Key facts: Conde criticizes the belief that buying public debt is a way to protect oneself from inflation. The Spaniard highlights bitcoin as a scarce and useful asset to preserve wealth. It is not common for a former banker to talk about inflation in the way that the Spaniard Mario Conde does, who after several years disappearing from the public arena, has reappeared, mentioning bitcoin (BTC) and the characteristics that make it an asset useful to protect against the devaluation of fiat money. «Those who want to preserve their fortune in fiat assets should know that they are wrong if they think they will achieve it this way,» said the Spanish lawyer and businessman.
«Every year, only because of the inflation effect you lose, and also if a disaster occurs in the supply and demand of certain financial assets, you also lose more. That is because fiat money is no longer an instrument of value preservation«. Mario Conde former Spanish banker.
Count responded questions and gave advice of cHow can Spaniards protect themselves from the loss of purchasing power who are suffering rapidly. And before giving his own recipe, the former banker analyzed formulas that are usually applied, in a traditional way, to protect against inflation. «There are people who say that what you have to have is liquidity, and they fall into the trap of buying public debt, which will pay you less than real inflation,» said Conde. He then referred to the custom of buying assets that preserve value, such as gold, or land to protect themselves from inflation. Although, warned that, in this way, there is the disadvantage of playing with profitability (preserve value), vs liquidity (when you need the money).
“You say that you are going to buy an apartment because it is very cheap or because you have the opportunity, but the moment you need the money, you put the apartment up for sale and it is difficult for you to sell it. That's because there is no liquidity, and if there is not, you will have to sell it at whatever price, and if you sell it at whatever price, it means that you have not preserved the value. With gold it's the same, because what are you going to do? “Carry the ingots in a wheelbarrow?” Mario Conde former Spanish banker.
Mario Conde advises taking refuge in bitcoin to escape inflation. Source: X/Luis Miguel Value.
Bitcoin is an instrument of defense against inflation
For Mario Conde, bitcoin solves problems that arise with other assets traditionally considered to preserve value. This is because it is more liquid than real estate or land, and it is also easier to transport than gold. Conde also highlighted characteristics of bitcoin, such as decentralization and monetary policy based on scarcity. Because of that, there will never be more than 21 million of coins, given that this limit is established in the code of the cryptocurrency created by Satoshi Nakamoto. So based on the principle of bitcoin scarcity, Conde asks the rest of the world to understand that: “it is not that the price of things goes up, but rather that the value of fiat money goes down. And it is not that the price of bitcoin is rising, but that the euro and the dollar are becoming less and less valuable.” Later, the Spanish banker spoke of the volatility of bitcoin, as this is one of the reasons why many people reject to the pioneering digital currency. “Of course, the price of bitcoin fluctuates a lot because it is determined by supply and demand. But no matter how much it fluctuatesthe price line that BTC has had since its creation is ascendingwhile that of the dollar and the euro is decreasing,” he explained.
The price of bitcoin has fluctuated throughout its history, but in the long term it has always risen in value. Source: Investopedia. Next, Conde challenged people to calculate the profitability obtained from saving in bitcoin in the long term, to compare the result with what they could have obtained by saving fiat in banks.
“And if not, go and see what you could do with a dollar 20 years ago, when you could even pay for one night in a hotel. Now think about what you can pay with a dollar or a euro today and you will see how volatile they are. Therefore, the most important thing is that you realize that fiat money is no longer an instrument to preserve value, and when you are clear about that, you will see the light. If, on the other hand, you continue to think that the money you have in the bank is a preserver of value, over time you will see that it is not.” Mario Conde former Spanish banker.
Therefore, Conde goes to bitcoin as a good preserver of value, and is due to the fact that it allows liquidity, profitability and risk to be managed. “And forget about fiat money because politicians have lost the power to invent good money,” he pointed out.