The world votes for the bitcoin

There is a problem in Europe: The ECB should have a bond portfolio in the amount of 2.3 trillion euros by the end of the year. But it is more complicated. The ECB has been saving indebted south-European economies by those bonds-buyouts. It is the biggest creditor of European governments. So the ECB is going to be under a giant political pressure not to raise the interest rates.

Moreover, the south of Europe needs low interest rates for another reason too. Italian banks are having problems with bad loans. While the bad loans had a share only of 3 % in the year 2009 today it is even 13 % (!). Raising of the interest rates might endanger the banks.

On the other hand, keeping the interest rates on the current levels is also wrong. Even though Europe doesn’t have a traditional consumer inflation, the growth of prices has manifested elsewhere. It looks like there is a mortgage bubble in many countries, stocks are incredibly high and digital currencies are growing to all-time highs as well.

While the bitcoin was at 1000 dollars at the beginning of April, it is at 2725 dollars today and it has been almost on 3000 dollars at the beginning of the week. That’s why the chief of Bundesbank warned of the dangers from digital currencies. It is understandable. Everything is heading towards the digital currencies replacing the current currencies one day because the central bankers are failing. So the fish doesn’t want to drain the pond.

Reactions on the bitcoin are coming from the investment banks as well. Morgan Stanley is asking for the bitcoin regulation. I think that the fewer people trust the central banks the higher the bitcoin would go. It is a reaction to the scepticism in society. Gold is doing similarly. It is important that it is growing in the long run. Today it is at 1270 dollars per ounce and it was at 670 dollars ten years ago. The more complicated the world is the more interesting gold is.