“I have come to the position of asking, has monetary policy ever done any good? I don't think it has. I think it has done only harm.”

FA Hayek

There was a time when the ECB produced quality content on Bitcoin.

In fact, the European Central Bank was the first major central bank to write a somewhat comprehensive report on Bitcoin, back in 2012.

Lately, they have struck another tone though.

Now it shouldn't come as a surprise that the bureaucrats at the central bank don't like Bitcoin. It's a technology aimed at obsoleting the institution they work for. Bitcoins whole philosophy runs contrary to the concept of centralised control over money.

And the worst part - for them: it works!

So rather than seeing it as somewhat of a curiosity, the ECB is seeing Bitcoin as a threat now. We've had a couple of hit pieces published by ECB staffers that where published in the German press lately. But the newest addition coming directly from the ECB is something else entirely…

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So how can we identify a hit piece? Well, these German articles didn't even try to explain why a growing number of people are putting their trust in Bitcoin. The authors didn't find the time or energy to at least mention the positives - of which there are many. They just bashed Bitcoin with every single argument they could come up with in order to smear the technology and the people using it.

This, ladies and gentlemen, is how propaganda works.

If the "other side" can never do any good, that's propaganda.

The positive aspects of fiat money

You see, I have no problem mentioning the advantages of fiat money and the Euro. I believe that the gold standard did some good, especially in a low technology era, but I see why it had to fail. A system that can be abandoned at will is a bad system.

I agree with the idea that money and currency should ideally not be used for anything else. Fiat money is a sort of synthetic commodity money, managed by the state under certain rules. Some are political, others economical. Some are depending on external circumstances and some are self imposed. Fiat money and central banking was a technology well suited to its time.

But just like the gold standard, it had its dark sides. One of which was the total corruption of the way we talk and think about economics. Generations of economists never asked themselves "what is money". They just took for granted that "money" is whatever the government says it is. A ludicrous idea from the perspective of first principles but we ran with it.

Why I do like the idea behind the Euro

As I said: I like a lot about the Euro as well. I studied it's history extensively and I do agree with the idea of a sovereign European currency, built on solid foundations, that can rival the Dollar and provide an alternative to the utterly broken system of Bretton Woods and the dominance of the Dollar.

I also agree with the idea of strict rules that countries need to abide to and that it's a wise idea to limit the influence of nation states on the monetary policy.

But what I disagree with is the way it was implemented in practice. Right now the Euro looks to be what the Americans always wanted it to be: a total disaster. Inflation is running hot. The rules were broken immediately and what is left is nothing but empty words.

At the moment the ECB is trying to tighten monetary policy while at the same time finding a way to still pump money into Italy because otherwise both would collapse: Italy and the Euro.

Yeah, it's pretty bleak.

ECB-staffers, what are you even doing?

And in the middle of this unmitigated disaster that is endangering the livelihoods of hundreds of millions of Europeans, the tax funded bureaucrats at the ECB have the audacity of attacking Bitcoin once again by comparing it's proof of work consensus mechanism to the "petrol car" (bad). And framing proof of stake as the "electric car" (good). You can read the whole thing here.

It does boggle the mind really.

ECB-economists, I have a few questions.

1. What is the carbon footprint of a central bank that employs 3500 people, payed with our money, who are 100% unproductive and add nothing to society?

2. What is the carbon footprint of 19 national central banks that employ tens of thousands of people, payed with our money, who are 100% unproductive and add nothing to society?

3. How in the world will we ever reconcile the idea of environmental sustainability and "growth" in the fiat money sense of ever rising debt mountains?

4. How will we ever enter into a system of long term sustainability if you take away the ability of the individuals to plan long term by inflating the money?

5. How are we ever going to stop the trend of wealth inequality rising if inflation is the main mechanism driving this trend?

6. How are we ever going to have a sustainable financial and societal system as long as permanent inflation leads to an ever higher time preference, rampant consumerism and the breakdown of society as a whole?

Don’t let fear guide you

So, yes, there are good things to be said about fiat money

There are good things to be said about the Euro.

But with a central bank like this, both concepts have no future. The way the ECB is going at the moment is frightening to say the least. I have little love for the Fed but at least their economists take the innovation of Bitcoin somewhat serious and add to the debate in a meaningful way by analysing the role of the Lightning Network.

But the propaganda coming out of the ECB right now is embarrassing. It needs to stop. Neither the EU, nor the Euro or the ECB can survive the utterly idiotic idea of a "Bitcoin ban".

Look, ECB-staffers. I know what is driving you. You are scared. And at least some of you seem to be invested in proof of stake shitcoins.

Don’t be guided by fear and greed.

Let it go.

You're AOL. You're Blockbuster. You're Altavista.

If you try and fight new technology, you will fail.

Let it go.

This post is sponsored by…

21bitcoin - The easy way to buy, sell, save and send Bitcoin.

21bitcoin is a Bitcoin-only app, not an exchange. No distraction, individual savings plan, very low fees, first class personal support, and a German bank account. Based in the Austrian Alps, available throughout Europe. Download.

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