8 Ways to avert Financial Crisis
4 traditional ways to avert or mitigate economic crashes, government excessive debt and stock market melt downs.
And 3 not so traditional ways to alleviate economic woes.
And one rare but likely guaranteed solution.
There have been 4 main ways governments have steered their economies away from or out of economic peril traditionally. Also known as a Deleveraging.
1) Cut Spending (Austerity) / Debt Reduction
Austerity has however proven very painful and very unpopular with voters. Especially in Greece, placing mounting pressure on the survivability of the EURO.
And Debt reduction, recently, has proven near enough impossible.
2) Raise taxes especially for the rich
and distribute to the most needed via relief programs and mass government infrastructure development employment programs.
This however, drives the rich and corporations out, and tenses them, in a most determined way to find ways to get around the taxes.
It also stifles development and investment by wealthy individuals and corporations.
3) Bailouts
Bailouts of significant proportion accompanied Quantitative Easing after the 2008 Crisis. It involved Banks (who had not recovered from the last round of Bailouts 10 years prior – in the 1998 Crisis) again, Bailing out the troubled Banks of 2008, along with a spate of Bailouts by a number Governments. They essentially gave large amounts of money to struggling, mainly financial entities to stop them failing.
The problem is, this can only really be done once or twice and those times have already been used up and the debt of which – to the government and the tax payers, is still there.
4) Got to War
This may not be palatable for most people, but many would say that the 1930s depression ended when, and only when, WWII began.
3 not so traditional and not so appealing or acknowledged or tried and tested remedies
2) Print Money (Quantitative Easing or QE)
Liquidate a seized up global money system by printing absurd amounts for money, such as happened in the 2008 Financial Crisis to speed up money supply and money velocity again.
The system involves Central Banks buying Bonds issued by the government to enable Government to spend, and by Central Banks* buying financial Assets such as other types of Bonds and Shares of large corporations. And this is what we are seeing now in the US.
One outcome is that Banks essentially have more money to lend out and put into the system – whether they actually do this and where they actually lend it out to, then comes into question.
It could also be said, in very simple terms, to be like a shopkeeper buying his own stock – somewhat counter productive.
It has also proven to be ineffective in its use by the Japanese Central Bankprior to the 2008 Financial Crisis and is largely unquantifiable in so far as its effect when used in a simpler form, toward the end of the 1920s depression.
So, with Quantitative Easing we are really in the midst of the** biggest financial experiment** in history. And if History tells us anything, it is that most experiments don’t work.
However, if we have time and try enough – this might work, eventually – Might!
2) NIRP
Negative Interest Rate Policy or NIRP – this is when Central Banks and other private Banks charge depositors like financial institutions, Pension Funds, Businesses and Individuals like you and I, to keep money in the bank or institution.
Ordinarily, you would receive some interest on your deposit – the interest rate would be positive.
With NIRP you will be charged for keeping your money in the bank or institution – instead for receiving interest for your savings or money, you have to pay to store it.
This policy is what I call a The Alamo stance after the siege of the Alamo in 1836 – it’s a last minute resort that is unlikely to have a positive outcome.
But, it’s intention is to penalize depositors to force them to spend money and kick start a seized up money system again.
It however exacerbates social mobility decline and wipes out the savings ability of the average person, whether they want to save for retirement, education, their children or for a better life or home.
3) Bail-ins
Bail-ins are essentially the opposite of Bailouts – instead of someone else coming to the rescue of an institution, bank or business, those within the institution forfeit or prop up the entity or institution.
So if you have money in a bank or pension fund that money will be seized to help the bank or pension fund survive.
Directors of the entity may also have to input money and creditors may loose what they have lent to the entity as well.
It is not a great situation and can really hurt the average depositor / person.
The problem with all of the above is that they do not provide long term sure fire solutions or cures
All the fallout also rests on the shoulders of government, this can lead to political instability and populism, as well as more economic instability, and the orchestrator is always visible, namely the Government.
But, what if there was no clear target for those who 'loose out' to loath and retaliate against?
