The European Central Bank (ECB) yesterday again: she has lowered the key interest rate and its bond-purchase programme to be confirmed. Absolutely determined, Mario Draghi, to do everything you can to create Inflation and avoid a recession. A positive effect for the real economy, hardly anyone still believes, however,. As the monetary policy of the next few months will look like, why Tokenization, financial bubbles, both create as well as combat and what is the role of crypto-Trojans will play in the monetary policy in the future.
By Sven Wagenknecht
13. September 2019BTC$10.304,79 -0.09%part Facebook Twitter LinkedIn xing mail
The Increase of the share indices in the last years is mainly due to the low interest rate. The relationship between the risk of an investment and its potential yield corresponds to the expansionary monetary policy of the Central banks is hardly a fundamental of the market and economically justified price. The rates or prices of equities, bonds and real estate will not rise due to its economic attractiveness, but due to the prevailing complex emergency.
It is becoming increasingly difficult to find suitable Investments that meet the investment criteria and objectives of the investors. Thus, insurance companies are hardly in a position to ensure that the promised guaranteed interest rate in life insurance. This circumstance shows, that we are already struggling with a high Inflation. This, however, takes place not in the real economy, but almost exclusively in the financial sector.
Central Bank policy following the Japanese model of
a rule is broken out right competition in the pursuit of Inflation. The combination of export benefits, and devaluation of one’s own debt is extremely tempting for the highly indebted countries. USA, Europe, China and Japan are in competition to the maximum devaluation. Where the journey goes, shows the debt-champion Japan. Not absolutely, but relatively to its own GDP, Japan has almost 240 percent of its GDP, the highest public debt in the world.
[view] buy Bitcoin with the Bitwala account. Why have a Bank account with Bitwala? A Bank account is “Made in Germany” with protection of deposits up to 100,000 euros; 24/7 Bitcoin trading with faster liquidity; trading only ‘real’ Bitcoin has no financial derivatives such as CFDs; Secure users of lift-off control of the Bitcoin Wallet and the private key; With the contactless Debit Mastercard worldwide, and pay.
open Now free account
USA (about 100 percent), Europe (80 per cent) and China (50 percent) have so much air to the top. In particular, the United States benefited from the same advantage as that of Japan, that all the state record liabilities in their country’s currency. Thus, as long as all of the major economic zones to a similar expansionary debt policy, can accept in spite of increasing systemic risks, the monetary policy Odyssey is still far more extreme traits.
What does this mean for the Euro?
Against this Background, the further procedure of the ECB can be a good idea. Of the European governments to keep the Eurozone stable, to the high level of sovereign debt to Finance, and to ensure international competitiveness, the ECB has no other option than to make all of the available tools ready to use.
The Buy out of state and, under certain circumstances, even corporate bonds – to a macro-economic assumption of command must be the last Option. The so-called helicopter money has been listed in the past as an Option. The Narrative of the monetary stability is thus led ad absurdum, however, you can fuel directly to the Inflation in the real economy. The money is not lost in the financial sector, but to land directly in the citizens, the Goods and services can be bought.
The biggest bubble of all time?
just like taking high doses of painkillers, such monetary policy is not a permanent good to go. A side effect is the formation of bubbles. Just like the financial crisis of 2007, we can know at present, similar patterns in the real estate industry (especially in China) and in other sectors. The major disadvantage is that, in contrast to that time, the interest rates are already at the bottom, while the state debt is record higher. In short: When this financial bubble bursts, there is no room for manoeuvre to counter measures the attack to initiate.
This is not to prescribe the biggest bubble in the real estate sector, but in the States themselves. While in the past Central banks, insurance companies and investment funds were considered as a reliable buyer of sovereign bonds, to stabilize a logical step to bring more actors into the boat. The more stakeholders are involved, the greater the probability of higher debt pile up, and this socially and politically “to get you through this is”. Stronger than so far, businesses and households in the state debt service could be involved. At the precise location where crypto-currencies come into play. Or otherwise formulated: the privatization of money with national debt as the base value.
