Cryptocurrency: Just What The Economy Needs

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The Central Banks around the world, especially the United States Federal Reserve, is backed into a corner. They are operating on a very slippery slope, hoping to threat a needles which they found in a haystack. That is the likelihood of them pulling this maneuver off.

Some time ago, the Fed passed the Rubicon where they entered into a liquidity trap. This is not recent, it happened more than 2 decades ago. The printing of money, mild in comparison to today, created economic turmoil of great proportions. In short, the global economy saw the overall growth rate plummet while financialization went through the roof.

Since the Great Recession, Central Banks have been printing money in the wild hope that their Keynesian models would finally world. Decades of decreasing money velocity evidently told them nothing. Instead, they keep printing, praying that it will eventually stimulate the economy.


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In all actuality, what the Central Banks have been doing is keeping everything from collapsing. The low interest rate environment is essentially filling in for the absence of true growth. This is a major issue since the world is now dependent upon that money.

The major problem comes in when the Fed loses "control". A couple years back the policy switched from easing to tightening. Interest rates were slowly moved up which the markets did not like. The Fed quickly reversed this course of action, realizing that it was going to collapse things within a year.

Fast forward to 2021 and we see things are no better. The economy was smashed due to the lockdowns from COVID-19. Nevertheless, the markets are still riding high, pushing many to call this the "Bubble of Everything".

We are already seeing interest rates creep up. This will be catastrophic if it continues. One of the reasons the Fed kept interest rates at historic lows is because of the servicing of debt. With so much paper out there, the costs are feasible with low interest rates. However, if money starts to cost more, that will really affect things like real estate.

The challenge starts when defaults begin. With so many zombie companies out there (those who servicing of debt obligations exceed their net income), the markets become vulnerable if they cannot keep rolling said debt over. When that stops, defaults take off, causing investors to want more money when lending since they are taking on additional risk.

This is the situation the Central Banks find themselves in. Of course, they are aided (coerced) by politicians who are about as bright as a dead lightbulb. These individuals, when they aren't playing politics, simply seek to buy votes. Everything is about their next election.

Throughout this entire process, the wealth and income inequality numbers went through the roof. Even the last year, the top tier excelled while the rest of the world suffered. Couple this with the explosion in technology, read automation, and we can see how this scenario only gets worse.

In short, the Central Banks or governments will not get out of this mess. The lack of willingness to "cleanse" the system through bankruptcy and default means the pain, which inevitably comes, will be that much worse.

Enter cryptocurrency.


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When you have an economic and financial system that is so sick, there is really no cure from within. Believe it or not, the major challenge becomes having enough money to help the economy grow. In spite of the money printing, from the USD perspective, there is a shortage.

How can this be with trillions printed?

There are a number of reasons for this:

To start, not all the money gets into the economy. Much of what the Fed does goes through the banking system. The only way it gets into the economy is through lending. When things suck, banks are not willing to lend without assurances. Thus, during those times when Congress passes a spending bill, the money is distributed since the banks are not on the hook. However, when it is the banks money on the line, suddenly lending standards increase.

On an individual level, with economic uncertainty, many people change their behavior. Right now, the stimulus that is sent out basically replaces wages. Thus, the economic impact is not great. We are seeing basic necessities holding up yet other areas are dying. People tend to save more as things get iffy.

The final piece is the percentage of the pie that is allocated to debt servicing. With such massive debt loads at the government, corporate, and individual levels, the cost to keep the payments up, even at record low interest rates, is growing. That means less money for productive purposes.

Here is where cryptocurrency is the elixir that the economy needs.

Like Central Banks, the ability to print money exists. In fact, that is now in the hands of every individual with an Internet connection. This provides the potential to provide the liquidity that is needed for growth.

However, unlike the existing system, the distribution can occur in a manner that helps the ailing economy. Instead of new tokens going into the hands of banks, it is put into individual wallets. This increases the incomes and, hopefully, the wealth, of average individuals. Here we see where money actually gets into the economy as opposed to a large percentage of it either being held back or going to debt.

