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Coinpaprika
2025-05-29 09:03:23

Why Gold and Bitcoin Are Gaining Power Again

Right now, something big is happening with the world’s money system—but it’s not being talked about loudly. Instead of central banks like the Federal Reserve creating money directly, banks themselves are stepping in by buying short-term government debt. When banks do this, their own balance sheets grow, which means more money is flowing into the economy. This creates liquidity , a fancy word for available cash—and that often boosts the prices of assets like Bitcoin and gold . This kind of money expansion also happened in the 1970s, and back then, it led to high inflation. The lesson from that time? When the value of money drops, it’s smart to own things that hold real value—like gold. Now, we’re seeing something similar today. In the U.S., the government has been spending heavily, but instead of selling long-term debt, it's mainly selling short-term bills, which are easier for banks to buy. This makes money flow faster into financial markets. At the same time, China is adding more money to its system too. But instead of trying to keep its currency strong, China is letting it weaken against gold —a sign that it’s focusing on real assets rather than paper money. All this means one thing: money is losing value , not in stores just yet, but in the financial system. That’s why gold and Bitcoin are climbing. They are not tied to any one country’s debt or currency and are often seen as safe havens when trust in government money falls. So, while bond markets are under pressure from rising debt and interest rates, people who want to protect their savings are turning to Bitcoin and gold . These are the assets that benefit when governments quietly print more money or rely on banks to do it for them.

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