Greek Crisis and EU Policies

The prevailing monetary system shows it’s ugly side in Greece. People can only withdraw small amounts of their own money. A bloated state apparatus does not pay the invoices from suppliers and craftsmen. Pensions and social benefits will be reduced. Yet for the last eight years the Greece economy has done nothing but collapse.

The trend of the European politicians of literal, uninspired „reform measures“ of raising taxes worsened the situation of the people of Greece even more. A Greek exit from the euro and a reintroduce of the drachma might not address the cause of the problems.

Hayek’s competing currencies and Bitcoin 

The deeper cause of the misery could be the current money system, which is the norm since the end of the gold-backing dollar in 1971. It could have led to countless financial crises and the divergence between rich and poor. The governmental privilege of central and commercial banks to create money out of nothing is leading to a dilution of the value of money and to an unfair preferential treatment of those close to the source of this “out of nothing money “, i.e. primarily bankers and politicians. 

Because of that, it has become much easier to make debts. Since the end of the gold-backing the debt mountain of nearly all states have grown in unprecedented heights. Greece is no exception. At some point the house of debts has to collapse. Greece is only a part of a development and if we do not tackle the development at it’s roots we will all inevitably share the same fate.

The best way out of the crisis would be to abolish the State monopoly on money and to replace it with a free competition of “non-state currencies” like Bitcoin. Bitcoin has the same qualities as gold – both are scarce, divisible, indestructible and tamper-proof. Nobody would work for printed money, if not the compulsion of the State would be recognize it as “legal tender”. Gold and Bitcoin are as money and they are however accepted by the people without any constraint, due to their special qualities. Because of the QE, ABS, OMT programmes of the ECB, Mario Draghi can produce billions of euro out of nothing every day. Do you want your savings devalued?

However the increase in Bitcoins is strictly regulated. The total amount of Bitcoins is limited to 21 million. In contrast to gold it is possible to send Bitcoin in seconds around the world. Therefore it would be the perfect money for the Digital Age. The state will certainly not voluntarily renounce its monopoly on money but as Friedrich August von Hayek has already suggested, the free competition of currencies is already there. The Bitcoin is a closed system which is immune from state persecution. If there is a collapse of the house of debts we would have a well-functioning , global payment system alternative – Bitcoin.

A possible collapse of the House of Debts

If we think about the possibility of the collapse of the house of debts everyone should consider to convert a portion of their money into Bitcoins. Bitcoins have the great advantage that they can not be blocked or confiscated by any power in the world. Bitcoin is digital cash which you can not prohibit. As we have seen in the movie Total Recall with Collin Farrell Future Banks could be more likely physical storage clouds where you can back up your net worth on a USB Stick or even a sheet of paper. Everything you need to back up is a digital code.

After the banking crisis in Cyprus, in which the citizens bank accounts got frozen and the savings of more than 100.000 euro got confiscated, the interest in Bitcoins and it’s course increased significantly. It is to be expected that a similar development will occur in the foreseeable case of Greek , Italian or French national bankruptcy. If you would invest in Bitcoin now, you could benefit from a relatively cheap price.

Save your fortune

Non-governmental currencies like Bitcoin are effective ways to diversify the risk of a possible future house of debts collapse. Do not give the State the opportunity to confiscate your property or to mitigate your fortune through inflation in value. The Greek crisis has made the weakness of the current money system particularly clear. You have the freedom to switch to a better system. To End the Article with a changed quote of House of Cards – “Everything is about Money. Except Money. Money is about Power.“

Book Review:

Bitcoin – Money without State (german)

Sources:

ZeroHedge
ECB
The Economist
Wikipedia Gold Standard
Stratfor