At the same time, investing can take a different path. Cryptocurrency does not have the debt obligations that the traditional system does. Hence, those involved have the potential to allocate the resources to more productive means. There is no funding of zombie projects. In crypto, the Network Effect is always in action. If a project is in a zombie state, it simply dies out. Attention is one of the key currencies in this realm.


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Crypto has the elasticity, overall, that is required to grow economies. However, it is not just endless money creation. Each token has a distribution schedule that is coded in. This, for the most part, is not changed. Here we see the ability to have confidence in a currency based upon that.

However, as was stated, more can be created in an instant. Another currency can show up immediate with a few clicks of a mouse. This provides the ability to expand when needed.

Of course, that does not mean the market (environment) will be able to digest it. If too many tokens are created without a use case (value), then they will die. Sure they exist but they are basically nothing. With nobody using them, it is as if they are not there.

The industry is still in its infancy, especially when it comes to DeFi. Nevertheless, this funding mechanism is what will allow for the salvation of the global economy. While the Central Banks and governments play their games, doing whatever they can to try and keep things afloat, financial power is shifting. An economy based upon activity and the Network Effect is being constructed.

Cryptocurrency has the ability to provide a 15%-20% annual growth rate in the global economy. This is something that the present system cannot even envision. Heck, the United States, in spite of its reserve currency status and technological might cannot even sustain 3%.

Why is such an elevated level possible with cryptocurrency? Simply put, when you look at the totality of the system we have the ability to create whatever money is required and back it through activity. If we pull enough people into the mix, the value of the currencies will be there. Also, this all takes place without gatekeepers or rent seekers. Those entities tend not to add value, only extract it. Too much of the present economy is locked up by institutions that take money without adding any value.

The holistic nature of economies is what is providing the opportunity described in this article. With so much disruption taking place, we are seeing a major shift. The present economy was unprepared for it even before it got sick. Now, it is completely out to lunch.

Cryptocurrency will enable us to transition to a place where more of our economy is based upon the virtual. It will leave behind those zombie industries, since funding of them will not take place. After all, would anyone buy a Sears token? Of course not.

This shift is what will kickstart the economy. In totality, crypto has the answer that the world is seeking. It all adds up.


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Bang, I did it again... I just rehived your post!
Week 46 of my contest just started...you can now check the winners of the previous week!
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I agree with this statement:

If too many tokens are created without a use case (value), then they will die. Sure they exist but they are basically nothing. With nobody using them, it is as if they are not there.

Token will lose much of its value when we can't used it for real-valued services and product. The success of crypto lies in how will the masses adapts it.

Cryptocurrency has the ability to provide a 15%-20% annual growth rate in the global economy.

I hope people realize what it can bring to economy in general. I know some people is afraid of what they don't know. If they just give cryptocurrency and blockchain a chance to understand, they will surely love it. Sometimes, cryptocurrencies are promoted as quick-to-rich scheme. And, some scammers try to milk people by promoting a pyramiding scheme (especially in developing country, nut not all).

Cryptocurrency will enable us to transition to a place where more of our economy is based upon the virtual.

As the global workplace became virtual, cryptocurrencies may have a good chance of adaptation, but I don't see it sooner. I look forward to the time crypto became mainstream.

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Cryptocurrency will enable us to transition to a place where more of our economy is based upon the virtual

This is just the highlight of it all, I mean take a look at all the crumbling economies of so many states limited by the power of fiat currency and it's exploitative tendencies.

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The icing on the cake for me will be when crypto users can seamlessly transact back and forth from one currency to another including back and forth into fiats without one having to do much conversions on the frontend. It is interesting that we are already getting there with atomic swaps and all...

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Probably going to see that, sans fiat, in the next year. The challenge with crypto is that is the realm of governments.

What will likely happen is people will be able to operate mostly in crypto. That is the game changer.

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Like Central Banks, the ability to print money exists. In fact, that is now in the hands of every individual with an Internet connection. This provides the potential to provide the liquidity that is needed for growth.

This says it all...

This is why we all need to embrace cryptocurrencies right now.....thanks for this wonderful information sir @taskmaster4450

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In totality, crypto has the answer that the world is seeking.

