Money is Cheap
The world is overflowing with capital as the central banks around the world are printing their respective currencies to infinity. There is so much money being printed at this time that even the commercial banks, especially in the United States are advising their corporate clients to move their capital into other banks or spend their money on their businesses.
These corporations like AT&T, Google,Apple etc have trillions of dollars in their bank accounts which is earning zero percent interest. Folks mention that this is a bad thing as all this capital is basically sitting in their bank accounts while inflation is eating away their purchasing power.
This is quite an interesting scenario as these corporations don’t really have any idea what do with their capital; these central banks like the Federal Reserve is making their money printers go BRRRRRRRRRRRRRRRRRRRRRRR. Actually, The Federal Reserve digitally creates money in their system.but, you get the point. 🙂
Here is what i have to say, We are living in a time where there is so much money that “Capital is Cheap”, we should be using this massive amounts of capital into all kinds of technologies like the Blockchain, Robotics, AgriTech, FinTech, Space exploration, Transportation etc. Every business that is able to take this money to create more value to the world.
Just because these banks have no good ideas of their own , doesn’t mean that you cant put this money to good use. There has never been a profitable time to start a profitable business that solves problems for other people. There is so much money in this world, some say its a good thing and others say its a bad thing, it depends on your political viewpoint.
WHY there is too much money?
Here’s what we need to do with it, First, we need study some monetary history about how we got to this current scenario in the first place. Let me take you to August 15th, 1971 when U.S. President Nixon has severed the US dollar from the Gold Standard. In layman’s term , you cannot convert your dollar into gold anymore.
The big question is WHY?
French President Charles de Gaulle has sent a warship to the United States to pick up their gold. 6 years before the US has severed the US dollar from the Gold Standard, French President Charles de Gaulle has given a speech about the US money printing in 1965.
To hear both the audio clips of President Nixon and President Charles de Gaulle, you can click on the link below –
After 1971, A lot of money/currency has started to be printed in a massive scale, which resulted in inflation of the US dollar. Below are the graphs for your reference with regards to inflation.
INFLATION MEANS EACH DOLLAR BUYS LESS OVER TIME
As inflation goes up , we will experience the cost of goods and services going up as well as asset like real estate, stocks etc. When these assets that we considered to be stores of value increase , we are experiencing an asset price bubble.
The money is making it back into the stock market, which is likely through cheap debt and leveraging. This is making price earning ratios go crazy.
The US has been printing money. The total money supply went from $15.3 trillion at the start of 2020 to $19 trillion in September 2020. i.e.
We have central banks like the Federal Reserve printing money to infinity. Consumer prices are going up, the stock market prices are rising up and many corporations have massive deposits of cash to a point were the banks don’t even want to hold more money anymore.
The World is Running out of IDEAS
In my episode of the FINfluential, I played the audio clip of Peter Thiel back in 2012, where he berates Eric Schmidt, the CEO of Google about the $50 billion in cash they are holding. He questions Eric Schmidt if Google is running out of ideas to make use of their massive capital.
In that conversation between Peter Thiel and Eric Schmidt , he mentioned that ” If we are living in an accelerated technological world and have zero interest rates, you should be able to invest all your money into things that will return many times over.
Just FYI, Google has about $115 billion in cash as of 2021.
This shows that these big corporations with massive cash deposits are willing to keep their money in banks at zero percent interest or they don’t know how to deploy their cash or capital into ideas,business opportunities etc to make returns many times over.
Here is another quote by Peter Thiel –
Does it mean that this could be the end of capitalism as we know it? Maybe? Could be ?Is it really Capitalism at fault or the corporatism that is at fault. Its hard to say whats the right answer but, I do believe we have a solution to this conundrum.
That simple answer is technology, you and i can be able to make use of the massive capital that is just sitting in the banks and be used to fund incredible startups and companies that are actually solving the problems in the marketplace. Many of these technologies can create jobs and bring enlightenment and fulfillment for the majority of the people. Of course, we will also see great prosperity and wealth being created like we have never seen before.
YOU can save US
The only way to bring all these technologies, capital and human talent to reality. The real answer starts with YOU. It doesn’t matter if you are a startup or as an individual, you can make all this possible to help bring in new technologies that can change the world.
Its a crazy reality we live in where there in infinite money creation by the central banks; there are corporations that have trillions of dollars in bank accounts accruing zero percent interest. We have these corporate executives that don’t know how to deploy all their cash and capital into new ideas or even come up with their own ideas.
Here are some technological ideas i would like to shed some light on –
We got the Blockchain technology that is revolutionizing almost every aspect of our lives. Through the blockchain, we have cryptocurrencies and smart contracts that will empower the individual to attain economic,financial and personal freedom to a new level.
Advanced robotics is another technology that could benefit from the infinite money printers. Some of the things that used to science fiction is now a reality or a scientific fact. Good example in robotics is in automation in transportation, warehousing etc.
Food Tech /AgriTech will be another arena for infinite money to flow capital that will help bring incredible growth in quality and healthy food for humanity’s consumption.
You can believe the Jetson’s future is right around the corner. Its closer than you think.
I would like to put more emphasis on the traditional banks and financial institutions, For a long time , these legacy institutions haven’t done their jobs well. In this arena, we will see massive shifts and technological changes take place especially with the rise of challenger banks and decentralized finance revolution.
The future of DeFi through cryptocurrencies will replace these traditional financial institutions. Insurance, Lending and manners of FinTech will be consumed by software by helping people to do things better,faster and cheaper.
These changes are inevitable, great startups and technologies will get the funding needed to bring in more prosperity as well as create more wealth in the world that might have not existed in the world. back in the old days , lot of these ideas couldn’t go forward because of the lack of capital, but now we don’t have any reasons that can halt progress.
100 years ago, If we were to start our businesses , We would need to be well connected or our family to be wealthy.But, now in 2021, With 0% interest rates and trillions of dollars all around us, We are only limited by our own ingenuity, skills, organizational skills an dour vision to create a future that we want to see.
Lets go get that Future
Speaking about the future, The Cryptocosm will be launching its own podcast soon with the goal to bring voice to amazing people who are doing amazing projects and businesses in cryptocurrencies and blockchain. There is more work to done and help evolve the FINfluential to help bring in financial education to the people.
The Best is Yet to Come