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Quote from: Abiky on April 17, 2024, 06:10:11 PM

With central banks struggling to keep inflation under control, people are beginning to lose trust in the traditional financial system. Some politicians (eg: Javier Milei) even suggested to abolish central banks as they're the main cause of the world's economic problems.

If the global economy continues to deteriorate, do you think central banks will collapse? If that happens, it will be the end of Fiat for good. In such a scenario, do you think Bitcoin will become the currency of the world?

What's your opinion? Your input would be greatly appreciated. Thanks.

Under what circumstances might the central bank of a particular country collapse? Too high inflation and rising prices? This happens periodically around the world, but their central banks usually stand because they are part and integral to the state. Humanity has not yet come up with a better model for the functioning of society, such as unification into states, and banks have invariably existed since the invention of current forms of money. In order for central banks to collapse, it is necessary for the current system of cash and non-cash money to become a thing of the past, and even then, this is only in theory, because humanity does not yet have such experience, and what may come to replace fiat is quite possible will again be able to be regulated by the changed central banks. After all, the issue and maintenance of what will replace the current fiat will still need to be carried out, which means something like central banks is necessary. Therefore, I do not yet see that central banks will ever collapse as a financial institution of states.

What if this whole central bank crisis is about us people, evolving, not about the economy tanking? Imagine if we all simply wake up one day and said, "Screw this crazy money-obsessed rat race. Lets concentrate on actual business: supporting one another, living sustainably, not killing the earth." Those stifling central banks could suddenly be as outdated as a dial-up modem. We might begin trading chickens for haircuts or local currencies supported by, say, community gardens or anything else. Though its an odd idea, weirder events have happened. Maybe the future isnt about getting rich, its about getting... human.

I do not see that the global system can develop at this pace because despite all the technological progress, it still depends on the principles of profit and loss, which are laws that govern the market and achieve a balance of “supply and demand.” The banking system is the most important tool for achieving this, but it is not the only tool because there is an arsenal of laws and legislation that control economic policies in a globalized world.

I do not agree very much with the optimism about the near end of the global financial system, considering the fall of the banks, because there are actually no alternatives in the medium or long term. All the change projects that are currently being worked on are about changing tools, not changing policies. For example, those who want to get rid of the dominance of the dollar propose alternatives to it and not a complete strategy to get rid of the entire monetary system.