The systemic crises of capitalism and the alternative of a decentralized economy

Autor: Pipeline Capital
Tempo de leitura:
Compartilhe:

The collapse of Silicon Valley Bank and the threat of contagion throughout the Western financial system was not capitalism’s first systemic crisis.

Text by Pyr Marcondes, Senior Partner at Pipeline Capital.

The collapse of Silicon Valley Bank and the threat of contagion throughout the Western financial system was not the first systemic crisis faced by capitalism. Possibly, it will not be the last, if the structures of the centralized system are maintained, in which the gatekeepers are the central banks and the rules of operation and business are still linked to principles of a time gone by.

Or that they don’t recognize a new time that, some time ago, has already arrived.

The Fed’s action was swift and meritorious. Ditto of the European financial macrostructure. And that’s great.

But if we look for the origins of all this, we will arrive there in 2008, in another systemic crisis of the model, this one more overwhelming, and from there to here in a system that, for 14 years, maintained interest rates, notably in the US , managed “downwards”, making capital raising cheap and, apparently, without high cost or greater apparent risk. It is as if it were more expensive not to invest than the other way around.

The result is a distortion of asset values and prices, detached from a free market reality and anchored by administered rules of centralized financial management.

And the effect is a classic model, which we all know, of boom and bust. See chart below.

Inflation is the most obvious result of this whole process and, to contain it, the FED must continue to raise the cost of money to at least 5%. In other words, to contain inflation promoted by the regulatory model of stimulating indebtedness and accelerated liquidity, in which the price of assets distorts the vital signs of the economy, they are invested in initiatives that are not necessarily productive or profitable, and debase the value of the money. And, therefore, of capitalism itself.

I lived the internet boom, before the bust, in the late 1990s. I was General Manager of a portal that broke in the bubble of 2000, called Starmedia. There was a common phrase at the time …” money is not an issue”.

Like this? Money is always THE issue.

In recent years, market liquidity has been the norm. The distortions I mentioned above ditto.

Now, the retraction has caused these assets excessively (and unduly) exposed to risks and inconsistencies to return home. And they turned into dry powder. Resources, capital, investments, locked in investor vaults. Which will come out in broad daylight when US inflation shows signs of control. That will happen later this year. At the latest, early next year.

And then, you know what? Gooooooooooooommmm!!! All over. And over again.

This is just a light analysis, but let’s also, slightly, think of an alternative: a decentralized and open economy, in which the financial supply chain was all tokenized and managed on blockchain and the assets were all digital assets. Just imagine.

The Pipeline Capital Investment Group will soon launch a white paper about all this and a little more, in which it defines (and defends) a new look at macroeconomics and the investment market. Wait.

Text by Pyr Marcondes, Senior Partner at Pipeline Capital.

Article originally published by Exame.

Follow news through the website https://pipeline.capital
and also from LinkedIn
and Instagram

Compartilhe:
Avatar photo

Pipeline Capital

Pipeline Capital Tech Investment Group is a tech-driven advisory and investment platform that integrates intelligence, excellence, international presence, and profitable ventures for founders and investors. Established in 2012, Pipeline draws its name from a famous Hawaiian beach, as its founder is an avid surfer, symbolizing how the business world comes in waves, the opportunities rise and fade swiftly. In the business landscape, it’s crucial to be prepared to spot, anticipate, and capitalize on these waves of opportunity, so our mission is to support companies in catching the best waves and riding them with excellence to secure the best deals. We are not a traditional M&A and investment firm. Instead, we were founded and are managed by entrepreneurs who are also partners of the company. With years of expertise in Tech, Advertising, Marketing, and Finance, we possess deep knowledge of the tech sector and extensive global experience. As a Capital Tech Driven Company, we believe the best business opportunities lie in the intersection of investments and technology.

saiba mais »

Últimas Postagens

The Current State of Tech in M&A: Innovations, AI, Regulations and Trends

The world as we know it is evolving faster than ever before. Technological progress is accelerating and generating new opportunities for mergers and acquisitions

Understanding Due Diligence and its Focus on M&A

What is Due Diligence? Due Diligence refers to a systematic process of investigation, audit, or review that is performed to verify the accuracy of

Pipeline Capital advises Supersonic on its sale to Etus Media Holding

In a transaction set to transform Brazil’s digital marketing landscape, Etus Media Holding, a MAdTech firm combining Marketing, Advertising, and Technology, announced the acquisition

Do you know where your company is losing value?

Many companies are growing and generating revenue, but without realizing it, they may be losing value due to hidden factors. This happens when ineffective

Connect to the best of M&A world Subscribe to our Newsletter

Pipeline Podcast “Papo de M&A”

Pipeline Capital’s podcast on mergers and acquisitions, innovation and technology.