This week's topic:
The future of finance and money.
As always - you do not need to read all of this to participate in the debate!
The financial crisis has made many people across the political spectrum suspicious of both the financial actors and of their own politicians. It is felt that large amounts of assets are moved to certain people, without these people having done anything constructive to earn the assets.
We are potentially seeing a lot of instability in the future:
• Defaulted companies and countries
• Large shifts and inequalities in terms of wealth
• Social unrest, ranging from increased crime rates all the way up to wars
Technical progress leads to automation and the increased unpredictability of what technologies and solutions will prevail lead to lower wages and a shift of income to those with capital.
From a liberal and libertarian view, the following factors contribute to the problem:
• Central banks are effectively printing money through something called quantitative easing
• Interest rates are held artificially low
These things conspire to gut the free market.
From a more leftist/socialist view it can be argued that:
• Multinational players move money effortlessly to push workers' wages down
• A lack of controls leads to runaway speculation
• A tax should be imposed on all transactions
New financial solutions
New financial solutions are seeing the light of day, often enabled by computing power and the Internet, and trying to bring in the small players (i.e. ordinary people) into what used to be the realm of financial institutes:
• Micro loans
• Crowd funding (kickstarter, indiegogo and fundedbyme for example)
• Crypto currencies. The pre-eminent of these in size and status is Bitcoin. As I type this, Bitcoin is surging and it could go either way whether this is the dawn of a new major currency, or a bubble.
One of the most attractive properties of Bitcoin and similar is that no central bank can print more of them, and their value should hold, as long as people have trust in them and use for them in other respects.
• New transaction networks such as Ripple
Old financial solutions
Gold - The currencies of the world used to be backed by gold, and many people argue that removing that (through 1971-1976) was a mistake, since the currencies now are open to manipulation that could give rise to hyperinflation. Currencies not backed by something tangible like gold but by decree are called fiat currencies. People arguing for gold are sometimes called Gold bugs.
From Shakespeare's Hamlet, 1602:
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
Some religions do not like lending and borrowing.
Islamic banking is one attempt to get away from lending. Nicolas Nassim taleb and Mark Spitznagel argues that lending and borrowing might be bad and that equity is better: "
Time to tackle the real evil: too much debt".
If you have the time, feel free to view some or all of these links:
Zero hedge - Doom and gloom site that only publishes bad news about the financial system. Can be grating, but many stories break here first.
▶ How Bitcoin Works Under the Hood - YouTube (20 mins) a bit technical, but very good
List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses - dangers with Bitcoin and similar
Overdose - The next financial crisis (46 minutes) Documentary with Johan Norberg on the financial bubble. From 2012
Directions to the place
Inside the café:
Go into the far (deepest) corner in the café. Go right into the wall there. Not kidding, go right into the wall. On your left there is then a staircase leading down. Some people are still unable to find the staircase, if you are one of them, just ask the staff to show you where the basement is. We are downstairs.
By metro + bus:
Take a bus from Slussen. 3 (towards Södersjukhuset) or 76 (towards Norra Hammarbyhamnen), get off at the second stop after Slussen (Åsögatan), turn right and walk 1 minute down Bondegatan. You'll see the café in front of you, at the end of the block.
By metro + walking:
Closest Metro station is "Medborgarplatsen", and the address of the café is Nytorgsgatan 38. If you look near the top of this page you will see this address, and if you click the name of the Café, a map should appear.
On that map, locate the big street "Folkungagatan" north of the Café, and trace it to the west until you see a "T" in a circle. That is the metro station "Medborgarplatsen".
From the main railway station:
For if you arrive with a suburban train (pendeltåg) or a long distance train. Grab bus 59 from outside of World trade center at the top level of the station (Klarabergsviadukten) and get off the bus at the Bondegatan stop.
The English Debate Club:
Challenge and improve your English skills with lively discussions and debates! Sometimes we stick to debate format, other times it evolves into a general discussion.
Participants are welcome to prepare beforehand or wing it - but everyone will be encouraged to contribute to the discussion.
Focus will be on crafting arguments in English, phrasing for emphasis and expanding vocabulary at an advanced level. Native English speakers who would like to brush up on their debating skills very welcome also!
It's okay to interject and to reply directly as long as it does not get out of hand (in which case a speaker's list will be more strictly enforced). People who have not spoken much get precedence.
If you just like to sit and listen that is fine too. For the few who really like to talk at length: You may be interrupted and asked for clarification, or it may be pointed out that you're repeating yourself.
First hour is usually a bit more free form, looking at the subject from different angles, and then we may home in on specifics more during the second hour