Bitcoin - The ECB pulls out its money printing press

The ECB raised its rates while promising to change the printing press. Bitcoin is appreciated.

eleven years later

The ECB decided for the first time in 11 years to raise its three main interest rates by 0.50%, which is partly surprising given the announcements made last month.

The ECB is indeed back to the wall. Inflation continues to rise within the EU (8.6%) and, above all, the FED raised its main rate by 0.75%, more than expected. This rate differential caused the EUR/USD exchange rate to fall to parity, forcing the ECB to raise its rates faster than expected.

“We expect inflation to remain undesirably high for some time to come”said the President of the ECB. “There is continued pressure from energy and food prices and disruptions in the supply chain. »

Above all, we should say that it lacks pressure in the Nord Stream pipeline… The EU faces a serious inflationary crisis if Russia cuts gas completely, which is likely given the high geopolitical tensions.

So, let’s put it aside by noting that Vladimir Putin has denied that the rise in energy prices originated in Europe. The Russian president put the finger on the EU’s disorderly transition of energy and “an increase of 38% (5900 billion dollars) in the monetary base in two years, as much as in the previous forty years”. “The Eurozone printed 2500 billion euros”, he declared:

“Again, nothing this guy says is wrong.
And yes, the United States is now a net importer of food – and the food deficit is growing month by month. »

The Tsar claims that it is “The monopoly on international reserve currencies enabled the EU and the United States to spend those trillions to plunder the resources of developing countries”.

The euro and dollar actually account for 78% of foreign exchange reserves thanks to the petrodollar. It is also true that the EU is deliberately putting pressure on its own foot by imposing an embargo against Russia.

We promise, however, that this crazy foreign policy probably has the inevitable intention, at least in appearance, to train the Europeans to spend less energy. The ambition is to reduce CO2 emissions. We also promise that this new chapter of the Big Reset it just doesn’t go as planned…

Anyway, Christine Lagarde warned about that “Rates will continue to rise over the coming months.” “The future path of policy rates […] that the inflation target of 2% could be achieved in the medium term”.

This short sentence allows us to remember that the ECB’s sole mandate is to generate 2% inflation per year. Why not 0% or 3%? Nobody knows. Finally, yes, the goal is clearly to reduce the weight of the States’ debt by robbing the savings of the masses.

The Revenge of the Printed Money

The biggest news from this press conference was not the phone rate increase, but the new one “transmission protection instrument” (TPI) of monetary policy.

In other words, the ECB plans to turn on the money printing press again!

Specifically, the ECB reserves the right to buy debt in an unpredictable manner should the borrowing rates of certain vulnerable countries ever rise.

That’s how the world goes… Banks need this monetary morphine to avoid the bankruptcy of certain States.

The TPI is ultimately just a rebrand. The printing press was formerly carried on under the auspices of the “PEPP”launched due to a pandemic, and succeeded by good people “Quantitative Easing “.

But then, what’s the point of raising rates if the ECB is already threatening to lower them by buying more debt? It is very simple. Rates will increase for small businesses and households, but not for states.

It would indeed be a pity when you know that a country like Italy has a debt of more than 150% of GDP… The ECB could even “maybe buy the debt of multinational companies”. Change everything so nothing changes…

So Christine Lagarde offered her moment “whatever it takes”. “The ECB is able to have a heavy hand with the TPI”she sent.

Some eligibility criteria are already known, even if the purchase of these new debts will be at the discretion of the ECB. Countries that benefit from the TPI do not “It should not be subject to an excessive deficit procedure”.

To put it more sharply, European countries will be allowed to roll over their debt if the “The European Commission, the European Stability Mechanism, the IMF and the ECB” to agree.

In short, the money printing will not stop, just like the rise in prices. Bitcoin has a bright future ahead of it as an international reserve currency, and a savings currency for ordinary people.

Get a summary of the news in the world of cryptocurrencies by subscribing to our new daily and weekly newsletter service so you don’t miss any of the essential Cointribune!