What if, there was something to uplift billions of people financially and quality of life wise, enabling them to spend more on leisure, more on education, more on charity and more on self awareness and have fewer children as happens in wealthier societies and countries.
A new age where it was not all that necessary to have full time work in a world where robots did most of the work and almost everyone was a master of his or her environment.
Where wealth came to the masses not by some indebted government program, not by taking the wealth of the rich blatantly and not by pillaging from other countries but by many sophisticated 'new age' 'interest bearing' business models run by clever mathematical algorithms and not fallible people, that anyone could be a part of.
A new age, where the machine serves all of mankind, making our impact on earth efficiently minimal with a slowly peaceful natural reducing population facilitating a much better quality of life for all or at least most.
There is another Rare and un talked about solution –
A Wealth Shift and a ’grand maximum’ Wealth Shift at that!
Government need no apply
Government! You cannot be involved – its for your own good
A Wealth Shift not from the rich per say but from a financial ’Zero Point Energy’ or financial ’Ground State Energy’ if you like.
Enter: ...Bitcoin and the Cryptocurrency revolution.
There are a great many problems facing our world today – more and more intense than at any time in history, even is you feel it is only because of perception - people are more aware than ever before.
The problems are massive! Whether actual or just perceived.
Lets look at some of the treats most talked about in recent decades – I say decades because if they have been talked about for decades, they must be rather significant.
Climate change
Water Shortage
Pollution
Biodiversity Depletion (Holocene Extinction)
Certain Areas Overpopulation
Global and Sovereign Debt
Household Debt
Financial Crisis Systemic Risk (Banks interconnectivity)
Poverty
War
Terrorism
Migration - Desperation Migration
Diseases resurgence, emergence and assurgence, particularly Viruses** & Mental Health
Populism
If we moved from what I call a Population turgid economic model to a Technology turgid economic model.
From an economic model that requires an ever increasing population to function (more debt, more toilet roll demand, more tax income, more children to support the retirees and more land for farming)
To an economic model using technology to support the elderly, farm more efficiently, an economic system that does not run on more and more debt like the one we use now, but is highly efficient in structure and function that allows safe, fair and non discriminatory commerce facilitation where no one can cheat because the system is autonomous – run on a and by a sophisticated machine algorithm like the Bitcoin Blockchain.
Unhackable, immutable, censorship resistant, fungible (mutually interchangeable) decentralized (no one entity having power over it in itself) finite supply (cannot be inflated to zero worth like fiat currency can)
Just like what money should be!
Then we will begin to reverse:
Climate change
Water Shortage
Pollution
Biodiversity Depletion (Holocene Extinction)
Certain Areas Overpopulation
Global and Sovereign Debt
Household Debt
Financial Crisis Systemic Risk (Banks interconnectivity)
Then, if we went a step further, as Bitcoin has proven to be able to do, and got the half of the worlds population ”BANKED”, as they are currently not properly banked or banked at all, people will then, at next to no cost, be able to:
-Save Easily
-Lend Easily
-Invest Easily
-Have Property Rights and proof of Ownership
-Financially support children and other family
The fundamentals affluent nations and people take for granted and the basis for the functional civilized free society.
We will then address, in short order:
Poverty
War
Terrorism
Migration - Desperation Migration
Diseases resurgence, emergence and assurgence, particularly Viruses & Mental Health
Populism
In a much better way than we do now.
Cryptocurrencies and Blockchain hold the answer to so many problems we face.
1850 to 1950 – age of the oilmen. )
(
Partial Wealth Shift > Age of the Global Bankers
(
1950 to 2030 – age of the computer man )
Mega Wealth Shift
2030 to 2150 – age of the machine ( the autonomous algorithm ) , golden age for early adopters of Cryptocurrency and, quite likely Modern Democracies Forth Wave.
And possibly, an Extinction Event for the Age of the Global Bankers.
Blockchain and its accompanying internal money ecosystem – cryptocurrency, along with AI will be the predominant ingredients of the age of machines.
And anyone investing in this ingredient, like those who invested in the oil men or those who invested in the computer men will become very rich.
Yours Visionerily
Ptychadina Wealth