Bank

2024

when

<p><strong>The European Central Bank has once again lowered its key interest rate. The increase in the money supply will accelerate again. A good omen for bitcoin.</strong></p>
<h2 id="h-la-baisse-des-taux-continue">The rate cuts continue</h2>
<p>The ECB has once again lowered its key interest rate after a <a href="https://www.cointribune.com/en/bitcoin-european-central-bank-ecb-reopens-the-floodgates/" target="_blank" rel="noopener noreferrer nofollow">first cut in June</a>. It is now set at 4%, down from 4.25% previously.</p>
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<p>The markets expect the Fed to follow suit next week. That’s what the Fed chairman hinted at during his <a href="https://www.cointribune.com/en/bitcoin-the-fed-paves-the-way-for-100000/" target="_blank" rel="noopener noreferrer nofollow">Jackson Hole speech</a>.</p>
<p><a href="https://www.ecb.europa.eu/press/press_conference/monetary-policy-statement/2024/html/ecb.is240912~4f7b17040c.fr.html" target="_blank" rel="noopener noreferrer nofollow">Christine Lagarde</a> stated that the ECB expects an average inflation rate of 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026. That makes nearly 7% in total.</p>
<p>This would be better than the 17% cumulative inflation of the past three years in the eurozone. And nearly 20% for the entire EU.</p>
<p>Here are the inflation figures in France. In red is the overall “official” inflation… In blue is energy inflation and in green is food inflation:</p>
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     <p lang="fr" dir="ltr"><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f4c8.png" alt="📈" class="wp-smiley" style="height: 1em; max-height: 1em;"> En 3 ans, les prix ont grimpé de +15,2% en moyenne selon Eurostat, avec +22% pour l'alimentation et +47,8% pour l'électricité et le gaz… <a href="https://t.co/NvufVh0yVw" rel="noopener noreferrer nofollow">pic.twitter.com/NvufVh0yVw</a></p>— Nicolas Teterel (@NTeterel) <a href="https://twitter.com/NTeterel/status/1834271336991998312?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 12, 2024</a>
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<p>If inflation seems tamed (for now…), a recession should also be avoided. Nor should there be a slip-up in public finances, hence the rate cuts.</p>
<p>Indeed, the bill is steep for governments. France, for example, borrowed at an average rate of 3.15% in 2023. This is much higher than in 2022 (1%), not to mention 2021, when the country borrowed for free.</p>
<p>Yet the French debt is not small. It exceeds 3,100 billion euros, or 110% of GDP. As a result, interest now amounts to 70 billion euros per year. Less in reality since the ECB holds about <a href="https://www.cadtm.org/Taxes-are-not-used-to-pay-off-debt" target="_blank" rel="noopener noreferrer nofollow">25%</a> of the European debt (~25% of the interest is therefore returned to the states).</p>
<p>Nonetheless, we are talking about tens of billions. We pay more in interest than for education or defense. The interest alone consumes all the income tax revenue.</p>
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<p>Since 1974, interest has been responsible for 53% of the accumulated public debt of France. These 53% are represented by the blue curve in this graph:</p>
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     <p lang="fr" dir="ltr">Ceci représente l'évolution de la dette française (3 100 milliards d'euros). <br><br>La partie bleue (plus de la moitié de la dette) est liée aux intérêts. <br><br>Dit autrement, notre dette serait deux fois moindre si l'État avait payé 0 % d'intérêt. <a href="https://t.co/Ab9fAV15Uk" rel="noopener noreferrer nofollow">pic.twitter.com/Ab9fAV15Uk</a></p>— Nicolas Teterel (@NTeterel) <a href="https://twitter.com/NTeterel/status/1834264138421243906?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 12, 2024</a>
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  [If we accumulate the interest paid for servicing the public debt throughout the 1974-2023 period and assume that this interest is included in the public deficit, their cumulative amount reached 1,640.6 billion euros in 2023 or 53% of total debt. The other cumulative components of recorded public deficits account for 1,188 billion euros (38.3%). The remaining 8.7% are asset purchases. Source: <a href="https://www.ifrap.org/budget-et-fiscalite/depuis-1974-les-interets-de-la-dette-representent-53-de-lendettement-cumule-par-la-france" target="_blank" rel="noopener noreferrer nofollow">Fondation Ifrap</a> ]
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<h2 id="ponzinomics">PONZINOMICS</h2>
<p>These interests are the reason why the fiat system is a ponzi. We borrow to repay. In short, we accumulate interest on interest, which is a mathematically exponential process.</p>
<p>Let’s repeat it. The fiat system is a ponzi. Every penny in circulation (dollar, euro, yuan, etc.) comes from a debt that is waiting to be repaid with interest. That’s why the amount of money in circulation MUST increase and will continue to increase.</p>
<p>The consequence is the loss of purchasing power of fiat money. The dollar has lost 97% of its purchasing power since 1913. It’s 40% for the euro since 2000.</p>
<p>The rate cuts mean that the total debt growth (households and businesses) and thus the amount of money in circulation will resume.</p>
<p>And given that we are reaching the physical limits of growth (peak oil), this money is preparing the bed for the next inflationary crisis. Our article on the subject: <em><a href="https://www.cointribune.com/en/is-bitcoin-truly-magical-2/" target="_blank" rel="noopener noreferrer nofollow">“Is bitcoin really magical”.</a></em></p>
<p>All this to say that long-term savings should not be kept in a bank account. You need to invest it in something safe. And nothing is safer than the limited supply of 21 million bitcoins.</p>
<p>And don’t count on retirement. Italy and Germany are already whispering 70 years…</p>
<p><em>“But bitcoin is too volatile,”</em> you say? Then read the clear <a href="https://www.cointribune.com/bitcoin-michael-saylor-predit-13-millions-par-bitcoin/" target="_blank" rel="noopener noreferrer nofollow"> response from Michael Saylor</a>.</p>

The ECB Opens The Credit Floodgates A Little More

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