Cryptocurrencies

The ECB takes advantage of the Containment to always print more, Bitcoin (BTC) rejoices – Cryptocurrencies

As we reported last month, following Reuters’ revelations, the ECB will indeed “ease” its monetary policy. “We are not going to sit idly by,” Christine Lagarde said yesterday. Nice Christmas present for Bitcoin which appreciated by 5% in the wake of the press conference …


“Monetary easing”

The ECB said in its statement that the risks to the economy were “clearly trending downward”And that additional measures would be taken if new economic projections so require. As these projections are updated quarterly, we can expect the ECB to open the floodgates in December.

In Orwellian central bank jargon, monetary easing does not mean anything other than printing money (quantitative easing, called QE). The ECB has indeed injected hundreds of billions since the start of the Covid crisis. 1350 billion to be precise. The ECB’s Balance Sheet now stands at 59% of GDP. For comparison, this figure is 34% on the FED side.

Christine Lagarde hasn’t explicitly announced a new layer of QE, but what else can she do? The key rate is already at 0. And it has been since 2016 now. Better yet, banks can even borrow at a rate of -1% through the famous LTRO program. Yes, the ECB pays banks to borrow money from it …

Who knows, maybe one day home loans will also be at negative rates. Why not ? This is all money that will really end up in the real economy. That is to say in people’s pockets … This is not the case with this QE, the money of which ends up being used only to generate stock market inflation. Hence the positive correlation of Bitcoin with the stock markets, by the way.

QE forever

The ECB started printing money in 2012 and now holds around 21% of the debt of Eurozone states. According to calculations by the Citygroup bank, purchases by the European Central will exceed the amount of debt that states will contract in 2021.

And this even though the ECB finally decided not to increase QE in December. The current amount of QE (1.350 billion) implies that the ECB will inject more money anyway than the states will borrow next year. Knowing that the ECB will in fact very likely announce 650 billion more on December 10.

Debt of euro area countries in 2021
“The ECB should buy all new sovereign debt securities in 2021”
Sky blue: ECB debt purchases
Dark blue: Net debt issuance

Citygroup expects Eurozone countries to borrow 1.2 trillion euros next year. $ 800 billion to roll off maturing debt and $ 400 billion in additional debt.

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Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

In other words, the banks will end up with around 50 billion more cash compared to 2020. 50 billion to which will be added the 650 billion that will be announced at the end of the year …

Enough to avoid any stock market crash before the end of the year … But above all, enough to give states more fiscal leeway, because we should remember that the ECB pays states the interest it receives on debts purchased via QE.

The ECB holding a little less than 21% of the debt of the Eurozone, the countries therefore pay only 21% of the interest. Appreciable, especially when we know that the payment of interest (only the interest) represents about 40 billion per year. So much money that feeds bankers’ bonuses and dividends …

Merry Christmas Bitcoin

This is how the modern monetary system is. It is a Ponzian headlong rush, the result of decades of usury and monetary creation from debt. The most successful instrument of slavery of all time, sprinkled with liberal ideology ignorant of the finiteness of our energy resources, is on the loose.

All these billions remain relatively contained in the financial sphere for the moment, fueling the stock market bubble and trickling only very slowly into the real economy. But the containment and orchestrated collapse of economies promise an explosion in budget deficits and, in fine, inflation … Especially when we know that we very probably passed peak oil in 2018 and that the scarcity of raw materials is precisely the most serious inflationary threat.

Global debt is now at the same level as during the Second World War …

Debt of advanced countries in relation to GDP. Historical record
Debt of advanced countries now exceeds 120% of GDP

How did countries deal with the problem at the time? With inflation. It had reached almost 20% per year in the United States by 1946, making it possible to repay debt by robbing the purchasing power of citizens.

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Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

Don’t be the stuffing turkeys. Bitcoin’s absolutely fixed money supply (21 million units) makes it a formidable store of value just like the good old barbarian relic.

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