Economist Bernard Connolly Warns — Bubble In Bitcoin Could Lead To Hyperinflation.
On July 9, British economist Bernard Connolly spelled out the problem which he believes has already been hinted at by central banks, the dilemma of ‘bubbles’.
In a cautious article christened “How A Bitcoin Bubble Could Lead To Hyperinflation,” he emphasizes that cryptocurrencies could lead to hyperinflation if their adoption threatens to weaken the authority of central banks.
The number of banks and regulators moving in to control or ban the use of cryptocurrencies has risen in the past few years. While most have strongly argued for the unconditional adoption of crypto in replacing fiat currency, some specialists fear that such a move is naïve and would cause more harm than good.
Connolly states that bubbles in the financial system draw a picture of deeply entrenched inequity in economies anywhere.
“The downward trend in real long-term interest rates which has persisted throughout this millennium and has only been accentuated by the pandemic fuelled the bubbles which have been needed to regain and maintain full employment and fend off deflation,” he says.
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