Denationalization of fiat currencies followed by wealth transfer into decentralized cyryptocurrencies and crypto financial instruments. One way to visualize the world’s wealth this is to look at Exter’s pyramid. At the base of the pyramid is gold because it cannot default. Paper money the next level up can be made to be redeemable in gold but these standards invariably fail. When there is not enough gold in a national power’s hands to fulfill demand the gold standard will be dispensed with and paper money will effectively default. As we move up the inverted pyramid we arrive at government bonds followed further up by corporate debt and stocks. The combined value of these assets are far greater than the gold at the base of the pyramid is but at the same time the risk of default is much higher. Notoriously the top of the inverted pyramid are derivatives which in the best cases are a claim upon a claim upon a claim. The notional value of these instruments reaches into trillions of dollars. History tells us that these “pyramid” schemes eventually do collapse under their own exponentially growing weight. Such crashes inevitably lead to financial chaos and social disorder.
One way out of this mess would be to transition to a decentralized currency not controlled by a central bank and with a fixed money supply. An open source software application called Bitcoin, more correctly, the technology behind it (Nakamoto Block Chain) allow for the creation of a wide varities of currencies with different parameters. Bitcoin is a fixed deflationary currency. But one can imagine a elastic currencies being created that mimic fiat currencies. This is critically important because Bitcoin for all its strenghts is not a panancea. The deflationary aspect leads to hoarding like we have with the gold and/or silver system. New currencies are being developed right now that aim to solve this problem and provid a more elastic cryptocurrency with far less price volatility. Bitcoin has proven over time to preserve and grow wealth. However the rapid fluctuation in prices make certain types of e-commerce impractical. Future developments will lead us to solutions to these problems. Fortunately these are evolutionary incremental improments. We don’t have to make the quantum leap in technology to invent Bitcoin. Satoshi did that for us and everything we need to build a future monetary system is there. Below is a chart of Exter’s pyramid. Below that is a “wormhole” that is a way of visualizing the transformation from a fiat universe to a crypto financial universe.