The rise of Bitcoin and other cryptocurrencies are considered often as a result of lack of confidence in fiat money system, especially after the “Great Recession of 2008-2009”, also called “Financial Crisis”. Was this crisis really so bad and unique, that it should trigger a complete transformation of the financial system?
Great Depression (Photo: Wikimedia Commons)
The Great Recession is a term that represents the sharp decline in economic activity during the late 2000s, which is considered the most significant downturn since the Great Depression. The term “Great Recession” applies to both the U.S. recession, officially lasting from December 2007 to June 2009, and the ensuing global recession in 2009. Investopedia
Almost back to normal
I don’t think we inevitably need a financial revolution, or it was urgent. Economies are now growing globally, not very fast, but it can be considered tolerable and sustainable. Back to normal (see chart). Unemployment is on a many-years-low level. In Germany or United Kingdom, unemployment rate was decades ago at the same low level (about 1990). Despite of the heavy immigration from East Europe and the huge refugees wave.
There are many signs we are not completely out of the crisis, but we aren’t deep inside any more, either. Big companies are making big money, politicians are talking bullshit like always. One frightening phenomena is the extension of populist, extremist ideas and voters. But now, still are reigning moderate, reasonable, centrist forces in the most important countries. (Angela Merkel just did it again, making an agreement yesterday.)
Which depression is greater?
Crisis is no extraordinary incident or occurrence in the capitalism – it is almost normal. Do you remember Great Depression? Yes, that one from 1929, as people was begging for food for their families or for job on the streets. It was much deeper than this last one. (And, may be, it caused World War II.)
The Great Depression was the greatest and longest economic recession in modern world history. It began with the U.S. stock market crash of 1929 and did not completely end until 1946 after World War II.
Investopedia
But, you know what? There is an other Great Depression, it began with the Panic of 1873:
That triggered a depression in Europe and North America that lasted from 1873 until 1879, and even longer in some countries (…) The Long Depression was a worldwide price and economic recession, beginning in 1873 and running either through the spring of 1879, or 1896, depending on the metrics used. (…) The episode was labelled the "Great Depression" at the time, and it held that designation until the Great Depression of the 1930s. Wikipedia
2000 years old banking crisis
Great Depressions, Long Depressions, Great Recession… so many? No. Much-much more. Wikipedia has a long list of greater economic depressions. And it begins… in the year 33 A. D. Funny, isn’t it?
The Financial Panic of AD 33. The result of the mass issuance of unsecured loans by main Roman banking houses
It couldn’t be the fault of fiat currency. In 33 A. D., people was using gold, silver and bronze coins. So, now, tell me, are we really in a new era? This time, all, all, all will be different?
Revolution, evolution
Smaller recessions are appearing approximately every 5-8 years in the history of capitalism. (Last time, 2011-2012, see chart.) So, why we would need revolution in the financial system?
Great Depression (Photo: Wikimedia Commons)
May be not a revolution, but evolution. Banking hasn’t had a really great transformation like other industries with computers, internet and digitalization, or it is changing but slowly. (Send money with bank transfer abroad in 3 days? In the era of the high sped internet, when e-mails, chats are practically real time? Are we in the Stone Ages, please?)
Wolves out there
But there are also frightening signs, wolves surrounding our houses and waiting to attack. The immense debt that caused the whatsoever named crisis of 2008-2009 (or 2008-2029?), is larger now than 11 years ago. Population in developed countries is ageing very quickly, pension and retirement systems are nearing to the collapse.
The extremists, populists and the discontented, dissatisfied people following them have their reasons, mostly the surge in inequality, the increasing number of hopeless citizens. Earnings and wealth of a part of the classic middle class, former fabric workers, for example, are stagnating or decreasing, since decades. The globalization (the workforce of developed countries) and robotization are pushing salaries low. That’s because many people are shouting loud.
Worldpeace
My opinion: We need all possible ways to improve productivity. We need more well-being, social welfare, and fight fake news, disinformation of dictators and hybrid war. Only so we can maintain peace on Earth.
Blockchain and cryptocurrencies can improve productivity and economy, can reform politics, fight corruption and fake news. In my opinion, that is why we need them in first place.
Disclaimer:
I am not a financial advisor and this content in this article is not a financial or investment advice. It is for informative purposes only, or simply to make you think, entertain, increase testosterone and adrenaline level. Consult your advisers before making any decision.
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