Normally, something happening in a small country might not carry much weight. In the era of cryptocurrency, this is not necessarily the case.
Trust is a vital part of any economic system. We have industries that are built around providing that trust. When economies or, worse, markets have that trust broken, very bad things happen.
At present, the word from the mainstream is that everything is going fine. The global economy is slowing yet it is not in jeopardy of collapse. The central banks of the world are easing, a move, we are told, that will alleviate any major problems.
There are many who take exception to that viewpoint. We see their works posted all over the Internet. A few even appear on television to pass along the message that we are in a heap of trouble.
Nevertheless, our leaders and their cronies in the media keep banging the "all is well" drum.
Sadly, there are a few instances that are starting to shed some light. Without going into them all, there is one situation that is of concern and could foreshadow some things for the crypto world.
Lebanon is a country that is small on the world stage. With a population of roughly 6 million people, it has little influence over things globally.
That does not mean it cannot start something that carries to the rest of the world.
Presently, that country is facing an old fashioned run on its banks. People are showing up to the banks in droves; demanding their money. According to reports, some are even armed.
For the past two weeks, the banks were closed. This sparked mass protests as people wanted their money. We can only imagine the emotions associated with a country cut off from its money.
“This is our money!… We can’t get our money – you have money in the banks and you’re not giving it to the people! You’re stealing from us!”
Read more at 7bitcoins.com: https://7bitcoins.com/lebanese-banks-in-panic-mode-clients-with-guns-demanding-money-withdrawal/
Normally, a bank run in a country of this size means little. However, with the option of cryptocurrency, this could take on a different meaning.
Since trust is such a vital component to all economic and financial activity, we now have 6 million people who lost that trust in their banking system. Nothing can turn a group quicker than taking their money and not giving it back.
This brings up the question of who is next. Lebanon is not the only country with a banking system that is in shambles. In fact, the entire European banking system is on edge. Deutsche Bank, one of Germany's largest suffered huge losses in the last two quarters calling into question the ability of that institution to remain solvent.
The bigger question is what happens to Germany if Deutsche does go under? After that, we will be wondering what happens to Western Europe if Germany goes into the toilet?
These questions ought to make the world think. When things go bad, investors look for safe havens. With the global banking system showing signs of decay, will cryptocurrency be viewed as a much better alternative?
We know some populations embraced that notion. Citizens in both Venezuela and China embraced Bitcoin as a means of protecting their wealth against what was taking place in their countries. It would make sense that those in Iran would be doing the same.
Ultimately, the next major cryptocurrency run could come from the most unlikely of places: the banks themselves.
Lebanon is likely not to be the last country to experience something of this nature. Each time this happens, millions of more people are awakened to the perils of the present financial system.
How many will turn to cryptocurrency remains to be seen? Nevertheless, unlike in the past, people are being presented with a choice.
Time will tell how this one plays out.
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