- Fred Thiel, the CEO of Marathon Digital Holdings, a publicly traded Bitcoin mining company, discussed the challenges the Federal Reserve might face in its fight against inflation.
- According to Thiel, this era of financial dominance is a period where increasing debt and deficit levels have rendered monetary policy ineffective in controlling inflation.
- Thiel is not the only one warning about the potential fiscal situation that could arise from high spending and unchecked money printing in the U.S. economy.
Fred Thiel, CEO of Bitcoin mining company Marathon, shared his thoughts on the challenges the Fed may face in combating inflation.
Thiel Talks About the Fed’s Battle Against Inflation
Fred Thiel, CEO of Marathon Digital Holdings, a publicly traded Bitcoin mining company, discussed the challenges the Federal Reserve might face in its fight against inflation. Thiel suggested that the U.S. economy might be entering a period of financial dominance, which could affect the effectiveness of the methods the Fed has to use to combat inflation and bring it down to its self-imposed annual target of 2 percent.
According to Thiel, this era of financial dominance is a period where increasing debt and deficit levels have rendered monetary policy ineffective in controlling inflation. This unresolved phenomenon may force the Fed to become “less of an instrument” in combating it.
Thiel bases his statements on the levels of government revenue, interest payments as a part of it, and Treasury bonds outstanding based on maturity dates. This points to the necessity of issuing additional debt covering interest payments and budget deficits.
More Signs
Thiel is not the only one warning about the potential fiscal situation that could arise from high spending and unchecked money printing in the U.S. economy. Fitch, one of the country’s three major credit rating agencies, cited the worsening fiscal situation and the “high and rising general government debt burden” as reasons for downgrading the U.S. credit rating from “AAA” to “AA+” in August.
Furthermore, the recent Consumer Price Index (CPI) report showed higher-than-expected inflation figures, which could mean that the Federal Reserve has not yet finished raising interest rates in an attempt to control inflation. However, economists like Nobel laureate Paul Krugman think differently; Krugman recently stated that the battle against inflation has been “largely won” and that there is no economic recession in sight.
