Willem Middelkoop: We are entering a deep economic crisis

Due to the corona crisis, we will end up in a deep economic crisis. This will accelerate numerous developments, such as the possible introduction of a basic income and digital central bank money. That's what Willem Middelkoop says in a new episode of The Bitcoin Show. He expects that governments and central banks will use the coronavirus as a kind of stepping stone to implement numerous new measures. According to Middelkoop, this creates a form of state capitalism, in which individual freedoms come under pressure.

Since the financial crisis, the underlying economic problems have not been solved, but only postponed to the future. Income inequality and wealth inequality has only increased further. There is also a generation that has grown up that is increasingly struggling to find a job and buy a house. The corona crisis brings all these problems to the forefront. Central banks fear that these problems in households and businesses will spill over to the banking sector.

Central bank digital money

Middelkoop expects that central banks will therefore take on more tasks from commercial banks. An indication of this is the speed and scale with which central banks Central Bank Digital Currencies (CBDC). This is a form of digital money that central banks can put into circulation alongside cash and electronic bank balances. This form of digital money gives the authorities more options to determine who gets that money and under what conditions. This new form of digital money is also easier for governments and central banks to trace than cash.

Because of this crisis, people will flee to things that governments cannot print, such as precious metals and virtual currencies. He expects that paper assets such as government bonds will become worthless, because government debts will have to be restructured. He also foresees that the real estate market in the major cities will come under pressure due to the corona crisis. In many large cities, vacancy rates are already rising and prices are starting to fall in both the rental and owner-occupied sectors.

This contribution was made from Geotrendlines