El Salvador’s president urges the US Fed to stop printing more money amid violent inflation.
As the US dollar continues to experience high inflation, El Salvador’s President Nayib Bukele has pondered the matter, pointing out that the increase in fiat money printing is the main culprit.
Earlier on Wednesday, Nayib Bukele reacted to a Bloomberg article deliberating on inflation statements made by Jerome Powell, chairman of the United States’ Federal Reserve (FED). The president of El Salvador asked the federal reserve to stop printing money for fear of “make things worse”.
The discovery by the World Health Organization (WHO) of a new variant of Covid-19, highly infectious dubbed Omicron last week has spawned a new round of economic hardship.
The urge to print money
According to report, Fed Chairman Jerome Powell suggested in an appearance at a Senate committee that it was time to consider the effects of inflation on the country’s economy as “transient”.
“The word transient has different meanings to different people. For many, this carries a sense of short life. We tend to use it to mean it won’t leave a permanent mark in the form of higher inflation. I think it’s probably a good time to drop that word and try to explain more clearly what we mean,” said Jerome Powell.
He promised that the Fed would employ all the tools necessary to combat inflationary pressures, which he noted “will last until next year“.
Powell mentioned tapering in reference to a progressive reduction in bond and bond purchases. The central bank has been printing money to buy bonds in order to lower interest rates, currently 25%. Even though lowering the interest rate leads to more borrowing, reviving spending along with the economy, with the printing of more money comes more inflation, where incrementally the value of a currency is eroded.
Bitcoin has long been touted as a hedge against the effects of inflation, and this is one of the reasons why many individual and institutional investors are making massive bets on the primary cryptocurrency.
Robert Kiyosaki, the author of the bestselling Rich Dad Poor Dad, had even urged his audience to embrace bitcoin, which he described as the people’s money.