20th September 2025 > > The second most important CCC ever.

tl;dr

Let’s talk about money printing.

Market Snap 

Market Wrap

Keep stacking those sats. If you worry that your conviction may ever waver, print out today’s missive and pin it to the wall beside your bed. May 22^nd next year will become known as the financial world’s day of singularity, and it draws ever closer.

Curious Cryptos’ meme corner

An old one I know, but very pertinent to today’s missive.

Curious Cryptos’ Commentary – Quantitative Easing (QE)

The last CCC (https://www.curiouscryptos.com/post/18th-september-2025-the-most-important-ccc-ever) explained the back story to the impending return of QE, but this time on a permanent basis.

To summarise, Trump’s pick for chair of the Fed once the hapless Jerome Powell steps down next May, Stephen Miran, wants to add an additional mandate to the Fed’s responsibilities of pursuing “moderate long-term interest rates”, aka manipulation of the entire yield curve on a scale that would see any private individual sent to a high-security jail with no prospect of parole ever. This proposed new mandate can only be achieved with a determined and sustained programme of bond purchases by the Fed, more commonly known as QE, a policy designed to make the rich richer, and the poor poorer. QE and its satanic sibling MMT (Modern Monetary Theory) are the precise opposite of a progressive economic policy, contrary to the protestations of their respective supporters.

In that article the CCC made the startling (to some) claim that:

“Government spending will spin further out of control, with no bond market pain from issuing excessive debt. Central banks worldwide will be monetising that debt, but contrary to most economists’ understanding of the world, that will not cause inflation so long as supply chains are kept open, though tariffs won’t help in that respect.”

A long-term subscriber and supporter of the CCC has asked for clarification of this claim, which I am most happy to provide. I know this is a dry subject, but it is one of the utmost importance. Please bear with me.

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Economics is known in common parlance as the dismal science. It is neither dismal in the sense that Robert Carlyle (no not that one, the other one) meant when he penned that description sometime in the 19^th century or before, nor is it a science. True science requires a control experiment, something which is impossible in economics and a certain other wildly influential sphere of supposed scientific endeavour, but let’s not get into that latter example today, for there are some who will get rather upset with me.

Professor Thomas S. Kuhn’s seminal work “The Structure of Scientific Revolutions” (a must-read for anyone who wants to gain a serious understanding of the modern world) illuminates the philosophy behind advances in science, and mathematics, not one bit of which can be applied to economics, which has morphed from a truly insightful first lesson (the price curve of commodities under the influence of supply and demand) into a tool for political point scoring. This inability for practitioners of economics to build a consensus upon which solid progress can be made has led to a serious misunderstanding of the world, even by winners of the Nobel Peace Prize – looking at you Paul Krugman and Joseph Stiglitz, amongst others.

Let’s take two examples which should raise some questions.

Firstly, there have been some well-publicised examples of hyperinflation. The obvious ones include the Weimar Republic in the 1920s, Hungary in the 1940s, and Zimbabwe in the 2000s. In each case, the direct cause was money printing. Economics 1.0 is normally used to show that an excessive supply of a commodity such as oil, corn, gold, etc. results in a depreciation of the price of that asset. Interestingly, as fiat money is itself a commodity, the relationship (sometimes) works just as well in reverse. If you supply more fiat money, that money will depreciate against commodities, which we commonly describe as inflation.

But not always, and not so much these days except in extreme circumstances, a key point to which we shall return, but one that is missed by almost all economists and the popular press, whose editors fail to put in the hard yards and fall back on so-called accepted wisdom. Contrarians are few and far between in both professions but, as regular readers already know, being a contrarian investor at the right time is the surest way to beat the markets.

The second example is the rise of China since the 1980s and 1990s. China exported deflation to the western world in the form of very cheap consumer goods which we all benefited from in the short-term. The price was paid in the form of employing slave labour provided by the Chinese poor, an issue which to this day does not directly impact upon us and gains no traction, though it remains one of the world’s greatest injustices. There is also the long-term price of the environmental cost. Merely the increase in the annual carbon emissions of China is greater than the total of UK’s annual carbon emissions, but again, this issue gains no traction, not even amongst the environmental activists whose impotence would be exposed if they made a fuss about the world’s most dirty polluter of all time.

There were two other side effects of China’s export of deflation. It encouraged both the hubris of politicians who claimed to have “abolished boom and bust” whilst also facilitating the rise of central bankers who took the credit for a low inflationary environment which was not of their making. We are all demonstrably poorer for worshipping at the false altar of the technocratic elite.

