The Banking Executive Magazine - July 2022 Issue

Inflation and Crypto price of goods and services to rapidly increase while wages stagnate, cur- rency purchase power decreases and living costs become more expensive. Higher inflation erodes the value of the saved money and lower inflation slows the economy as a whole. Economists disagree about the causes of the current rising world in- flation described as the worst in decades. Some people point their fingers at the United States Federal Reserve for printing too much money, which in turn was used to stimulate the economy and handle the pandemic. Others say that the United States Federal Reserve is not the one to blame. Supply shortages caused by lockdowns were the main problem. Economists think that a moderate in- flation is helpful to keep people buy- ing, thereby stimulating the economy. But in times of economic crisis, like war and coronavirus pan- demic, inflation can get out of hand. CRYPTOCURRENCY TREND According to the Guardian latest news on 29 June 2022, there is crypto crisis and digital currencies are going from boom to collapse. with bitcoin falling below the $20,000 mark in June 2022, far below its peak of nearly $69,000, which it hit in November 2021. The fall has been sharp and spectac- ular. An overall market that was esti- mated to be worth more than $3tn barely by the end of 2021 is now worth less than $1tn. According to New York Times news, the price of Bitcoin plunged to its lowest point since 2020. Coinbase, the large cryptocurrency exchange, tanked in value. A cryptocurrency that promoted itself as a stable means of exchange collapsed. And more than $300 billion was wiped out by a crash in cryptocurrency prices and the crypto world went into a full meltdown in March 2022. ISSUE 163 JULY 2022 the BANKING EXECUTIVE 9 Figure 1. Reasons why moderate inflation is generally good for the economy (source: cointelegraph.com )