On the packaging it comes in – crypto-Trojan as the future trend in the public debt
Even if Facebook’s Libra attracts the resentment of the regulators, and the Coin is a compelling ACE in the hole. It is intended that US government bonds to cover the Tokens to buy. Finally, it is likely to dominate in the currency basket of Libra, the US Dollar against other currencies and government bonds. Because of the Facebook Coin, however, is not only on the US Dollar-currency space is limited, but generally throughout the world can be used, resulting in a global debt distribution of US government debt.
if the success of the Plan of Facebook and the Facebook Coin be used in developing countries as an Alternative to the value of the unstable domestic currency, the US sovereign debt might find new customers. Anyone who pays with Libra, pays, indirectly, with U.S. government bonds. The US Dollar is reinforced by his private-sector counterpart, only more as a global reserve currency.
increasing pressure, “private dollars” to allow, in particular, from China. Even the Chinese Central Bank can. with your digital Central Bank currency, which should come out this year, their debt to other countries and export to several shoulders to distribute However, only the Chinese crypto-colonialism is not challenging the US, but the fact that a state or a Central Bank by diital Fiat more control currencies receives options via their own population. There is no currency in the world that is even close to being as little anonymous as Libra, or China’s future digital Renminbi.
in order for this To be effectively implemented, cooperates with the Chinese Central Bank with domestic companies. After all, these are unlike you in the situation, the supposed crypto-currency directly to the population. Companies such as Alibaba or Tencent, cooperating with the Chinese Central Bank, can perform as an extended Arm of the Central Bank, direct Central Bank policy on the consumer level. In the face of impending economic turmoil, you can expand the capacity of the Central Bank.
token tion against Overvaluation in the equity markets
fight in addition to the coverage of private currencies (Facebook) by government debt or Central Bank crypto-currencies (China), but can also play the tokenization a crucial role in the plant emergency and the purchase of assets.
a quantity of money-induced Overvaluation of existing assets, is the development of new Assets is of great importance. The Tokenization can work like a valve, the air from the current financial bubble is. Only a very small proportion of all companies listed on the stock exchange and can serve as an asset for the Fund. Consequently, the majority of the capital is not bound in the case of listed companies.
to Facilitate the accessibility of capital investments in medium-sized companies – in Germany, mainly limited liability Companies – would be reduced, the pressure of the investment funds, to invest in the already overbought stock indices. The Oversupply of capital can be distributed on several shoulders, in this case SMEs, the tokenized your shares in the company and secondary market have made. The token tion can thus contribute to a stabilization of the financial markets and the Investment opportunities, reduce.
Even if none of the above-mentioned vehicle, is established, whether Facebook Coin, Chinese crypto Central Bank money or significant token-focused medium-sized companies, at the present time, you will be playing in the next few years, an increasing role in the financial sector. Of creativity are known to be no boundaries.
The Janus face of the crypto-Economy
On the one hand, the crypto can Economics be a second safety net for the global financial stability. The simplest example of this is Bitcoin, as the Central Bank is independent of the value of the medium. But crypto-currencies with reference to government currencies and bonds, see Libra, can potentially lead as a kind of Backup currency of the private sector to a greater resilience. In addition, digital Central Bank will offer currencies, the possibility of a Central monetary control even more efficient to implement.
On the other hand, a complex cryptographic load values-financial constructions with a non-performing basis (e.g., junk bonds) to the increased number of bubbles to form. The clever securitisation and Apportioning of Asset-Backed Securities, had finally led to the financial crisis in 2007. It does not matter whether you are bundling toxic securities mentioned in certificated securities, or digital Token. The only difference is here, unless it is a public Blockchain, in the Monitoring of the Assets. Under the assumption of a greater transparency, you can detect the warning signs earlier.
More:
Swiss Finma to Facebook’s Libra: “International action is essential,” Swiss Central Bank chief: So Libra is endangering the monetary policy to fight the Central banks: Why China with a digital Central Bank’s currency against the US upgrading#ECB#Libra#Central Bank
