The head of the US Federal Reserve admitted that the current economic policy is not "sustainable", but that it is not his job to find a solution.
On November 13, during a testimony before the Joint Economic Committee of the Congress, Jerome Powell noted that currently the national debt of the United States is growing faster than its nominal GDP.
Powell: solving the debt spiral "is not the job of the Fed"
"In the end, in the long term, it will not be something sustainable"said Powell."How to solve it – easier said than done – how it will be done and when it will be done … it is your problem and not ours."
As already reported by Cointelegraph, US debt has now reached a value of as much as 23 trillion dollars: about $ 70,000 for every citizen, and over a million dollars that every Bitcoin that will ever exist.
On November 14th, in one day the Fed has distributed funds to banks worth 12.7 million BTC, while its balance sheet is expanding to around 4,000 billion dollars.
According to Powell, to resolve this crisis it is not strictly necessary to repay the debt: it will be enough to ensure that the economy grows faster than it. Nevertheless, man has expressed his fears about future generations:
"I would be remiss if I didn't stress that the consequence of not tackling this problem is that … our children and grandchildren will spend their dollars on tax debt rather than on things they really need."
Trump wants negative interest rates
Powell released these comments shortly after US President Donald Trump renewed calls for negative interest rates – essentially forcing savers to pay to keep fiat currency – and criticized the Fed for not introducing them.
"Remember, we are competing against nations that have openly cut interest rates, so much so that many are actually paid when they pay their loans … who ever heard of such a thing? Date a little, give me some of that money"said Trump during your speech at the Economic Club of New York.
Debt-based economic policies, and their consequences, were the main reason that led to the birth of Bitcoin (BTC), which appeared following the 2008 economic crisis. As it is a form of money with a monetary offer deflationary impossible to manipulate, Bitcoin is increasingly being compared to gold as a hedge against the constant erosion of the value of legal currencies.