- Schäffler sees Bitcoin as a way out of an over-indebted state and monetary system.
- Bitcoin can make people more independent of the state and secure assets in the long term.
The FDP politician and author Frank Schäffler sees Bitcoin as the answer to a deeper problem: what he sees as an over-indebted state and monetary system that is placing increasing strain on future generations. In one Interview With Blocktrainer on March 17, Schäffler explicitly linked the debate about national debt, the pension system and the monetary order to Bitcoin and described it as a way out of a structural imbalance.
Schäffler’s main argument is the state’s growing debt burden, which, in his opinion, is falling on younger generations. Schäffler says that the “debt generation” must “pay for everything that the boomers have piled up in terms of burdens, in terms of government debt, indirect debt through the social systems, especially through the pension system.”
Why Bitcoin is the solution
The FDP politician refers to calculations by the Market Economy Foundation, which put the direct and indirect debt in Germany at more than 19.5 trillion euros. This corresponds to a debt of 450 percent of economic output.
For him, this situation is not just the result of wrong political decisions, but rather an expression of a deeper design flaw. “The mother of the problems is the monetary system,” says Schäffler.
“We live in a monetary monopoly in which state currencies serve to keep the world’s debt going. This always tempts politicians to take the easier route, namely the route into debt.”
This has far-reaching consequences for the market economy, wealth creation and individual freedom because the state is increasingly taking on the role of redistributor and crisis manager.
Bitcoin is the alternative. Schäffler expressly describes it as a way to become more independent of government decisions, especially financially: With reference to his new book, he explains that if he had only invested 26 euros every month since his first Bitcoin investment in 2013, it would have resulted in a significant holdings.
“You have to do it for a long time, you have to start early, you have to do it continuously and you have to invest it in profitable investments. Either in stocks or, if you want, in Bitcoin. Then you end up with huge sums and can become independent of everything we just discussed – from the state and from what politicians decide at some point.”
Schäffler sees the volatility of Bitcoin as an advantage and not a disadvantage. For critics, it is the reason not to view Bitcoin as a serious precaution. Schäffler turns the argument around.
“Volatility is a good thing in the long term. If you invest the same amount every month, sometimes you buy more shares and sometimes you buy fewer shares. And that leads to this long-term cost averaging effect. If the price increases in the long term, you benefit from that.”
It is noteworthy that Schäffler does not limit Bitcoin to the role of a private savings vehicle. He also talks about its monetary function. Referring to Friedrich August von Hayek, he describes Bitcoin as private money and draws a line to gold.
“Bitcoin is private money. In my view, it is comparable to digital gold as a means of storing value. But that too Lightning Network allows payments in smaller or larger forms, including across borders. I’m not the one saying Bitcoin is only good for storing value. I think there’s more to it.”
His thesis on the role of central banks goes even further. Schäffler thinks it is realistic that Central banks will indirectly build up Bitcoin reserves. His reasoning is strategic and points to possible upheavals in the monetary system:
“I think Bitcoin is something like the last anchor for a central bank. If there is a system change, then such a change is easier if you have gold or Bitcoin in your reserves than if you don’t.”
This is exactly why, says Schäffler, it is plausible that the discussion will at some point move away from smaller states or Sovereign wealth fund expand to larger institutions. His distrust of the existing system goes even further. Schäffler refers to historical interventions in the gold market and does not rule out the possibility that covert influence could at least be attempted in Bitcoin.
“The power of central banks should not be underestimated when it comes to questions like this. Who tells us that they haven’t already invested directly or indirectly in Bitcoin in order to influence the price – to put it cautiously? I don’t think that’s unlikely.”
Nevertheless: Instead of waiting for political reforms, people should start saving regularly as early as possible and become less dependent on government decisions. His tip is: “Don’t mope around, but do three things: start early, invest regularly and, if possible, in Bitcoin.”
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