By Alejandro A. Tagliavini*
The “old world”, where politicians build borders -create «international» conflicts- and impose “laws” with their monopoly on violence (the State), is inevitably being left behind, simply because borders and violent impositions are unnatural. Of course, this will take years and it will not be a revolution, but – like everything in the real, natural world – a slow evolution, a maturation. But beware, beyond the fact that the digital world is still incipient and, therefore, with errors and deceptions, many are being left out because the technological development that drives this «new world» is accelerating by leaps and bounds to the point that an enormous most don’t even have enough time to catch up.
The government of the «global locomotive» -USA- is leaking everywhere and it will be difficult for it to end up moving forward. According to the CEO of JPMorgan Chase, for example, a «hurricane» is approaching in reference to strong global inflation and the rise in interest rates and advised «take cover».
In this country, prices are skyrocketing, there are shortages of certain items, and economic activity in general is slowing down. 85% of Americans believe there will be a recession in the next year. New single-family home sales plunged 26.9% from a year ago. After breaking the all-time record, the average price of a gallon of gasoline in March has risen 42 cents above the previous record and is now at $4.59.
Commerce Department data shows the personal savings rate fell to 4.4% in April, hitting the lowest level since 2008. The average age of a car on the road has hit an all-time high of 12.2 years. Six million families have problems with the sharp rise in food prices, which rose 9.4% in April compared to the same period last year.
Few have doubts that this crisis will surpass that of 2008 and it is still getting worse. In 2008, the national debt exceeded the threshold of USD 10 trillion, but in 2022 it has already tripled over USD 30 trillion. And they have less capacity to pay it since, ironically, «in order to lower inflation» they increase interest rates, complicating credit. So the situation is much worse as a result of all the bailouts and all the stimulus.
It happens that politicians love to spend, in fact the money is not theirs and so they printed «helicopter money» at large and now, quite scared, they are trying to control the emission. The money supply of M2 was reduced in April compared to March, which registered the lowest moving rate of variation of the last three months since 2018. If this monetary growth of these last three months continues, of only 2%, inflation will end up decelerating although, knowing the politicians, it is early to get excited:
Growth rate of M2 -every three months- annualized.
By the way, as Bloomberg found, it seems that «frontline» economists don’t have much idea what inflation is, in fact, it didn’t come down as they had consistently predicted:
Real inflation (increase in the CPI, strictly speaking) Vs the «expectations» of economists.
In short, these «stimuli», that is, these outrageous spending by politicians in order to «reactivate the economy» after the incredibly stupid idea of paralyzing the country with quarantines and other restrictions, today is more than paid for. As a witness case, in the short time since 2022 the FAAMG lost everything they won during 2021:
Some may say, and rightly so, that this is a frivolous view of the current crisis. Because the truth is that these quarantines and restrictions have caused the hunger of hundreds of millions of people throughout the world, causing much greater human damage, exponentially greater, than what they supposedly prevented.
All in all, imagine how the rest of the world is, considering that the US economy is the best, which is evidenced in the dollar (the DXY index, strictly speaking) that does not stop rising compared to the other global currencies:
In short, if any entity represents the establishment of this world that is leaving, it is the World Economic Forum (WEF) meeting in Davos. And even there, they could not escape the reality that is coming, although they try to hide it, and control it, which in the long run they will not be able to achieve. Thus, the blockchain occupied a prominent place during the discussions at Davos 2022 and especially the issue of Central Bank Digital Currencies (CBDCs) with which, ridiculously, they intend to surpass the already established «cryptocurrencies».
The CEO of Mastercard, «was mouthful» and, during a discussion on the future of cross-border payments between nations, suggested that the SWIFT system, which allows governments and central banks to quickly and accurately exchange data and transfer large sums of capital, long dominated by Western interests, could in a few years become obsolete in the face of the proliferation of digital currencies.
Almost every major central bank in the world is now implementing a digital currency program, and the IMF has been vocal about the need for a global system in the near future to provide «stability» in the face of the inflation crisis. Showing that they are going to fail since what they seek makes no sense: neither inflation is solved as they propose nor digital currencies can in any way help in this regard.
The Kremlin has often talked about using cryptocurrencies and digital currencies to circumvent restrictions, and China is currently setting up digital products to work with SWIFT and the CHIPS (Clearing House Interbank Payment System) settlement system. It would appear that Western sanctions are only hastening a global move away from dollar-denominated structures.
Meanwhile, the digital world, despite the strong punishment that all markets have received, continues to develop and grow by leaps and bounds. Last week, within DeFi (decentralized finance that allow operations without the interference or espionage of banks and central banks), Uniswap surpassed a trading volume of USD 1 billion.
By the way, much is said about the instability and insecurity of «cryptocurrencies» but Bictoin, for example, has been losing less than the FAAMG while the DeFi insurance protocol, InsurAce, due to the collapse of TerraUSD (UST) has processed almost all 173 claims filed and will pay $11 million. InsurAce (INSUR) is the third largest provider of insurance for decentralized finance (DeFi) protocols, with a market cap of $15 million.
And now the NFT 2.0, the Web3, are coming. Regarding non-fungible tokens (NFTs), the truth is that the demand has skyrocketed, institutions have been created and the jargon has entered our collective consciousness. In their short existence, NFTs have burst onto the “cryptocurrency” scene, surpassing $17 billion in trading volume in 2021. This figure is expected to skyrocket to 147 billion in 2026.
Along with the meteoric rise of the sector, NFTs themselves have undergone enormous changes since their inception. For instance, CryptoPunks, which were free when minted in 2017, rose to blue-chip status, peaking with an $11.8 million sale at Sotheby’s last year. A few years later, Larva Labs, the company responsible for creating the Punks, was acquired by Bored Ape Yacht Club’s parent company, Yuga Labs, for an undisclosed amount.
Despite a significant drop in logical fit, and initially dismissed as a fad, NFTs have shown enormous staying power, garnering the attention of major celebrities and brands and even appearing in Super Bowl ads. Companies like Budweiser, McDonald’s, and Adidas have released their own collections, while Nike has entered the space by acquiring RTFKT Studios.
And now we are entering a new era of NFTs, NFT 2.0, where the technology will be more easily accessible to the public and the underlying value proposition will be more transparent and trustworthy.
And Web3 is also coming, which, most likely, will cause the fall of companies that cannot be updated from Web2. Agencies and platforms that don’t adapt quickly may be weeded out, but those that are ready for change will maximize high-margin, high-touch, high-communication projects while capturing long-term revenue streams. This space is going to grow and evolve rapidly. As a top industry guru says “Don’t blink, or you might miss it”.
* Senior Advisor at The Cedar Portfolio and Member of the Advisory Council of the Center on Global Prosperity, de Oakland, California
Alejandro A. Tagliavini 
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