Central Banks are having a blast. After the European Central Bank (ECB) and the Bank of England (BoE), the Fed has in turn come to promote its printing press this week. Bitcoin (BTC) feels like a fish in an ocean of fiat currency.
Hundreds of billions of euros for Christmas
The BCE unsheathed the first last month. Christine Lagarde has hinted that billions are in the pipes for December. “ We won’t stand idly by She said, opening the door to a new layer of QE (printing money) which will likely be unveiled on December 09.
This week, an ECB spawn came to give more weight to this scenario by telling the Belgian daily L’Echo that the “second wave” was going to cause defaults. Andrea Enria said she expected the amount of loans no longer repaid reaches 1.4 trillion euros, or the equivalent of 11% of GDP. For comparison, this figure had risen to “only” 1000 billion during the 2008 crisis …
Containment throughout Europe is wreaking havoc among small traders and the ECB intends to take advantage of this to flood the banks with hundreds of billions more. So much money that will eventually water the debt ponzi as well as inflation.
This inflation will be exacerbated by the decline in oil supply to Europe and therefore, mechanically, economic growth. Indeed, let us recall that European oil imports have stopped growing since 2010 and are now declining by an average of 0.5% per year … This is sure to delight the President of the ECB who recently unilaterally suggested abandoning the he sole mandate of the ECB, namely to keep inflation below 2% per year.
The Old Lady puts on a layer
After £ 650bn spilled in March, the BoE decided on Wednesday to add £ 150bn more. A measure taken in reaction to the confinement which should reduce consumption by 11% in the fourth quarter.
The BoE expects GDP to decline by 11% as well, thus forecasting not only lower consumption but also lower foreign investment (Brexit).
The BoE governors expressed their readiness to increase QE again if the inflation outlook worsens. In other words, the British will print whatever it takes to ensure that rising prices (and therefore rising VAT revenues) continue to ease the debt burden.
Same story Thursday on the side of the American Central Bank. Jerome Powell reiterated that the Fed is aiming for inflation “moderately” above 2% for “some” time …
The Fed in the shadow of the presidential election
The Federal Reserve did not need to take out the heavy artillery as the US stock market prances despite the democratic circus and the accusations of electoral fraud. As Republicans retained their majority in the Senate, fears that Joe Biden would raise taxes faded along with short positions.
Nonetheless, Wall Street is not Main Street … The downed economy due to lockdown has offered the Fed chairman the opportunity to push Congress into deepening the budget deficit. Jerome Powell called on US Congress to vote for a second ‘stimulus package’, arguing that he ” better to spend too much rather than not enough “.
A speech in line with the ambition of the FED to orchestrate this price increase absolutely vital to perpetuate the system of debt slavery …
The Covid crisis is bread and butter for bankers who can finally justify the monetization of debts and the distribution of trillions to commercial banks. So much money that will largely end up in the pockets of multinationals ready to replace all the small bankrupt traders. #Amazon
All is well for Bitcoin
The millions of unemployed Americans will receive a new check for $ 1,200 through the second stimulus package. The first check was sent on April 15, 2020.
A person who immediately exchanged that $ 1,200 for Bitcoin would now have $ 2,860 as the value of Bitcoin has since dropped from $ 6,500 to $ 15,500. That is an increase of 138%.
We cannot print with impunity… Distributing a universal wage while preventing people from working will inevitably end in monster inflation. Especially when we know that we crossed peak oil in 2018. In this context, Bitcoin will continue to play its role of store of value with the 6 figures in sight …