Live Metal Prices / oz
Gold: 2054.90 EUR
Silver: 22.97 EUR
Platinum: 839.07 EUR
Palladium: 938.38 EUR
Rhodium: 4769.58 EUR

Another $25 Trillion from Central Banks in 2020 - 2021 May Have Bitcoin Owners Smiling

At the first of May, the Bank of Japan (BOJ) made a “surprise” announcement to further expand their printing presses. In addition to eliminating ceilings on their purchases of Japan government bonds, the BOJ also indicated they would expand purchases of corporate bonds. The BOJ also indicated further purchases of T-Bills with the following statement:

“Regarding purchases of T-Bills, conducted as part of money market operations, the Bank will decide the purchase size per auction considering the effects on financial markets. The Bank will purchase about 500 billion to $3.0 trillion yen of T-Bills per auction for the time being.”

Combining these likely means that the BOJ may expand their balance sheet may another $5 trillion before 2021 is through.

In terms of perspective, the BOJ’s new $5 trillion in balance sheet expansion is about as much as the annual GDP of the country. Milton Friedman’s helicopter money has arrived, in a way.

Others

Of course, the move by the BOJ is not surprising given what other central banks are up to. The chart that follows has projections for central bank balance sheets for the European Central Bank (ECB), the Federal Reserve, the BOJ, the Bank of England (BOE), and the People’s Bank of China (PBOC).

Notice anything? All central banks have given indications that they will continue their balance sheet expansions for the foreseeable future (money printing).

How much do the charts depict through 2021? Summing up the projected actions of the five central banks, the BOE, the BOJ, the ECB, the PBOC, and the Fed may print another $25 trillion by the end of 2021. With a global GDP in 2021 of $85 trillion, the $25 trillion in money printing is almost one-third of the global GDP. Simply massive.

The Balance Sheet Details

What do the details look like? The top money printer likely is unsurprising. Through the end of 2021, if the Federal Reserve keeps up at its current pace, by the first quarter of 2021, the Federal Reserve will have printed $11 trillion. With a GDP of just under $21 trillion in 2020, that’s an increase of over 50%. Again, simply amazing.

The projected second place in the money printing race is Ms. Lagarde’s baby, the ECB. By the end of 2021, the ECB may have printed another $7 trillion on top of its current $6 trillion balance sheet.

The other three central banks may print another $7.5 trillion by the end of 2021, including $5 trillion from the BOJ, $2 trillion from the PBOC, and $500 billion from the BOE. Groupthink – yes.

The Meaning for Bitcoin

What does all this mean for Bitcoin? Well, it could mean a 2020/2021 to remember, or it could mean nothing. Early evidence on Bitcoin’s price is that the central bank money-printing operations will trigger stronger price gains.

After bottoming on March 12, 2020 at $4,380, the price of Bitcoin is up to around $9,320, an increase of over 100%.

Bitcoin continues to be an asset worth holding in the presence of massive government money printing operations.

The Takeaway

Central banks are set to print another $25 trillion in response to the global coronavirus pandemic through the end of 2021. With the price drop stemming from a potential sour economy behind us, the recent price gains in gold and silver and other precious metals may just be the beginning. The remainder of this year and the coming one may be years to remember for owners of Bitcoin.

world map
Hello!
To make your shopping experience as seamless as possible, we offer the option to select your shipping country, preferred currency, and language. Please use the dropdown menus below to customize your preferences:
By selecting your preferred options, you will be able to view prices and shipping rates in your local currency and language, and be able to shop with ease.