Undone: A Financial World Unravelling

While decentralized currency poses new opportunities it also poses new challenges. In the wake of the 2008 World Financial Crisis, everyone was looking for alternative in a World where fake money had been so badly inflated it swallowed whole institutions like Lehmans.

Speculation on fiat currency and financial instruments had become a fast numbers game. Financial instruments like home and student loans were bundled and sold to unwitting foreign investors by credit agencies like Moodys and S&P who gave them a dubious stamp of approval. Many lost everything under these bad loans and bad faith contracts. The introduction of crypto currency was a the hope of an answer to not only the fractal banking system but also the wealth gap that had begun to leave big businesses marooned without adequate clientele.

Even with quantitative easing during the Obama administration the bounce-back did not last. Howevrr, tgst makes sense, if one is playing economic attention. It becomes obvious that downturns and economic recessions are coming quicker and quicker like the contractions of a woman in labor. But these contractions are not only felt in the USA. They are felt around the world by nations who are banking on the West and US dollars as the World reserve currency.

Currently there is a fear among those in economic academia and practice in the West that the Chinese Yuan might become the most relied upon reserve currency. The Internal Monetary Fund lists the US dollar, Euro and the Chinese Yuan as the top world reserve currencies. The EUs fight for relevance is not merely political or territorial, but financial.

It’s true, the Chinese Yuan is increasingly becoming the attractive option among nations who could care less about hegemonic squabbles and more about keeping their nations economically sound. Even the British Pound has fallen below the Japanese Yen as a World reserve currency according to IMF data.

However, the need for an Economic overhaul is perhaps never more evident than in the “lower classes” decimated by a flagging economy and a persistent worldwide pandemic. The financial gap may be what is killing the West even more quickly than some of its policies. As its own citizens are unable to keep the economic wheel turning–people without security or financial flows a will not buy. This means that some–a lot of the world’s most powerful multinationals will shutter.

Will crypto currency solve the gulf? Perhaps, but not as a fiat backed commodity. The commoditization of crypto has turned it into just another financial instrument unable to produce real value. The real fear as it pertains to decentralized currency, is that those who have horded the fiat get to keep all of it; and the majority will pivot to a new currency leaving traditional fiat and it’s borders to a slow decline.

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