The modern world of finances can be considered as a big “stock exchange” market. It seems that all is tradable today: securities, currencies, commodities, volatility, price indexes, “fear” indexes, future interest rates as well as a big variety of derivatives instruments from ordinary ones to really exotic. The cryptocurrency market with current capitalization ~$365 bln looks tiny in comparison with the fantastic scale of the traditional market valued ~$68 trillion by the World Bank:
In fact, prices for almost all base goods, commodities and obligations are determined by stock exchange market and have a critical influence on the world economy on a large scale. The most known example is a crisis of the subprime mortgage market in the United States which possessed a full-blown international banking crisis driven by the collapse of some investment banks on September 15, 2008. This crisis affected almost all sectors of the economy and led to an extreme market crash that resulted in a significant prices decline. For example, the price of the most tradable commodity - crude oil dropped in 4 times while the NASDAQ index lost 83% of its capitalization. The mentioned indicators that characterize crisis demonstrated that it was the most significant crisis since the Great Depression. It is not surprising that the message, that Satoshi Nakamoto placed in the Bitcoin Genesis block links launch of this independent currency with this crisis and following “money printing” by central banks.
Despite the fact that stocks recovered (as a result of Quantitative easing or QE), the stability of the finance world is doubtful. The global economy is on the verge of another global financial crisis with the global pensions deficit, meaning the total outstanding pensions liabilities to people, including all asset classes, currently at $78 trillion. It is expected to reach four times the global GDP by 2050. But, the critical problem with pensions is just one of many. The global debt problem is no less important. Government debts are rising year per year: In the USA alone, the national debt is over $22 trillion up to date. However, according to estimates of top-tier economists, the US fiscal gap may be up to ten times greater. Total world debt is estimated to be as high as $244 trillion. The mentioned problems draw significant attention from people from all over the world and are the major reason to create an alternative, more stable and transparent economic system based on technologies of web3.0. During this special round of the quest, we decided to examine the community knowledge of “outdated 2.0 economy” based on fiat money and centralized institutions. Enjoy!