Our monetary system is doomed and experts are all in agreement...?
I have been yesterday to a conference here in Switzerland with the headline Our Money, Our Banks, Our Country hosted by the GDI. Find the details here.
The list of speakers is stuffed with who is who around the monetary system from US, UK, Germany and Switzerland. Here an excerpt
- Uli Kortsch, Author, Economist and Expert on Monetary Policy
- Martin Wolf, Chief Economic Commentator, Financial Times
- William White, former Chief Economist, Bank for International Settlements, Basel, Switzerland,
- Larry Kotlikoff, Professor of Economics, Boston University, former Snr. Economist, President’s Council of Economic Advisers, USA
- Joseph Huber, Chair of Economic and Environmental Sociology, Martin Luther University, Germany
- William Dunkelberg, Chief Economist, National Federation of Independent Business, former Chair, Economics Dept., Temple University, Philadelphia, USA.
That attracted me. I wanted to listen what the expert have to says how the future of the monetary system can look like and how humanity should deal with the debt level which is increasing rapidly.
If something cannot go on forever, it will stop.
― Herbert Stein, What I Think: Essays on Economics, Politics, and Life
Can our current debt based monetary system go on forever?
The quote as obvious as it seems - it makes a very clear point: "it" will stop.
My opinion is for about 20 years - "no, the monetary system can't go on forever" but I excepted this is something worth debating about and experts will have different opinions on it.
But here I got totally surprised: on that conference everybody - I really mean everybody - was in total agreement that this system is going to "stop" sooner or later. Sooner than later I probably have to add. It was quite strange to hear that - so many experts and no one was even slightly in favor of the current system. And it seems for years.
That stroke me like a lightning. The whole governments and financial experts are all aware that the monetary system is doomed.
But aren't they those who should be able to take influence and change it?
That leads to the question: To what end should the system be changed? And here everybody had a different idea. There was intense debates about how a perfect system should look like an absolutely no chance to find a common ground. It shows the topic is so complex that you cannot determine a perfect solution and therefore you always have a lot of opponents pointing to the weaknesses of that system and stopping a possible change.
It is not clear how a future monetary system should look like.
If we found a new systems we want to strive for - how do we get there?
That was even more amazing - with the working assumption we just pick one of the presented solutions for a monetary system - how could a transition towards that system look like?
That question none of the experts was able to really answers. At least not in a way that would be feasible. William White spoke than out what probably all other didn't want to say.
There are basically only two ways for the transition possible: Hyperinflation or debt cuts
My conclusion
So for me that means: The leaders of the world are aware that the current system is doomed and needs to either be changed or it will just stop by itself (crash). There is no clear common picture on where we need to go (at least not yet) and probably there won't be a feasible way to get there. Hyperinflation (your wealth buy power gets significantly reduced) which probably leads to the introduction of new money like "world currency" or so. Debt restructuring leads to social problems, would need to globally coordinated and would make a few win a lot.
And if you put that into context that the divergence between rich and poor gets bigger and bigger (see also picture below showing that a lot of people earning less than 2005) this gets a very toxic cocktail.
So the outlook is grim and in my opinion we won't find a solution in time. This made me even in this "bloodbath" more bullish on cryptocurrencies on the long term and makes me think about crisis scenarios...
They actually are the ones that can influence the change but greed, I believe, won't let them.
This morning, I overheard over the radio where a senator in my country said he needs 2 come back for 2nd tenure 'cos the office is not befitting for youths
So I believe they only think of self instead of the masses.
That's why am always glad I found steemit when I did. Thanks @famunger for sharing this interesting experience
I guess you are right - a lot of it has to do with "protection of status quo and own wealth". And that won't change - that is what worries me and let me think that there won't be a solution and things will just "stop" eventually.
I think the developing of populations in rich and poor countries is a big problem alone. While the rich countries stay quite stable, populations in many poor countries explode!
There will be no easy way to solve this - Cryptocurrency may help people in poor countries - But I don't think anyone has a clue of how to solve this.
On the one hand, nobody wants to give away too much power and/or money. On the other hand, you can't just watch it and wait till the total disaster is there (however that would look like).
Really tough future ahead of us.
