wrong with the financial system. And in that sense, criticized the United States Federal Reserve (Fed) for not addressing the inflationary phenomenon more seriously, according to a Bloomberg report.

This Tuesday, the price of bitcoin briefly touched $ 64,000 again, about 10% below the all-time high of close to $ 67,000 on October 20. Meanwhile, the Commerce Department, whose inflation meter is preferred by the Fed, reported last Friday that prices rose 4.4% year-on-year in September, a new high in 30 years.

According to the US Bureau of Economic Analysis, prices of basic goods and services rise
rapidly in recent months. Source: . /

Inflation, a wave that threatens to drown the United States

The inflationary wave is something that has been talked about for some time in the United States, but it gained momentum in May, when Fed Chairman Jerome Powell admitted that the Central Bank is creating dollars from scratch at an unprecedented rate. This in correspondence with the multiple tools promoted by the government to rescue the economy in the midst of the coronavirus pandemic.

As reported by . in May, Powell said that, in effect, the Fed flooded the system with money:

Yes we did it. We print digitally. As a central bank, we have the ability to create money digitally. And we do it by buying Treasury bills or bonds or other securities guaranteed by the government, and that actually increases the money supply. Also, we print the real currency and distribute it through the Federal Reserve bank.

Jerome Powell, president of the United States Federal Reserve.

Now, when the inflationary wave has begun to manifest, the Fed said it is ready to begin to remove much of the stimulus policy that he implemented when the pandemic began. However, it may already be too late for that move to be enough to stop the inflation that Americans are increasingly concerned about.

About the author

Donna Miller

Donna is one of the oldest contributors of Gruntstuff and she has a unique perspective with regards to Science which makes her write news from the Science field. She aims to empower the readers with the delivery of apt factual analysis of various news pieces from Science. Donna has 3.5 years of experience in news-based content creation, and she is now an expert at it. She loves journalism, and that is the reason, she moved from a web content writer to a News writer, and she is loving it. She is a fun-loving woman who has very good connections with every team member. She makes the working environment cheerful which improves the team’s work productivity.

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