Economic Collapse: Will Cryptocurrency Save The Financial System?
Content adapted from this Zerohedge.com article : Source
by Tyler Durden
Authored by Federico Pieraccini via The Strategic Culture Foundation,
In the second article of my three part series, I addressed how we got to the current state of this financial chaos. In this last article, I explain where we are heading and how cryptocurrency could be the last chance to create a sustainable economic system.
Where to go from here?
If trust and sustainability were the two conditions that allowed for the transition from physical gold to paper currency, it is from this basis that we must start to analyze where we are going and what effects the next economic crisis could have.
In 2008, confidence in central banks saved the global economy. But as Mario Draghi said, the bazooka of quantitative easing was fired and a second hit during a crisis would have proved ineffective.
The reason is complex and must be clearly explained. Most people are paid in a currency deposited in the bank, because that is where one keeps one's currency, able to withdraw it at any time. But in the event of an economic crisis, priority is given to the banks, whatever remaining liquidity being for the customers. The reason why there was no bank run in 2008, which would have led to the collapse of the global banking system, lies in the trust that ordinary people continued to place in the financial system, courtesy of what the corporate-controlled media told them. The problem concerns the next financial crisis and how the world population will react. The path already seems to be traced, especially in geopolitical terms. Countries like China and Russia have created their own alternative banking and financial system to escape dollar sanctions; but they have also begun to de-dollarize by accumulating gold and using different payment methods to the US currency. In the same way, the desire to escape from a centrally controlled financial system, and the attendant need to remain anonymous, has produced a technological evolution known as cryptocurrency, much as the need to quickly communicate and globally exchange data in real time produced the Internet. Both evolutions find common roots in the American security services. The Internet stems from a DARPA project, and blockchain was outlined in NSA documents back in 1996.
It is easy to imagine that governments and central banks have been caught flat footed by the birth of the cryptocurrencies, but it would be better not to underestimate nations that have been ruling the world for decades and have their finger on the pulse. Although Washington's aggressive foreign policy has accelerated de-dollarization, one must consider the reason why cryptocurrencies have not been declared illegal.
Let us go back for a moment to the devastating effects of the loss of the gold standard. Looking at a chart, it is easy to see how **the start of world debt coincided with the end of the dollar being linked to gold. **This has led to an increase in inflation, calmed only by false economic data and a powerful financial manipulation by central banks in collusion with each other. Purchasing power has plummeted and the average person has as a result become impoverished.
When the ordinary person is overwhelmed by debts and sees his purchasing power steadily declining over the years, while continuously being told by the media that the exact opposite is happening, dissatisfaction and frustration increases to a point of passing a tipping point.
In the US in 2008, the burden of the bailout fell on the shoulders of ordinary citizens. Once bitten, twice shy.
People are placing less and less trust in the media and the banks.
From Gold to Money to Crypto.
In this sense, we can perhaps understand why bitcoin and blockchain technology have been able to prosper in complete freedom. It is conceivable that the project reflects an evolving world in which paper money disappears in favor of the digital one. How this transition could take place, and why some nations devoted to de-dollarization will find themselves in a privileged position compared to economies entirely tied to the dollar is a matter open to debate. The possible economic-shift must be considered real and probable for the sustainability of many nations, accompanied by the inevitable technological change and the need to anchor the global economy back to real values. The natural passage is a return to physical gold or to virtual gold, precisely the block chain and the value we bring with it.
We should not underestimate the power of central banks and their plans to invent their own cryptocurrency as a mean to perpetuate their Ponzi scheme.
What will make the main difference in the future is what backs up these virtual currencies.
For example, Russia and China have accumulated many tons of gold and diversified their assets, dumping USD in exchange for tangible goods. A Crypto-Yuan or Ruble will eventually be valued more than an empty crypto-dollar without any counter-value. In a not to long distant future, Yuan and Ruble will be backed with gold or other financial assets like bitcoin while new virtual currencies will continue to perpetuate their empty value as with fiat currency. No surprise that with the next financial crisis, fiat money will pour into gold and crypto market looking for a safe haven from the devaluing dollar.