Well, at the end, you still have to abide by the regulation. India is planning to ban crypto - many are disappointed - but barely can do anything. For cryptos to go main stream, the elected governments would need to adopt and regulate it. That will also reduce the volatility.

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For cryptos to go main stream, the elected governments would need to adopt and regulate it.

Crypto is build outside the government system. The government's reach is becoming less as we enter a more decentralized digital world. That is nothing India can do about what is taking place in crypto.

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That is nothing India can do about what is taking place in crypto.

It cannot stop the cryptos but its stopping us by banning - which is unfortunate.

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Central banks are controlled by two big banks IMF and Wolrdbank. They control not only financial system but also politic. Under the red flag of developing countries, IMF and Wolrdbank offer loans that is impossible to be paid back. Finally, those countries depends on Dollars, on the other hand Dollars continue to be printed so the value of money in developing countries will always be controlled by US dollar

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The Fed doesnt really answer to either of them. In the US, we could care less about the IMF or World Bank. That said, it could be changing as the US starts to succumb to Europe.

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This is really some scary stuff. I think a lot of us have seen stuff like this coming, but to see it all spelled out in your words like that is very heavy. I think the relief for me is that I have been involved with crypto for 3 years so even though I don't have huge bags, I have enough that I should be in a fairly good position when things really start to take off.

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It is not going to be a pretty situation. The taxation that comes out of this along with the sovereign debt crisis will echo around the world. Many who put their faith in what is taking place will find they end up screwed.

Most government promises will end up being broken, sending many reeling.

You are right, this is some scary stuff.

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At the same time, investing can take a different path. Cryptocurrency does not have the debt obligations that the traditional system does. Hence, those involved have the potential to allocate the resources to more productive means. There is no funding of zombie projects

What a very valid points you have made...cryptocurrency is the future....@taskmaster4450

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the debt system has now gone beyond all scenarios - As you well said, sooner or later everything will collapse and cryptocurrencies will be the element that will lead to the birth of a new economy, clearer and less corrupt

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"If too many tokens are created without a use case (value), then they will die " dogecoin holders are laughing at that statement all the way to the bank :P or is dogecoin useful at something other than being a meme?

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DOGE has the network effect so that is there the value come from.

is dogecoin useful at something other than being a meme?

This sums it up. There is the use case, nothing more is needed.

Value is whatever people decide it is, not what you or I think it should be. If people are buying the token, which they are, they believe it has value.

In the end, it might collapse but if it is of interest, it will keep going.

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It's the backing by debt that is the most troubling aspect of fiat. Backing by network effect is much better.

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Well said.

For each dollar printed, that must be paid back PLUS interest.

It is why defaults, ie someone has to lose, is guaranteed. It is built into the system. All the money borrowed cannot be paid back since 100% of the money is owed plus said interest.

There is no way to pay 1.03% of the total money outstanding back.

There simply is not enough money.

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What makes it even worse is that it gets compounded and leveraged multiple times while being packaged and repackaged and finally involving everyone and their dog in an epic mess created by a few of the largest entities.

And this shit happens regularly!

This is one those things that must have attracted people to communism or fascism. There are no debt cycles in a command economy.

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The current situation cannot keep carrying on as at some point it has to collapse. Crypto is generating fortunes for those that got in early and some of the profits will make their way into the economy at some time adding stimulus. The more I hear and the more I see the more excited I see how crypto is going to play a massive pat.

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Because this is such an awesome post, here is a BBH Tip for you. . Keep up the fantastic work

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I think what it ultimately comes down to is belief. Whether or not crypto or fiat, if people believe in it then it can be used to maintain the economy. If one side ever loses, then it is the end. Many crypto coins have died due to having no use cases or people just gave up. With a strong group of people believing and transacting, the currency no matter where it is crypto or fiat will flourish.

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Cryptocurrencies are all the financial market needs, but it just doesn't know it yet... Haha!

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I suppose you already envisioned a soon enough future where companies from the real economy will start using defi instead of cefi, if for no other reason, because that's what will keep them afloat.

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