Jack Dorsey has warned that hyperinflation will happen in the US and across the world, stating via Twitter that “hyperinflation is going to change everything. It’s happening”.
CEO of Twitter and Square, Jack Dorsey, has been a Bitcoin advocate for several years now. The young CEO has implemented blockchain technologies and cryptocurrency into his own business model, and has been vocal on the role that Bitcoin and other cryptocurrencies will have in the future of decentralised finance.
The latest Tweet by Dorsey sent a ripple across The crypto and tradFi twitter space, with many people criticizing Dorsey’s statement arguing that the US is not showing any signs of hyperinflation. Others responded positively to Dorsey’s Tweet stating: “Inflation is the government’s way of stealing Money from you, legally. Start investing as soon as you can to beat it”.
While there may be some disagreement around the hyperinflation that Dorsey believes is happening, or will happen in the near future, there is no doubt that inflationary pressures have been on the increase, with Federal Reserve Chairman Jerome Powell admitting that supply-side constraints have worsened and inflation will be more enduring and could become a serious concern.
“The risk is that ongoing high inflation will begin to lead price and wage setters to expect unduly high rates of inflation in the future,” Mr. Powell said. And if inflation seemed likely to stay high, “we would certainly use our tools to preserve price stability, while also taking into account the implications of our maximum employment goal.”
As a crypto proponent, Jack Dorsey likely sees DeFi as the solution to the hyperinflation he believes will take place. In July he announced that his company Square will launch a Bitcoin DeFi platform, “with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services”.
In the current zero-interest economy, DeFi has exploded, in part due to it being perceived as an oasis in the desert of low-interest rates. Since the Global Financial Crisis, government interest rates have remained low, exacerbated by the global pandemic and the shut-down of global trade.
Whether or not hyperinflation shows its face, the fact that inflation is on the rise, and a new financial industry has emerged that provides an alternative to the current zero-interest economy, means that a tipping point may be reached in which people are no longer willing to participate in the traditional financial system.