“A useless piece of paper.” Minneapolis Federal Reserve
“The existence of Bitcoin impoverishes.” European Central Bank
Could these two sentences, expressed by central bankers from the United States and Europe, be more ironic? At first glance, it seems not. One would say, with a mocking smile, hiding a hidden rage, that these people couldn't be more shameless. Besides, when reading them, one feels disoriented, as if one had traveled to the past, due to the anachronism of reading these things almost at the end of 2024. Then one remembers, puts oneself in context, and realizes the impudence of the papers published in the name of these institutions. One is reminded of the glibness with which Neel Kashkari, president of the Minneapolis Federal Reserve, said that “the Federal Reserve has an infinite amount of cash,” right in the middle of the most vertical cycle of monetary mass increase in history; the same cycle of increases that brought annual US inflation in 2021 to 7% and that in 2022 to 6.5% and that even today threatens recessions or worse scenarios.
We must not forget that the Fed multiplied the monetary supply by four, taking it from USD 4 trillion to 20 trillion in just two years. Source: St. Louis Fed. One also remembers, without going too far, the monetary policy of the European Central Bank, and how they had the skill and expertise to weaken the purchasing power of the inhabitants of the euro zone by up to 10.6% by October 2022.
Inflation is just a technical word for saying that your money buys less and less. Source: European Central Bank. One remembers, and this is key to understanding this article, dear reader, the Cantillon effect, which, as economist Jonathan Newman explains:
refers to the uneven effects of monetary expansion. New money enters the economy at a certain time: whoever first spends new money purchases goods on the market, and those sellers can now use the money to increase their demand for goods, and so on. Money spreads from its source, providing real benefits to those closest to the center. As new money is spent, prices rise, meaning those who increase their income later in this spending chain (or never) are the “losers” in this process. In our modern world, with fiat money and central banking, the government, banks and privileged financial institutions are at the center. Those on fixed incomes and those with no assets to sell to those at the top of the spending chain are on the periphery. Printing money creates winners and losers, and perpetual printing money creates big winners and big losers. Dr. Jonathan Newman, member of the Mises Institute.
But one, who comes from Venezuela, who has suffered personally and that of his family, how easy it is for those agents who are “closer to the center.” steal your money through monetary issuance; and who knows how many people for having an alternative like Bitcoin was a lifesaver (but literally a lifesaver); then one feels how the sarcasm that one spreads to make the fiat reality slip away transforms into indignation. Outrage at these pieces of propaganda, disguised as academic research, which They try to attribute to Bitcoin the evils created by the central bank itself of the fiat system.
Calling Bitcoin a useless piece of paper (Paper? Paper. But what paper?) and calling for it to be banned, just as the Minneapolis Fed did, because it prevents the state from implementing “a permanent primary deficit through nominal debt”, or, in other words, that the present is mortgaged so that those of the future pay it, is openly declare the impotence of the Central Bank against Bitcoinwhile frustratingly insisting on using force to prolong economic management through debt. Saying that the distributional effects of Bitcoin are impoverishing for society because they make those who first understood the superiority of this monetary alternative richer and not those who did not take the time to study it, not only insists on a paternalism that keeps people in financial irresponsibility, but falls into the impudence of attribute to Bitcoin the cantillon effect from which central bankers have profited so much for years. But, as we say in the headline of this article, those pieces of propaganda They are just drowning kicks. The reality of the world is moving towards the normalization of Bitcoin in society. Whether through its integration into traditional finance or even within the same political caste, Bitcoin is already increasingly integrated. Hence the feeling of anachronism that one experiences when reading them. And the most important thing of all is that this integration occurs without the need for its rules, its internal monetary policy, to adjust to anyone's requirements. In short, what bankers complain about is that Bitcoin takes away their tools to enrich themselves and impoverish the population. But that was exactly what Bitcoin was designed for.
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