I agree - will be tough time and I am more and more convinced that the probability is high that we see a collapse. I start thinking that it makes sense to take money in my hands to prepare for that.
One thing I already knew but brought to point on the conference: bitcoin and most of the cryptocurrencies are no final solution. Why that? Because if there is no elastic amount of supply (bitcoins total supply is limited as we all know) that leads by mathematic to high volatility of price (and interest). And that does not make sense for a day to day currency. I still believe that blockchain / crypto makes sense from a technology point of view - also getting decentralized will lead to more trust and sustainable decisions but the problem on how does the ideal money system look like needs still to be solved either on blockchain or in fiat. And I don't see any currency yet which comes from the monetary economic point of view (maybe I missed something though).
Well, a SBD pegged to 1$ could be used as „regular money“ - the transaction speed + zero fees would be great as well.
I know, it‘s a long way and I don‘t think SBd will replace $ or any other big currency. But it sure could be a stable, real-money-alike, currency people could use on a daily basis!
It would solve the monetary system problem as the USD is debt based. So SBD is just inherit all of those problems. Is the total supply floating? I am not sure but if so it would solve some problems yes.
BTW reading your post I get the impression you think SBD is pegged to 1USD which it isn't as we also saw the last weeks. There are quite good articles around e.g. from @knircky to explain that - just in case - but you wrote "could" so you might be aware of that anyway.
There are always being mire SBD created, so there would not be no future limitation problems as wit BTC f.e.!
SBD should be pegged to 1$ according to the whitepaper - the mechanisms just are not working fine. But there is an ongoing discussion on implememting mechanisms (mainly starting an option for reverse conversion steem - sbd)!
There is a good post by @reggeamuffin about it - I will drop the link when I am back home ;)
Thanks for letting me know - I am aware of that discussion. Just meant current state. But sure - drop the link. Always worth reading something about steemit and its mechanics!
This is the standpoint from witness @reggaemuffin and others who are in favor of a better pegged 1$ SBD; https://steemit.com/witness-category/@reggaemuffin/witness-discussion-sbd-price-and-reverse-peg
@aggroed and some others are against that.
What is your opinion?
That is wild the theme was it cannot last forever, basically we are getting to the point where even people in these positions of power are seeing this won't work forever. The mental shift is the biggest proponent for change.
Two things we can do to fix the problem:
1: Reset the button.
2: Create a world without any form of money and debt.
I don't want to offend you in any way but to be honest I don't see that those options will bring good. But maybe I don't understand it enough so let me ask some questions.
1: How do you ensure that this doesn't happen again (or do you mean that are step 1 and 2 of one solution?).
2: Everybody will loose everything - how do you convince the majority of people to follow you on that idea?
3: An world without money - how can complex items be build and the effort rewarded? E.g. how do you get a car?
1: It is you erase the national debt of every country, remove central banks, fractional reserve. Maybe implement a monetary system like Bitcoin.
2: It is only material and everything is not permanent in this world, money, objects and so on, change the paradigm mindset of the people.
3: Change the root of thinking of the society and people, a society with everything accessible without inequality. An example could be Start Trek with the advanced technology of replication or mass production by robots entities.
excellant post..... in cryptocurrency realky helpfull
i really like this Quate
If something cannot go on forever, it will stop.
― Herbert Stein,
just Awsome @famunger
That's why banks and multi billionaire have create an artificial bear market to acquire all your holdings of cryptocurrency. If you bite that bait then you lost everything. Just hodl and smile. Maybe month from now your driving a new Lambo.
They actually are the ones that can influence the change but greed, I believe, won't let them.
This morning, I overheard over the radio where a senator in my country said he needs 2 come back for 2nd tenure 'cos the office is not befitting for youths
So I believe they only think of self instead of the masses.
That's why am always glad I found steemit when I did. Thanks @famunger for sharing this interesting experience
How nice post .... thanks for your informative post ..............!
e2f75-saturnalia-antoine2bfrancois2bcallet-1783-sm.jpg
Wellcome all honourable people..
Just followed you sir @famunger. Your post is so informative. I really like to learn about these stuffs. I'm just a newbie here in this community so I need to gather some info. about these stuffs because its so important. Well done sir.