We are on the brink of a significant economic crash driven by inflation, unsustainable debt, and misguided government policies, despite advancements in blockchain technology aimed at improving financial accessibility.
Economic Insights
Tokenizing life insurance policies on blockchain enables investors to buy fractional shares of whole life policies, providing liquidity and allowing insurance companies to securitize policies and raise capital more efficiently.
The US dollar’s status as the world’s reserve currency is likely to end by the 2040s, with its share in forex reserves trending down since 2000 and potentially falling below 50% in 2042.
The US government’s record $35 trillion debt and deficits over $1 trillion per year have been temporarily managed through quantitative easing, but will eventually lead to significant economic problems.
Historical Perspectives
Bob Murphy’s book challenges conventional wisdom on the Great Depression, arguing that FDR’s New Deal policies were ineffective and Herbert Hoover’s spending was greater than commonly believed.
Current Economic Trends
The Federal Reserve’s aggressive interest rate hikes in 2022, pushing the fed funds rate from 0.40% to 5.00%, coupled with an inverted yield curve, indicate potential economic instability and recession risk.
Government statistics may not accurately capture the true state of the economy, failing to account for changes in consumer behavior and the increasing use of decentralized finance and blockchain technology.
Policy Consequences
Low interest rates lead to malinvestment and allow bad businesses to survive, causing economic distortions and inefficiencies, as seen during the 7-year period of near-zero rates from 2008 to 2015.
Price controls and wage freezes can lead to shortages and inflation, as evidenced by recent economic policies under the Biden administration, highlighting the unintended consequences of government intervention in markets.