The Current Economic Period is a Reminder WHY Crypto is here
It's January 2009 and the economic crisis is in full swing first emerging in 2008 due to bubble loans being sold for housing and mortgagee's are starting to crumble under the financial pressures and many housing loans collapse. Amongst it launches Bitcoin to usher in a new decentralised financial system outside of the banking sector and out of the reach of central banks.
At first it takes a bit of time getting traction but it doesn't take the first Crypto Currency to build momentum and breach it's first USD price point. by 2016 the token is trading over USD 1000 turning many into instant millionaires and providing an insight on what can be achieved through the collaboration of people, the internet and the emergence of Blockchain technology.
While Bitcoin isn't deflationary it is estimated that 20% of all Bitcoins have been lost due to user error or more so people losing their wallet keys. Most notable human errors is the incident which involved a Bitcoin investor throwing out what was tipped to be 550 Million in Bitcoin when cleaning out his office which has never been recovered. No doubt many would have been searching the tip for that hard drive.
Financial Crisis
The 2008 financial crisis may be long gone but the reminder of why a new economic system was created is truer today just as it was back than. Given the current economic market where reserve banks across the world continue to raise interest rates in an attempt to reduce inflation brought on by massive government stimulus packages. There are many whom have missed out on receiving the stimulus and now have to wear the full brunt of repaying someone else's debt.
The biggest losers around the world are 30 - 50 year olds with families and a mortgage, many of which will be soon ending their low interest rate loans and if they were unlucky to have built or borrowed within the last 5 years will be the biggest debt repayers.
The current state of the economy is now worse than the 1970s recession which saw wide spread house losses and an increase in bankruptcy claims many of which were young families who didn't recover.
Many reserve banks whilst currently retaining this months pause on raising interest rates are acknowledging that there may indeed be more raises to come as inflation doesn't appear to be declining.
Banks Out Of Touch
The current drive of increasing interest rates and why it isn't working is a no brainer and it's one that proves why we need an alternative to the current economic system. Banks are relying on mum's and dads and average workers to pay back money they don't have.
The brunt of wealth is held by baby boomers, many of which have retires and have no overheads or loans to repay so a constant increase in interest rates aren't hitting their desired target. This isn't a big secret either and it is something that is well known.
The RBA recently conceded that there is no inflation and it is companies increasing prices and they can do so because they are fully aware that Baby Boomers are loaded and are the wealthiest cohort of humans to have ever walked the planet.
No to mention Government's across the globe made this cohort even more wealthier by printing out more money to give them which has now caused younger generations to wear the full brunt of the debt. This is why inflation isn't declining and continues to rise.
The Case for Decentralised Finance
This complete disregard of the current issues faced by the average person by the banks is a firm reminder of the importance for a new financial system, one that can not be tampered with by governments and that can be managed equally.
The banks are no longer competent to manage our economic environment and continue to provide further financial stress and pressure on the people that are not the root cause of the problem while another cohort of people continue to be unphased by the increase of interest rates.
In a recent development the forecast for a short period of high interest rates is now being replaced with a narrative of higher for longer and what was once tipped to see the commencement of a reduction by the end of 2023 is not being tipped to continue all the way through til 2026.
The banks war against inflation is targeting the wrong people and now with over a year of experience they still haven't been able to pivot to the right direction and failing many.
This is as firm reminder of why Decentralised Finance (De-Fi)
was born as the banks and governments can not be trusted to manage our finances.
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