Panic in the world due to fears of coronavirus is increasing to such an extent that some Asian states distribute free cash to citizens. Where will this obsession with economic growth lead?
Great hit of Hong Kong
The Hong Kong economy has been battered over the past year or so as protests and rioting gripped the island nation. The Coronavirus (Covid-19) outbreak has added to Hong Kong’s woes as the country plunges into recession.
According to Bloombrg report the government has unveiled a budget packed with giveaways which include a one-time cash handout to its citizens. One of the main features of the annual budget announced this week is a payment of HK$10,000 (approx. US$1,280) to each permanent resident of the city aged 18 or older.
The cash handouts are part of a $15 billion stimulus package but economists are not convinced that giving away free money is the solution.
Anthony Pompliano, a great cryptocurrency supporter, immediately commented on the situation in his Twitter post.
LATEST EXAMPLE OF THE WORLD GOING INSANE:— Pomp ? (@APompliano) February 26, 2020
The Hong Kong government is handing out $10,000 Hong Kong dollars (~$1,200 USD) to about 7 million citizens.
This is part of a $15+ billion stimulus package.
Governments are so addicted to growth that they are doing cash giveaways!
Changpeng Zhao, founder of the Binance Crypto exchange, immediately responded to the contribution. He commented in his comment.
” This is a rare occasion they actually gave it to the people. Usually, it’s just printed and the people won’t see a penny of it.”
He added that Hong Kong dollars can be printed as much as they want, as the Federal Reserve has long been doing. In contrast, Bitcoin’s offer is limited and no more can be printed, which greatly favors this cryptocryptocurrency.
Not just Hong Kong
The island state is not the only country trying to sustain the economy in this drastic way. Singapore has behaved similarly a week ago. The Thai government, dependent on tourism, urged citizens to take a holiday and spend money in their country.
South Korea intends to lower interest rates. Worldwide, the S&P 500 and DAX have seen the biggest slump since the 2008 economic crisis.
The governments of these Asian countries have clearly shown why the limited supply of cryptocurrencies is a real advantage. This artificial kick-start of the economy occurs when no other measures are available. How will the ECB behave when interest rates are already negative?