RE: 7 Ways Higher Interest Rates Will Reshape The World Economy
Excellent article. Thank you very much for that!
I agree with almost all your points except one. Interest rates will never rise again. Many people still believe in cyclical economic cycles but I don't. I don't think that because interest rates where high at some point they will be again.
I think that there is no way Governments can fix this unless:
- There is debt forgiveness between all nations and we start over. No one owes nothing to anyone. I consider this to be very unlikely.
- There is a word war III. I consider this more likely unfortunately.
- They keep printing money, increase the debt limits indefinitely so the nations do not go to physical war.
The end of capitalism is near and we need to find a new economic model. I like the bitshares economic model, where every value has to be locked in x3 of collateral value and this is monitored at any time by everyone on the blockchain. Something easy as that may solve a lot of the speculative problems of capitalism and yet banks and governments still choose to ignore it. Banks are talking about proof of concept and how they will use blockchain and yet they miss the most important point...Decentralization of power is everything. Not many people trust banks anymore and they won't trust them because they decide to use "blockchain" technology...
Ouufff...I think I am getting of subject so I will just stop here.
@mf-tzo - Agree, agree, agree! 100% we need a new eocnomic model. What do you think aboud Communism - Marx' model?)
Please see my reply to @mf-tzo. I'd like to hear your thoughts. Cheers
I doubt that communism is the solution. There is no reason to try again something that failed. We need innovation not going back. I think that communism ideologically maybe good but doesn't apply in real life without completely change people's education all over the world, their mentality, their perception of money, values and what is really important in this life.
I hope that capitalism doesn't end. I do hope though that the new form will be a decentralized and much more transparent form of capitalism. Blockchain technology can deliver this. I think it is a matter of time before this happens and I think it will inevitably happen sooner or later once people all over the world say ENOUGH IS ENOUGH and demand from corporations more transparency.
Thanks @mf-tzo for your thoughtful comment.
I agree we need a new economic model, but I believe higher interest rates are inevitable, not because we will continue in the cyclical central bank driven old model, but because the free market will demand it. Interest rates represent the cost of money, or debt, which I believe will always exist, even under the best system.
Ideally, the free market will determine the cost of money (interest rates), based on supply, demand, and risk. If central banks took their hands off today, interest rates would spike because there would no longer be new money creation. The supply of money would fall, and risk would no longer be absorbed by monetary policy expectations.
In my next post, I'll write about four economic shifts that I believe will send interest rates higher. I do agree with you that an economic reset is inevitable, but I believe the outcome of that will be higher interest rates.
I hope the end of capitalism is not near. While I agree wholeheartedly we need a decentralised form of capitalism, and that the blockchain will deliver that, in my mind, capitalism is the natural outworking of a free market. If there is not capitalism, then I'm afriad we'll be living in a very centralised world, one where civil liberties are few.
Thoughts? Perhaps I'm missing something. I'm here to learn.
I also hope that capitalism doesn't end. I do hope though that the new form will be a decentralized and much more transparent form of capitalism. Blockchain technology can deliver this. I think it is a matter of time before this happens and I think it will inevitably happen sooner or later once people all over the world say ENOUGH IS ENOUGH and demand from corporations more transparency.