In the next couple of years we can expect central banks such as those of the US, Europe and Japan develop their own crypto-currency and start pushing conversion from fiat money into their crypto, advancing their project of keeping the system centralized. We should not exclude drastic measures, such as banning non-state-actor cryptos, from governments when central banks start realizing having lost their competitive edge on currency manipulation.
The last straw will be related to US military power trying to enforce the use of USD. In a scenario of steady economic and military decline of power, the US will find itself unable to force certain countries to use their currency, therefore losing its main weapon to create chaos in the world to advance its geopolitical goals. Without the dollar as the main world reserve currency, Washington will be forced to reconcile with the rest of the world, understanding that the unipolar moment is over and the neoliberal hegemonic planes to rule the world are forever gone.
It doesn't matter at the moment, because people are used to having money backed by nothing. Come the galloping inflation, people may prefer money backed by something. Right now, there is no pressure to move away from fiat, but unbacked cryptocurrency might struggle, if there is a gold-backed version available for use, once the Zimbabwe effect begins to make a difference.I know which one I would prefer: what would you like? Money backed by gold, or money backed by......nuffink?..Nothing against your AG, but try to go shopping with it, or leave the country in a SHTF situation.Speaking of a "SHTF Life"... even though it's true that "Possession is nine 10ths of the Law" in good times. But in bad times, it's ten tenths. And the guys having "Possession" are the ones with the most firepower: large, organized groups. Not a situation I'd want to get my family into (with delusional dreams of Frontier life in the 21st century), but to each his own.Nothing against your AG, but try to go shopping with it, or leave the country in a SHTF situation.Speaking of a "SHTF Life"... even though it's true that "Possession is nine 10ths of the Law" in good times. But in bad times, it's ten tenths. And the guys having "Possession" are the ones with Nothing against your AG, but try to go shopping with it, or leave the country in a SHTF situation.Speaking of a "SHTF Life"... even though it's true that "Possession is nine 10ths of Cryptos are here to stay. Its just something we are gonna have to deal with. Its still early on so it will be interesting to see how the space will change over the years. Lots of dumb money pouring into it, ignorant investors, scam projects, grey area regulation, but it will sort itself out over time. Its been an exciting space to watch! Thank you for sharing with us...
Cryptocurrencies arent going to save the financial system, it is going to replace it.
The present system is nothing but a house of cards built in sand on a windy day. It is mirage that is going to fall.
As the article noted, there is nothing holding together the USD (and other fiat) other than the trust people put in it. Since more are waking p to the truth, the Central Banksters are losing control.
And it is absurd to think they will create a cryptocurrency. They might create a digital currency but it will not be on an open decentralized blockchain they cannot control.
So it will be more of the same with these characters. Call it a different name but it is still fiat. There is no way I see a Central Bank creating anything that restricts its ability to maneuver it how they want. This goes against their core existence.
Interesting post @zer0hedge. I agree that cryptocurrencies could be the new form currencies that could help the financial system.
In order for this to happen, it would take a very regulated cryotocurrency that is both stable and has a very good team behind it - but you are right, mediums for exchanging goods have always changed to become more efficient, which is what cryptocurrencies do. A government backed cryptocurrency (if backed by the right government) may not shoot up in price like others, but it would provide a sense of legitimacy to the market as a whole, which is important for the growth of cryptocurrencies.
Thanks again for sharing!
Cryptocurrency indeed is rescuing the future of the economy. Just like banks did in 2008 as you've stated it. The growth in the number of people that trusted banks at the time is the same reason why cryptocurrencies are going to be the new trend in the future. People are dodging being controlled by the government system which uses banks to control them.
Russia and China are setting the pace, and more developed countries are soon jumping in as they develop their own cryptos.
Cryptocurrancies CAN become the money of the future if they are maintained correctly, without the interference of governments that want to control them and decide who gets what and when.
The economy is in the pan because of a select few deciding what is going to happen and if the same becomes true for crypto we will be no better off.
Something needs to change but until the system is up and running and hack proof and power cut proof and a thousand other thing proof people will stick to the devil they know because that is what they are conditioned to do
yes yes i think this crypto the news economy and this technique solve many probleme this is my opinion
Thank you! very much. my dear @zer0hedge for sharing with us. have a nice day.
Encrypted digital currency is the only solution
In September 2008, the global financial crisis, which was considered the worst of its kind since the Great Depression in 1929, started the crisis first in the United States of America and then spread to the countries of the world to include the European countries and Asian countries and the Gulf countries and developing countries that are directly linked to the economy of the United States, the number of banks that collapsed In the United States during the year 2008 to 19 banks, and also predicted more of the new avalanches among the US banks of 8,400 banks.
It had stages since its outbreak
August 2007: Non-payment of mortgage loans (granted to debtors with insufficient repayment capacity) has intensified in the United States and caused the first bankruptcy in specialized banking institutions. August 2007: Stock markets are deteriorating against the risk of crisis expansion, and central banks intervene to support the liquidity market. October 2007 to December 2007: Several major banks announce a significant drop in their share prices due to the subprime crisis. January 2008: The US Federal Reserve cuts its key interest rate by three quarters to 3.50%, an exceptional measure. And then gradually reduced to 2% between January and the end of April. February 17, 2008: The British government nationalizes the bank "Northern Rock" March 2008: Central banks join forces to deal with the market again. March 2008: JPMorgan Chase announces September 7, 2008: The US Treasury Department puts Freddie Mac and Fannie Mae into two trusteeships throughout the period they need to restructure their finances. , With the guarantee of their debts up to the limit of $ 200 billion. September 15, 2008: The Lehman Brothers business bank is looming as one of the leading US banks, Bank of America, is buying another bank on the Wall Street, Merrill Lynch. Ten international banks agree to set up a $ 70 billion liquidity fund to meet their most pressing needs. Urgent, while central banks agree to open areas of credit. The US Federal Reserve and the US government are actually faking the world's largest insurer, AIG, which is threatened with bankruptcy by giving it $ 85 billion in aid for 9.79 percent of its capital. September 17, 2008 , 2008: World markets continue to deteriorate and credit weaken in the financial system. Central banks are stepping up operations to provide liquidity to financial institutions. September 18, 2008: British bank Lloyds TSB buys rival HBS, which is threatened with bankruptcy. US authorities announce it is preparing a plan worth 700 billion dollars to rid banks of their assets can not September 19, 2008: US President George W. Bush calls for "immediate action" on a bailout plan to avoid a worsening crisis in the United States. 23 September 2008: The financial crisis overshadows the discussions at the UN General Assembly in New York. Stalling on the plan September 26, 2008: The share price of Belgian-Dutch banking group Fortis collapsed on the stock market due to doubts about its ability to meet its obligations. In the United States, JPMorgan buys its rival Washington Mutual with the help of the federal authorities. September 28, 2008: The US bailout is agreed in Congress. In Europe, Fortis is being floated by the authorities of Belgium, the Netherlands and Luxembourg. In Britain, Bank Bradford and Bingley were nationalized. September 29, 2008: US House of Representatives rejects rescue plan. The Wall Street stock market collapsed a few hours after the European bourses fell sharply, while interest rates among banks continued to rise preventing banks from refinancing themselves. Citigroup announced that it is buying rival Wachovia Bank with the help of federal authorities. : US Senate approves revised financial rescue plan
The future is a digital currency This is very excellent Thank you for the valuable participation I liked this very much grateful to you. @zer0hedge
After a crisis in 2008 there was a financial rescue plan for me in America
The financial bailout plan is the plan drafted by US Treasury Secretary Henry Paulson to save the US financial system after the subprime mortgage crisis that surfaced in 2007. The fallout from the subprime crisis continued until 2008. The subprime crisis has affected the US banking and financial markets, threatening the collapse of the US economy and the global economy.
The plan aims to ensure better protection of real estate savings and property, which belongs to taxpayers; it aims to protect property, promote economic growth and maximize investment returns.
The plan, which came to address the most serious property crisis in the United States since the Great Depression, was designed to help borrowers who have difficulty paying their premiums by raising the ceiling on mortgages they can afford for a public guarantee.
US President George W. Bush initially opposed the bailout plan, which he saw as saving borrowers and irresponsible lenders, but then retreated from the threat of veto against the plan after US Treasury Secretary Henry Paulson said support for the two companies, Fannie Mae Freddie Mac) is necessary to calm domestic and foreign markets.
The Senate approved the text of the rescue plan by 72 votes to 13 against the House approval.
But no matter what they do, they will never find a solution other than adopting the Qin Block technology
And encrypted digital currencies. @zer0hedge
The plan is to buy the crippling debt that is disrupting the US financial market and threatening to collapse, mostly due to the wrong mortgage policy adopted by financial speculators on Wall Street. The law, passed by the US Senate, provides a deadline for this plan to expire on December 31, 2009, with the possibility of extending it at the request of the government for a maximum period of two years from the date of approval of the plan.
The rescue plan also included a special aspect of Fannie Mae and Freddie Mac, the biggest foreclosure and bankruptcy finance firm, close to collapse in early August. The two affected companies own and support a $ 5 trillion mortgage equivalent to about 50 percent of US mortgages.
Under the plan, the FHA will increase the ceiling on loans purchased by the two companies to $ 625,000
Bitcoin is more than a bubble, it is a Psy Op to herd the gullible sheeple to their electronic meadow for the final fleecing and the end of freedom as we know it. "Greed is god", to paraphrase Gordon Lizard in the Wall St sewer and Potemkin Village (idiot) USSAN "economy" of war and fraud by the Zero 1% and nobody knows that better than a Rothschild wolf shepherding his flock of fools to their electronic doom and their inevitable slaughter. Buy more Blipcoin$ by all means! The banksters love it. First the Blip and then the chip! They see this as their last real chance (apart from blowing up the planet) to hold onto their "exorbitant privilege" and free lunch; the evil Saudi Mercan IOU Pentacon Protection Racket petroscrip fiat filth, euphemistically known as the USSAN dollah.
Is everybody in, the show is about to begin.
Contrary to the usual hubris and arrogance of Western banksters and so-called €conomist$ the future of money is being decided by those countries that actually have physical reserves and resources and the military power to control them. For Russia and China "reserves and resources" does not mean the unpayable debt that so-called Western capitalists imagine "wealth" to be as they continue to impoverish their hostage nations with their anti capitalist cant that has turned the so called Western "democracies" into impoverished welfare ruins over run by Soros' migrant hordes to distract the masses from the real enemy among them. One gets it or one doesn't as the case may be but the Anglozionazi centric world is already a thing of the past.
That future does not include a "global reserve currency" style Fedcon slash Blipcoin owned by the money changers and globally imposed as the Pentacon Kissinger Saudi Mercan IOU petroscrip toilet paper dollah was, whatever about being imposed on USSAN and Europeon debt slaves only too happy to exist in their cashless, electronic gulags "all watched over by machines of loving grace" as they jab their electro thingies In lieu of using a brain to "purchase" their Latte dumbass I'm a moron five buck starschmucks zio piss "coffee". In a world of NSA slash CIA hacking gone mad, run as these criminal enterprises are by murderous thugs and sociopaths, how the hell can an unknown App like Blipcoin suddenly be "wealth" and how in God's name can gold be purged from human DNA after 3000 years functioning as real money simply because the shamanic Satanic banksters in the West and the Pedophile Politburo in Natostan ghetto Brussels no longer have any and the brain dead Millennials with their prosthetic blinking plastic gizmo brains, never managed to grasp what in fact real money is? The simple answer is that actual physical money such as gold can't be purged and replaced with fiat or blips or BS and try as the globo mob might it won't get purged and in the end when the electricity inevitably goes out the surviving Millennials will wake up and go belly up when their "survival" Apps no longer bring home the bacon.
Shlomo Satoshi say big tank from refuge of his Bitcon Temple. May the Blip be with you, o smartphoner!
What can go wrong....will!