The Coming Banking Crisis that will reshape the world
- Author Radu
- Published April 28, 2023
- Word count 1,243
A few years ago, 6 years ago to be more precise, Christine Lagarde, the IMF director, was predicting the demise of the current banking system and the triumph of cryptocurrency. Not was she only suggesting just that but she was also making some astonishing predictions like the end of fractional reserve banking, and national monies – which to me sounded like the loss of national central banks sovereignty.
“In the long run, the technology itself can replace national monies, conventional financial intermediation, and even “puts a question mark on the fractional banking model we know today.”
WOW. Was that a simple guess or more like a plan? I am saying “plan” because in my analysis here i am going to try to see if this “plan” has any basis in reality today, or what the IMF director said was pure speculation on her part at that time.
In a number of documents released by the IMF (and not only) in recent times, the same ideas have not only resurfaced but details of the architecture of the “new financial system” emerged. For example in a paper released on March 3rd of this year titled “Trust Bridges and Money Flows: A Digital Marketplace to Improve Cross-Border Payments” they make the case that the current banking system has become obsolete and can no longer serve the purposes of a modern financial system, that the current design and trust relationships that must exist between global financial institutions in order for the current system to work are inefficient, expensive, prone to financial shocks, and make up a highly centralized system. In contrast to highlighting the shortcomings of the current banking system, the paper comes to present the “benefits” of the new blockchain based system that comes to solve all these failings.
The question then comes to “have concrete steps to address these issues and move towards the adoption of a more efficient and transparent system been made”? Yes they have, but most likely you have heard nothing about them. In fact in recent years intense efforts have been directed towards implementing a new blockchain based SWIFT API standardized as ISO20022. After a string of postponements, the banking system had March 20 of this year of 2023 as a deadline to finish their backend integration with the new APIs. Not only banks, but other major institutions have already finished the transition. For example the DTCC have released “Project Ion” to production months ago.
One may ask “so what, how is this a big deal”? It may not sound like a big deal until you realise that the enhancements do not come to merely “enhance” the current banking system, although the banks are currently using this new technology, but to “replace” it. Maybe not just yet, but what is important to note is that banks as institutions are NOT NEEDED for the new system to operate. The Banks have indeed now become obsolete, and it’s not me saying it, it’s them saying it not once but multiple times. Here is the latest example:
“Banks can attach SWIFT Codes and bank accounts to a UMU digital currency wallet and transaction SWIFT-like cross-border payments over digital currency rails completely bypassing the correspondent banking system”.
What is new this time is this is the first time i hear them talk about the new world currency … the “Unicoin” – will come back to this later.
So, where are we at now? We are at the point when the current system is inefficient, prone to financial shocks and reliant on medieval institutions that are part of the problem – the banks. Get the idea? To complete the picture I am going to throw a few more parameters into the equation to help “clarify” what I believe comes next.
First we see the turmoil in financial markets coming back with a vengeance. After 2008 the banking system appeared to had been fixed until it started shaking again with the collapse of SVB and Credit Suisse. The talk of the day coming out of the mouths of many financial authorities is that we should expect more to come. This is all happening on the back of a system that has the US Dollar at the core in an inflationary environment.
Until recently, the dollar has had a relatively stable value with low inflation and served the role of a world reserve currency well. But with the coming of inflation, the world realised that the design will bring everyone down through “dollar inflation export”. This is how it works: if the FED has to raise rates because of inflation, all other Central Banks have to follow suit because if they don’t the inflation in their own economies (caused by the inflation in the reserve currency of the world that everyone uses to trade with each other) would be exacerbated by the devaluation (vs the USD) of their own respective currencies.
And just like that, voila – the system is broken again and this time it can’t be fixed. All of a sudden the talk in town is all about a new global financial crisis coming our way accompanied by what some economists say would be a “severe recession”. But Janet Yellen said in the past that “there won’t be another financial crisis in our life time”. I wonder if she still holds true to her words. Anyways.
So if we are to assume that the current banking and financial system is heading for collapse, who is then going to save the system this time and how? One thing is certain, money printing won’t cut it this time. What if, then, … they’ll say “just let it all fail”, the banks are not really needed any more? Do you think that is a possibility? And if that which should had been allowed to happen in 2008 now happens, what comes next then? What if the banks and the dollar system do indeed collapse?
According to reports, the UN is already seeking to be given “emergency powers” over handling of “future economic crises”. Quote:
“The United Nations is seeking vast new powers and stronger “global governance” tools to deal with international emergencies such as … economic crises”.
We have already seen how the UN has already sought to be granted authority to handle a global pandemic, overriding the authorities of member nations. Why would the UN seek authority to handle a global economic crisis? Hmmm … is this what Christine Lagarde was referring to when she said all those years ago that eventually cryptocurrency would “replace national monies”?
Well it turns out the UN has not been sitting idle all this time. In the case of a “local crisis” generated by the invasion of Ukraine, it just happens that they are already using this new technology to provide financial aid to the Ukrainian refugees …
What would then be the UN’s role in the case of a global economic crisis, caused by a dollar system collapse, which would make all of us “financial refugees”? Maybe just use the same financial rails they use today in Ukraine, replace the USDC with Unicoin and voila – world is saved! I just wonder, besides requiring every soul on Earth to have a digital ID to operate in the new system, what else will they ask for?
Been studying the world events for many years and I believe we are on the precipice of the biggest financial shakeup the world has ever seen.Article source: https://articlebiz.com
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