'Now I am become the ECB, destroyer of wealth'

How long 'til we own nothing?

About three years ago, I wrote a column for an online news outlet about the Dutch untenable debt position and the dire consequences for the country’s wealth in the long run. Three years later, things do not look any better. Not just for us Dutchies, mind you, but for every EU-citizen who has gathered some wealth. Let me illustrate my point with the following graph:

What we see here is the European Central Bank (ECB) buying itself out of every crisis. It started with the financial crisis in 2007 and proceeds through the eurocrisis and COVID pandemic in 2020/21. Basically, the ECB ‘saved’ the euro, banks ‘too big to fail’ and countries like Greece, Italy and Spain by buying up bad government debts and obscure financial instruments, flooding the Eurozone with billions of printed money in return. Currently, the ECB debt is a little lower, but still amounts to a staggering € 8.000 billion. And that is on top of our national government debts.

In my book Coddled Children*, to be published in a couple of months, one of the main characters ‘Rupert’ (Roel) states the following:

“Under the guise of diversity, equity and inclusion, people, I should actually say women and their subservient males, attained positions they’d never reached on their own. Knowledge, experience and common sense were thrown overboard and facts replaced by what they felt was right and true. Victims were hoisted on a pedestal. No one was allowed to have any more setbacks, which meant the money printer went berserk. From a prosperous nation we descended to a country riddled with debt. From a free land, we sank into repression and fear. Every day, we were smothered in guilt: we were racist, we were xenophobic, we had white privilege and we’d accumulated our fortune at the expense of the environment and on the backs of less fortunate ones. And now we had to pay the price! So they raised our taxes, stripped our pensions, and printed so much money that anything of value evaporated before our eyes. Our prosperity was slipping through our fingers and we just let it happen. They took and took, but it never was enough.”

Now Rupert here is widely considered a country pastor who longs for the stone age. A rural, racist, xenophobic, anti-democratic and conspiring blabber that is threatening the peaceful progressive society of the Free Nations.

But is he wrong?

If you look closely at the graph above, you can see that a tiny amount of the debt is covered by gold reserves and foreign currencies. The rest (>90%) is just bad debt spend on buying out overcredited governments and non-solvent banks. There is no reason to believe this debt will ever be repaid; that’s why the ECB bought it in the first place. There is also no collateral securing this bad debt, except for some guarantees of the individual EU-countries. But who’s going to pay the bill when the ECB can no longer meet its obligations?

As you can see, almost half of the EU-countries already have more government debt to their GDP than the 60% threshold they agreed upon in 2002. But that’s just part of the story. What is left out are our household debts. If we include our home mortgages in the graph above, we gain a better understanding of how over credited we really are.

So what happened? The ECB bought up enormous amounts of bad debt from banks and governments and paid for it with freshly printed money. As a result, governments and banks, released of their previous bad investments, started borrowing more money against insanely low (even negative) interest rates and supplying it to us in the form of increased government spending, mortgages and private debts. Scarcity on the housing market, especially in the Netherlands, combined with a flood of almost free money, resulted in surging housing prices and household debt. In the last decade, house prices in the Netherlands increased with 91%, making housing in the Netherlands unaffordable for most of its inhabitants, unless you are capable and willing to immerse yourself completely in debt.

But if the ECB has printed so much money for such a long time, why was the inflation rate below 2% until Russia invaded Ukraine? That’s because the printed money had largely been used for home mortgages, increasing our house prices. Housing however - although it is our largest commodity - is only marginally included in the inflation rate, as a result of which inflation rates have been grossly understated for years

Nonetheless, inflation rates already started to rise in 2021 when the ECB’s unlimited supply of bogus money was transferred to businesses to ‘guide’ us through the COVID pandemic. But only when Russia invaded Ukraine, they were able to implement some much needed corrections while pretending the high inflation rates could all be blamed on Russia

In 2022, EU-citizens lost, on average, ten percent of their wealth. In that year, not only did the EU have the highest inflation worldwide, but its citizens also suffered much higher inflation than non-EU inhabitants, like Norway (5,8%) and Switzerland (2,8%), showing you can’t blame the Russians for everything.

So how do we proceed from here? There are basically two options. One, the ECB stops printing money and increases the interest rate to curb the inflation. This will immediately lead to Southern EU-countries unable to fulfill their debt obligations, forcing other EU-countries to step in. But as we have seen before, most EU-countries don’t want to bail out their ‘overspending neighbors’. Furthermore, while we still had the means to help each other out in 2012, we no longer have that option today. All that free money has soared our private debt positions, resulting in a real possibility that house owners can no longer pay their mortgages when interest rates rise and we will get our own housing crisis. Of course, when that happens the government will almost certainly jump in to ‘save us’ and subsequently increase their taxes for doing so, spreading a new poverty across the nation.

The second option is that the ECB will continu printing money and our Euro’s will become less valuable every day. Interest rates will remain low, but our economies will become much more volatile (you just have to look to Latin America to know what I mean). In return, the government will increase taxes anyway to compensate for its own overspending. Moreover, our wealth will be inflated a little every day until one day a Euro is worth about as much as the Venezuelan Bolivar or Vietnamese Dong. It should come as no surprise that both these countries are deeply socialist.

If you don’t want to become a victim to your government’s debt or to your own, there’s basically just one alternative left:

*Coddled Children is the English translation of the Dutch political fiction novel Curlingkinderen, published on May 22nd, 2024. For Dutch readers, check out the Dutch Substack for more information: