Bitcoin and gold will not protect against geopolitical turmoil, according to Yiannis Varoufakis, former Greek Finance Minister and General Secretary of MeRA25. “Finding freedom outside government is a dangerous fantasy,” he said.
Varoufakis is also a Doctor of Economics and a bestselling author. Talk to David Lane, presenter and producer at Kitco News.
CBDC and Blockchain
“I don’t think… the ‘oligarchy’ by definition of cryptocurrencies like Bitcoin will ever replace it. [conventional currency]Varoufakis said. “It shouldn’t, it can’t, and it would be a nightmare if it happened.”
However, he added that blockchain technology will be beneficial for central banks.
“China’s central bank is already rolling out a crypto-like digital currency in an effort to overcome the hurdles that commercial banks impose on fiat money, which is a source of financial instability, and those that really create a buffer zone, separating people from their money,” Varoufakis said.
Varoufakis has long advocated a European Central Bank (CBDC) digital currency.
tyranny of government
Responding to fears that central bank digital currencies are increasing government authoritarianism, Varoufakis said, “This is a serious concern. Concentration of power is never a favorable moment for freedom. So, I accept it, but at the same time reject it because there can be no apolitical money.” …the only thing that gives value to money is money’s ability to extinguish taxes.So as much as we live in nations that do things for us, in our name, and sometimes against us, but nevertheless, we are like fish that can’t live out of water.We are citizens of nations. …we need those states.I mean, look at all the libertarian attempts to create floating islands in the Pacific.
He added that the solution to the tyranny of the government is democracy and transparency. “Those who say that government can be dictatorial and limit freedom, I say yes to them,” Varoufakis noted. That’s why we need democracy. This is why, for example, I am in favor of using blockchain technology, in the context of central bank digital currencies, to provide a certain degree of transparency so that we all know how much money is in the system.
Or bitcoin and inflation
Regarding the claim that gold and bitcoin are a hedge against government unrest, Varoufakis replied:[It’s] Just plain crap… you have to control the money supply. The idea that the money supply should be independent of politics and government… is a very dangerous one.
He needs to make it clear that in times of crisis, the central bank must provide funds to avoid a depression.
Varoufakis responded to claims that loose monetary policy could curb inflation. “Financial illiteracy,” he said. “…the cause of our inflation now is not because of quantitative easing. That is for two reasons. First, because of the disruption of supply chains. In which the increase in the demand for goods … with the restriction of the supply of these things due to the disruption of supply chains, and this imposes an inflationary spiral.
To find out how Varoufakis believes central banks can fight inflation and how the Russia-Ukrainian conflict should be resolved, watch the video above.
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