Share Street art, Caracas, Venezuela. Once the richest country in Latin AmericaVenezuela is now suffering from the highest inflation rate in the world and enduring an unprecedented humanitarian crisis — including extreme food shortagesincreasing violent crimeand a skyrocketing mortality rate due to limited access to basic healthcare. During this period of rising oil prices, the Venezuelan government devised an ambitious plan to redistribute its wealth, especially targeting those at the bottom of the socio-economic pyramid, through several social programmes known as Sistema Nacional de Misiones the Bolivarian Missions.
There are ample warning signs that another serious financial crisis is on the way. These warning signs are being soundly ignored by the majority, though. The crisis really spooked them.
Hence their massive money printing spree to "rescue" the system. Source This global flood of freshly-printed 'thin air' money has no parallel in the historical records. All around the world, each of us is part of a grand experiment being conducted without the benefits of either prior experience or controls.
Its outcome will be binary: If the former, then no worries. We'll just continue to borrow and spend in ever-greater amounts -- forever.
Perpetual prosperity for everyone! But if things hit a breaking point, then you had better be prepared for some truly bad times. Excessive money printing leads to the destruction of currency. Fiat money like the US dollar, the Euro, the Yen, and every other world currency is a social contract and has an associated set of related agreements.
When that contract and those agreements are broken by reckless expansion of the currency base, things fall apart fast. We need look no further than current-day Venezuela to understand that.
We expect that our cash will be able to buy us the real things we want when we want them. We trust that our stocks give us an ownership stake in a real company producing real things for real profits.
We rely on our bonds being re-paid in the future along with interest; but if not, we expect that our bond becomes a claim on valuable collateral. Ideally, the money supply and the amount of real wealth should exist in balance. As money is a claim on "stuff", as economic output i.
And vice-versa during periods of economic contraction. But what happens when the claims start to far outweigh the real "stuff"? That's when things get precarious.
Source The flood of money unleashed by QE didn't result in vast amounts of new actual wealth being created i. But it did result in grotesquely-inflated financial asset prices that have helped to create the most profound wealth and income inequality seen in our lifetime perhaps ever.
It reads like the rap sheet of a virulent psychopath: Even if that were the case and I dispute whether the world is really better off for having saved Citibank et al. But instead, the central banks ramped up their wanton ways in the years since the GFC.
Did you know that their largest-ever printing spree happened over the past two years? The bigger the printing spree the bigger the fundamental distortions.
In such a world, up becomes down, black becomes white, and right becomes wrong.Fiat money (like the US dollar, the Euro, the Yen, and every other world currency) is a social contract and has an associated set of related agreements.
When that contract and those agreements are broken by reckless expansion of the currency base, things fall apart fast.
The euro area is the world’s second largest monetary area. It cannot depend solely on the opinions of ratings agencies and markets. It needs economic governance . Oct 15, · Several new experiments in North America and Europe represent the first such experiments in the developed world since the s (when a negative income tax was tested in several cities in the United States and Canada), and the largest .
Could a government-led venture into cryptocurrencies help buoy the country above socio-economic collapse? for example, Bitcoin was 18 times more volatile than the Euro in the traditional money markets and all of Venezuela’s macroeconomic indicators show that it is not an ideal lab for a cryptocurrency experiment.
But at the same time. As of , the European Coal and Steel Community begins to unite European countries economically and politically in order to secure lasting peace. The six founding countries are Belgium, France, Germany, Italy, Luxembourg and the Netherlands.
Europe is the world's largest exporter of manufactured goods and services, and is itself the biggest export market for around 80 countries. Together, the European Union's 28 members account for 16% of world imports and exports.