Topic: ECB to start quantitative easing. Bitcoin beyond the moon? - page 2. (Read 3841 times)

Capital control within the Euro zone might be required as well. The money might just flow into Germany, and not where it is required.

ECB is trying to stop deflationary collapse and prevent bank from going bust.

That will not work unless they do exchange control also since it will become cheaper to buy product/asset outside the EURO zone.

The two situations are quite different. The reason QE in the US hasn't led to rampant inflation/rush into commodities is because they've kept commercial interest rates low but the fed has singularly offered a favourable interest on excess reserves to banks.

This policy has arrested all the new money and pulled it back onto the fed balance sheets, so although the theoretical money supply has massively increased, it hasn't found its way into the economy. This policy has been successful so far in preventing a "Weimar" situation, but a couple of things could change all that:

[1] - a new round of wage growth which puts pressure on interest base rates to go up again

[2] - a currency war - e.g. with the Rouble or the Remnimbi

Europe, on the hand has been suffering from the opposite problem - deflation. Relaxed monetary policy by the ECB has suffered from a lack of "transmission" into the real economy. (To me and you that means that people are sick of debt and so haven't been borrowing. If they're not borrowing then no new money can be created and the economy suffers from a liquidity drain). There just isn't enough money around for the economy to grow. It's no use central banks printing money if the commercial banks can't "lever" that new capital via the fraction al reserve system.

In conclusion, I think a round of QE be the ECB won't have any net effect on Bitcoin, but will be symptomatic of the last 5 years of policy having failed to achieve growth. It might be seen as the ECB "throwing in the towel" and not knowing what to do next. It will probably boost the stock market in the short term cos there's nowhere else for the money to go.

All of this will be a precursor to major economic revaluation which could then see Bitcoin start coming to the fore as one of the "new economy" target commodities.

lol he thought you meant Bitcoin with a sure loss. That sure made me chuckle 

Keeping one's money in fiat is a sure loss because of inflation. That's what I mean.

idk but if QE fails thats the end of the road for fiat.

I wouldn't call bitcoin a "sure loss"... but at this point I'd say it has a good 50% (if not more) of fading to obscurity. The upside potential isn't nearly as fantastic as the pumpers here would like you to believe.

Also, keeping your money in fiat isn't "winning" but at least it's safe.

What is the difference between a sure loss and a 99.9% chance of winning?

And why would people ditch their fiat, which has a historically low, steady inflation rate for bitcoin, which has dropped in value 50% since the start of the year with no end in site?

See, you guys need to stop and think about this shit for a moment.

Or stocks.

buy Bitcoin

The ECB will be printing many many euros to prevent deflation.

Could someone provide an easy explanation of what that means? I think we should have a short concise explanation in the opening post as to what this implies and potentially means for us. Preferably an objective and not too biased one

So, it's CCMF really!!!

as a cycle analyst, i would not be buying stocks in any non-US market based on assumptions that QE will drive prices.  it could in fact make it worse.  look at the charts of Germany, Spain, and Italy.  they've all rolled over and assuming QE is going to change that is risky.  comparison to the US and QE is not appropriate as we have the world's reserve currency so the dynamic is different.  non-US economies tend to be much more fragile and prone to disruptions so the risk is high.  in fact, deflation may be starting to rear it's ugly head once again in a new cycle of downturns to come.  buying a falling knife could hurt.

And so will stocks in emerging markets. The extra Euro will flow into other markets, cause their prices to go up, and crash once there is a hint of QE being withdrawn.

If the ECB does QE then EU stocks will go up like US stocks did in their QE phase.
Going leveraged long on EU indices is a much safer bet than gambling on bitcoin price appreciation due to ECB QE.

I only have it in Greek, sorry. But you already got a link.

The Euro relative to the Dollar is at it's lowest rate in quite a while because the ECB only hinted at QE ....

Thanks