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At the recent NATO summit in The Hague, member states signed off on a new agreement to raise their defense spending to 5% of GDP. That is not a typo. Five percent. Every country. Across the board.
On paper, this might look like a strong move to bolster collective defense. In reality, it is a green light for more borrowing, more deficits, and eventually, more money printing.
Good to know
Hungarian Prime Minister Viktor Orban wasted no time following the announcement, immediately calling for the loosening of European Union budget rules. Translation: Let us run bigger deficits and borrow more freely. No one should be surprised. When have you ever seen a European government shrink its bureaucracy or cut back public spending to free up cash? Exactly. It never happens.
So where will the money come from? You already know. The money printer is warming up. The only thing missing is the sound: brrr.
Behind the patriotic speeches and defense strategy language lies a simple economic reality. No major EU member has the fiscal space to hit 5% defense spending without stretching its budget well beyond current EU caps. And instead of downsizing, governments will always choose to borrow and inflate. That is the path of least resistance, politically and economically.
Ironically, there is one clever play here — and it comes from Donald Trump. The push to lock NATO members into this 5% figure has a clear side benefit for the United States. Most of these countries will end up buying U.S.-made weapons, hardware, and tech. That means American factories, American jobs, and American exports. Trump’s “America First” approach, once mocked by many of these same European leaders, is suddenly working out quite well, and these same European leaders are now its biggest beneficiaries. Who would have believed that six months ago.
Bitcoin loves inflation. Or more precisely, people turn to Bitcoin when they want to escape it.
The more central banks flood the system with money to cover exploding deficits, the more investors and savers look for assets that are not tied to government promises. Bitcoin does not care who wins elections or signs treaties. It follows one rule: fixed supply.
And as governments across Europe prepare to push their fiscal engines into overdrive, Bitcoin becomes more attractive as a long-term store of value. The 5% NATO commitment is not just a military move — it is an economic signal. It says inflation is not going away anytime soon.
So yes, the defense budgets are going up. So are deficits. And so, eventually, will the price of Bitcoin.