ECB cuts interest rates in an attempt to save fiat from certain doom. But is this step necessary?
Saving fiat is a key priority for the European Union’s Central bank even if it means sinking the interest rates below zero (0). The monetary body overseeing the Euro has the interest rates cut by 10 BSP and so the numbers went from 0.1% to -0.5%.
The central bank aims to buy bonds and other financial assets worth twenty-two billion Euros (€22B) in bonds and other (tangible) assets while having the press mint more fiat that doesn’t yet exist- quantitative easing (QE)- so that economic stability isn’t threatened. Bitcoin unsurprisingly is certainly not on the list of monetary assets.
ECB cuts interest rates? Why?
This is a direct result of President Trump calling in the Federal reserves to cut down the monetary rates to zero (0) or less. Negative rates aren’t a far-fetched ideology anymore and the former chairman of the monetary authority, Alan Greenspan saw this coming. He, however, had predicted the monetary rates to drop into the negative zone for the US.
The Federal Open Market Committee (FOMC) has had its mind made up by now about the rate cuts for the meeting that is to be held in September. This committee is responsible for making interest rate decisions while Federal Funds are due for their cuts up till September 2020 when the meeting is held again.
The Bitcoin explosion
Cryptocurrency, especially Bitcoin has favored from fiat exploits that have occurred or will occur as the “US-China Trade War”, or Brexit –when it happens. Injecting liquidity into fiat only promotes cryptocurrency and benefits it in the long run.
But that’s not all, Travis Kling belonged to a Wall Street firm, working there as a portfolio manager before he got fascinated by cryptocurrency, says that the aforementioned policies are equivalent to death warrants for fiat and before we get to see who wins this race, non-tangible assets will be thriving.