We met with Rob Kirby who writes the Kirby Analytics Newsletter to discuss his view that the COVID crisis is providing cover for the massive money printing going on across the world. Rob’s background includes trading the bond and money markets in Canada.
Ultimately, the currency unit will be debased until we reach hyperinflation, reflecting fiat money’s intrinsic value of zero. This has historically been the fate of all fiat currencies.
Major discussion points in the interview:
- Mathematically, debt systems that require ever increasing amounts of fiat currency reach their intrinsic value of zero;
- Rob uses the example of how long it would take to fill Yankee stadium by doubling a drop of water every minute for 50 minutes;
- In the last five minutes of that compounding scenario, the water moves from ankle-high to overflowing the stadium;
- Exponential rates of money expansion are characterized by a “late inning” growth that dwarfs what occurs in the early stages;
- The central banks understand that the amount of money being created in the global monetary system is accelerating at an exponential rate;
- The money created has been spent on military adventurism that has so far spared hyperinflation in the domestic economy, exporting inflation to the reset of the world;
- America is running out of countries to export inflation to, meaning hyperinflation is coming to US shores;
- Coronavirus is providing the cover that the central banks need in the final stages of the exponential compounding fiat money system.