BitcoinEconomy

"Spend as Much as You Can" Says IMF After ECB Chief Slams Bitcoin

Bitcoin proponents are already in awe at the size of the United States' latest $1.9 trillion coronavirus stimulus bill, but for the International Monetary Fund (IMF), it is not enough.

Speaking at the twelfth Russian Gaidar economic forum on January 15th, IMF managing director Kristalina Georgieva told world governments to ramp up spending even more, despite last year's ongoing record money printing. 

IMF Tells Governments: Spend, Spend, Spend

“In terms of policies for right now, very unusual for the IMF, starting in March I would go out and I would say: ‘please spend,'" she said, quoted by Reuters. 

"Spend as much as you can and then spend a little bit more.”

Georgieva was commenting on the broader status quo impacting the global economy at the start of 2021, as the majority of countries continue to grapple with increasing cases of COVID-19. Economic responses, notably national lockdowns and business restrictions, also continue, these having already led to central banks massively intervening in state finances and markets.

Bitcoiners have looked on as fiat currencies throughout the world see increasingly unrestricted issuance, with the U.S. in particular financing its monetary expansion with trillions of dollars of debt. 

Far from voicing concern about the long-term effects of such money supply inflation, however, the IMF advocates the practice as the solution to, not the cause of, financial predicaments.

"I continue to advocate for monetary policy accommodation and fiscal policies that protect the economy from collapse at a time when we are on purpose restricting both production and consumption,” Georgieva added.

U.S. Federal Reserve balance sheet as of Jan. 11, 2021. Source: St. Louis Fed

IMF, ECB Fail to Improve Bitcoin Track Record

The IMF has already come in for indirect scrutiny this week after former managing director Christine Lagarde, now president of the European Central Bank (ECB), claimed that Bitcoin was being used for money laundering and needed regulation.

“(Bitcoin) is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity,” she said in an interview at the Reuters Next conference.

While notionally open to regulatory clarity surrounding Bitcoin, users noted the irony behind the statements, Lagarde herself having been convicted of—but not punished for—facilitating illicit payments while at the IMF in 2011.

One response from Keiser Report host Max Keiser additionally focused on the ECB's scorn of Bitcoin while another government, Pakistan, had chosen to begin mining Bitcoin using state funds.

"Embarassing for (Lagarde). Please do some reading," macro investor Dan Tapeiro added, suggesting that the ECB president consult two popular books on Bitcoin.

"...$1T asset class, Em usage, banking unbanked, new tech, security network, genius invention, value protocol etc etc... C'mon."

As a decentralized hard asset with an immutable fixed supply, Bitcoin does not just boast deflationary issuance but incentivizes network participants to support it ad infinitum. Bitcoin's inflation rate is currently 1.8% following its most recent block subsidy halving event in May 2020. 

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Sean has worked in the cryptocurrency space since 2014, witnessing Bitcoin grow from a niche to a mainstream phenomenon. He has written everything from Bitcoin price analyses to how-to guides for new adopters.