- U.S. money supply is soaring amid the pandemic.
- U.S. national debt has surpassed $26 trillion for the first time.
Amid the economic uncertainty, the Federal Reserve has been handing out trillions in aid via methods including quantitative easing and direct-payments (stimulus). The influx of money entering the economy is evident as the M1 Money Stock has increased by over 30% this year alone.
The M1 money supply includes coins and paper currency in circulation; in other words, the most liquid part of the overall money supply. The M1 money stock has risen by over a trillion dollars since January alone. Furthermore, amid the new influx of money, U.S. bank deposit inflows are surging like never before, The Crypto Associate reported.
More importantly, the parabolic growth in the money supply may have longer-term consequences. Inflation may occur if the money supply grows at a more rapid pace than the growth in economic output. A significant rise in inflation may affect the U.S. dollar, the world’s current reserve currency.
National Debt Crosses $26 Trillion
Similar to the U.S. money supply, U.S. national debt has also been surging amid the pandemic. As reported by The Crypto Associate, the U.S. national debt has crossed $26 trillion for the first time. Jerome Powell, Chairman of the Federal Reserve, has also commented on the matter during the most-recent semi-annual testimony.
The United States federal budget has been on an unsustainable path for years nowJerome Powell (Federal Reserve Chairman)
U.S. national debt is up over 12% since January, an increase of over $3 trillion. Furthermore, The Committee for a Responsible Federal Budget, a non-partisan organization, estimates that federal debt will grow by $4 trillion in 2020. The growing national debt raises concerns over the country’s ability to sustain the rising debt.
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