The other more trivial impact has been to make Jeff Bezos even richer than he would otherwise have been.

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The response to the Global Financial Crisis of 2008 took two forms in the US. The first, and correct response, followed the lead set by the reaction to the Savings and Loan Crisis of the 1980s. Some financial institutions hit by the S&L were split into a “good bank” and a “bad bank” with the latter capitalised either with private money or with public money ranking higher than ordinary shareholders within the capital structure. TARP (Troubled Asset Relief Programme) bought distressed assets from the banks affected by the GFC at deeply discounted prices with the immediate effect of making the banks creditworthy again thus freeing up the repo markets which had gone into deep-freeze. The long-term outcome was to make a shedload of money for the taxpayer, as the restart of the capital markets had an outsized impact on the attractiveness of those previously distressed assets to new (private) buyers.

The second response, which was fundamentally wrong, was to begin the first round of QE on a massive scale. This was designed to reduce interest rates along the yield curve (beginning to sound a little familiar now, eh?) which encouraged fiscal incontinence by the government, whose profligate spending spiralled out of control, and which continues today.

Here in the UK and the EU, rather than copying TARP, politicians of all stripes decided they would prefer to become shareholders of the banks. That provided much-needed capital, again freeing up the repo markets and allowing banks to function once more, but has come at a huge financial cost to the taxpayer. So, we got that bit badly wrong.

We also felt we had to copy the US lead and implement our own QE, with equally disastrous results.

The one thing that did not happen between 2008 and 2019 was any form of inflation despite the massive money-printing that was taking place, much to the consternation of economists worldwide who were making corn from dire predictions about the impact of an ever-increasing money supply.

But really, we should have already learnt to ignore the doomsters for they had made the same mistake in relation to Japan which began its own QE in the early 90s. In a very strict sense, one might claim that it wasn’t really QE for the bond purchases were sterilised by increasing reserve requirements on the banks, but that is a minor technical point and need not detain us here.

So, why did the economists get it wrong?

Long-term readers no doubt clearly recall that in the CCC dated 5^th July 2020 (yep, five years ago) the CCC research team first explored the concept of open and closed economies. The Weimar Republic, Hungary, and Zimbabwe were all closed economies. Rampant money printing led to the exact outcome predicted by economics 1.0 – the devaluation of fiat against commodities. The greater the money printing, the greater the devaluation leading eventually to hyperinflation. Perplexity tells me at its height prices were doubling daily in Zimbabwe. We are all familiar with those photos of Germans pushing carts of paper notes simply to buy a loaf of bread. There is no economic force more destructive to our well-being than hyperinflation.

In contrast, printing money in open economies, even on the scale of the trillions created out of thin air by QE, makes no discernible impact on the value of fiat against commodities, for there are many avenues that the pressure caused by an increase in the money supply can be released. It is different for hard assets, for even in open economies, hard assets will fiercely retain their intrinsic value against fiat.

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If you want proof of this hypothesis, then look no further than the response to Covid.

At a stroke, all economies were suddenly closed, accompanied by a further and utterly irresponsible increase in the money supply, as central bankers slavishly obeyed the orders coming from their political masters.

That is the reason why inflation suddenly took hold globally.

If we had followed a zero-Covid strategy, our economies would have stayed closed for longer, and we would have suffered hyperinflation, destroying the prospect of providing even the most basic of public services. Inflation did not get that bad, as economies surged once supply routes were opened, and the movement of goods and people recommenced, but it was a close-run thing. We were teetering on the edge, unaware of just how proximate we were to the devastation and destruction that we had deliberately and willingly brought upon ourselves.

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And that Ladies and Gentlemen is why Miran’s stated aim of turning on the money printing presses (though he doesn’t express it that way) will have a minimal and unnoticeable impact upon inflation, with one caveat. Tariffs are a form of partial closing of economies. If the tariff wars crank up, all bets are off. I suspect Trump and his advisers are ignoring this potential pitfall.

What we do absolutely know for certain, is that a mandate of “moderate long-term interest rates” will lead to ever-increasing government deficits financed at ever lower rates, and a subsequent acceleration in the value of hard assets against fiat. Property and BTC are my top picks for the forthcoming financial havoc that Miran will bring down upon us. There is literally nothing else we can do.

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All constructive feedback is most welcome.