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According to economists at Natixis, the extremely rapid growth in the money supply in OECD countries may give rise to a loss of confidence in OECD currencies among economic agents due to fears of a loss in the value of money.

Key quotes

“Central banks in OECD countries have implemented a considerable increase in the money supply. If there is excess money supply, economic agents anticipate the loss of value of money, and in an extreme situation, this leads to a loss of confidence in money and a flight from money (an attempt to get rid of money before its value falls).”

“Even though the rise in overall stock market indices has not yet been very pronounced and real estate prices or corporate valuations have not yet risen abnormally, and the price of gold is no longer rising, the fact that we are seeing an appreciation of the exchange rates of safe-haven and emerging currencies, a sharp rise in the price of Bitcoin and in the stock market indices of technology companies perhaps shows the beginnings of a loss of confidence in OECD currencies.”