For Thiel, the management that the issuing entities of money have done leaves much to be desired, for which he considers that Bitcoin it is a revolutionary form of value, and it is precisely the warning signal for many economies to rectify before it is too late.
During the event Bitcoin 2022 currently being held in Miami, the co-founder of PayPal, Peter Thiel, assured that the central banks are currently bankrupt and that Bitcoin is the most honest asset in the world.
Thiel’s controversial statements came to the fore during the conference in which he participated in the well-known event, where he stressed that the management carried out by financial entities has left much to be desired, so Bitcoin It would be like that last wake-up call before a collapse associated with mismanagement of money:
“Bitcoin is always the most honest market in the world, it is the most efficient market, and it would be like the canary in a coal mine.”
And I add:
“They told us that they saw inflation. In the last two years it went from USD $5 to USD $6,000 by a factor of 10x. He is telling us that the central banks are bankrupt… that we are at the end of the fiat money regime. And that is more or less what has affected the price. I think central bankers, Mr. Powell, people like that, should be extremely grateful to Bitcoin because it’s the last warning they’re going to get. They have chosen to ignore it… They will have to pay the consequences on that for years to come.”
Interesting inflation data
To support his claims, Thiel shared with the attendees some data on inflation in certain countries:
- In Lebanon, inflation currently exceeds 219%.
- In Turkey this indicator is over 61%.
- With respect to the US, for February of this year inflation was over 7.9%.
- In the case of Brazil, it recently increased above 10%.
- Cases like those of Venezuela and Argentina point precisely to the most damaging effects in the region.
In relation to Europe, the issuance of euros is subject to the designs of the European Central Bank. In this sense, Thiel rescued the comments presented at the time by Christine Lagarde, who said that “the eurosystem will always be able to generate additional liquidity as necessary”, to which he commented:
“So, by definition, [El Banco Central] you neither declare bankruptcy nor will you run out of money. On top of that, any financial loss, should it occur, would not affect our ability to maintain price stability.”
acute situation for Federal Reserve from USA
In relation to the Fed, Thiel criticized the way in which they have been addressing the local economy in recent years, especially highlighting the overprinting of dollars to finance public spending, a situation that they are now trying to turn around by tightening certain measures and raising interest rates, by time that subtracts capital from reinvestment in bonds and stocks.
For Thiel, the increase in inflation rates is due to the existence of more capital, which is accentuated by the current geopolitical conflicts and the market war between the US and China. Therefore, he projected that if this indicator gets out of control, in practice the FED it would be bankrupt because its currency, the US dollar, would no longer act as a store of value and would no longer be subject to the definition of money.
The speaker did not rule out that the current situation, hand in hand with an increase in basic products such as gas, oil and gold precisely due to the readjustment of their value, will cause the United States to pay higher interest rates on its debt, especially for end of this 2022 if the readjustment that the FED will make to the interest margin does not exceed 2%.
Thiel defines this situation as insolvency, since the lending rates will increase faster than the economy, so the only real way out is to encourage economic growth, which would require important reforms, which are not going to happen fast enough. .
Angel Di Matteo version / DailyBitcoin
Picture of unsplash
WARNING: This is an informative article. DiarioBitcoin is a means of communication, it does not promote, endorse or recommend any investment in particular. It is worth noting that investments in crypto assets are not regulated in some countries. May not be suitable for retail investors as the full amount invested could be lost. Check the laws of your country before investing.