The entire edifice of support for the economy rests on confidence in the currency, as analysts at Natixis note.
Key quotes
“Maintaining confidence in the currency is essential for central banks to be able to use quantitative easing, under which economic agents hold more money, since they do not want to hold all the government bonds that are issued.”
“If there is a loss of confidence in the currency, the prices of assets that compete with the public currency must rise: gold and cryptocurrencies.”
“In the recent period, the price of gold has risen, but cryptocurrency prices have not.”
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