Topic: A Crisis in Central Banking: Will It Soon Explode? (Read 1638 times)

This isn't something like petrol prices that miners will just pass away the effect. In decentralized economy one is free to choose so if miners continue to hike their fees in such a way people are free to move to another cryptocurrency. Moreover, we need such a system wherein everyone is taxed but everyone is provided adequate amenities too. A government won't provide amenities without tax. We need to think of a system with govt where crypto fits in.

a country needs tax to be able to fund their Health, education, transport etc. systems.
if for instance a country started to tax mining it would have to be regulated and this
goes against what crypto is about.

also if countries taxed mining, miners would just pass those taxes down the line to
transactions in the form of fees, as in fees will increase. not good and its not going
to happen anyway.

Cryptocurrency doesnt really have tax, so if the government just allow it, soon it will become the citizens' source of income. If that were to happen, the government wont have money for economic purposes. Sometimes the banning of bitcoin may solve issue to a country's bankruptcy. Their banks that allow cryptocurency in their own place but that is only for 3rd world countries. If a country can make infrastructures for crypto mining, then tax wont be a problem anymore.

They can regulate the value of money only when there is no other alternative Fiat. Central banks run the mechanisms of inflation and deflation. Thus they constantly climbs into his pocket to people and shift their shoulders all the mismanagement of the economy by the government. Bitcoin changes this system. Therefore, banks are afraid of him but don't know ways to deny it.

I don’t think so that the crisis in central bank will leads to explosion of allegations. The central banks govern all financial intermediaries in all commercial or digital banks in their country. They the one who regulate and solve the issue regards to the monetary value of money.

Come on, you have to be trolling.

The balance sheets of the big central banks have grown to unprecedented levels.
This has lead to an also unprecedented rise of asset prices (real estate, stocks ... even Bitcoin).

On the other hand, the working class, who doesn´t own as many assets as the elite
had to stomach a big decrease in the purchasing power of their wages.

Expanding the money supply devaluates the money that is already in existence.
This is one of the reasons why the supply cap of Bitcoins is of paramount importance.
Sound money will make the world a better place.

Before the 1960s the money was guaranteed gold. Lol! This is what country was that? If you mean the USSR it is not true. Some banknotes do this was written, but it was a lie. Dollars had a label until 1925. Probably for this reason that these notes are withdrawn from circulation. After the second world war, the world is ruled by the dollar. It is not backed by anything.

Very well said which I do really agree on the words that you said on here. Terms used isn't really appropriate on the things that have been asked or being queried. Banks cant do nothing when it comes on decentralized crypto this is why I can see that they would rather make their own path that would really be more different on what we are seeing on crypto. Regarding crisis I cant see such thing as of now.

There is no crisis in the central bank, since they provide well systemize management in all aspects. Besides they make a detailed decision for every circumstances to avoid conflicts.

I don't really think there is much sort of crisis currently in the system. Even if there is any such crisis its just momentary and would soon turn to boom. We are still not at the verge of end of fiat system. But yes I saw the gold silver theory by Mike Maloney his theory seems to be quite convincing and we might see a huge setback in system due to it. Not quite sure if cryptos are the correct way out.

Bitcoin has completely changed my Outlook on deposits. I never trusted banks so I never had deposits. Me some of percent of income per year are not worth the risk to which I exposed when have money in the Bank. After in 2008 I saw how bankrupt a lot of banks, I only use them to have a credit card.

I guess it will soon explode should it not UP its game when it comes to handling the money affairs of all its clients. We are fully aware that when you deposit your money in banks, it does not earn much interest. Hence, many relate banking to just storing or safekeeping their hard-earned money because they know fully well their money does not grow in it. This is basically the reason some would most likely invest their money in properties, stock market and the like rather than storing the same in banks.

It seems to me that banks are losing trust not only because of the mortgage crisis. Banks are parasites on the people. If you put money on Deposit then you pay the minimum. This is only enough to compensate for losses from inflation. But if you take a loan from the bankers you have to pay big money. Many people have lost everything that is acquired in his entire life.

It is true that there is a real crisis of confidence in central banks and in banks, mostly because of the subprime crisis. By printing money at will, the central banks have increase the debt of the Country. All because of the banks. They should have leaked all these banks and all the companies that did anything.
Will the banks explode? Every year we hear all kinds of specialists who tell you that we must be careful that the crisis will happen, that countries will not be able to bear their debts etc. For the moment, it is not yet the apocaypse, the system still holds

Central Banks will always find a way out of the entire situation and because government continued dominance relied on them getting it right, they will still have the support. It does not cost the government anything to even borrow from other countries and let the citizen pay till the next century so far they continue to keep their dominance.

Central banks, no matter how we detest their policies, a lot of citizens still relies on their existence which is what matter all we have to do is to find a way to continue operating and keep our own finance from their own bubble whenever its going to happen. It maybe now, it maybe never.

Our Central just gave a good to go written deal on cryptocurrency. Although it was not directly passed in the legislative, at least the bank made good deals on services about bitcoin. Affiliating banks to allow users to withdraw their own money at some banks.It might not be easy if it went to legislative requiring many signatures and even attracting media and i dont even trust medias to makes ads about cryptpcurrency.

well, at this stage i own very little sums of cryptos. i am just learning how it works. but because i concidere bitcoin honest money i would very much like to see the economy functioning with cryptos instead of fiat currency manipylated by the banks for their own profit. my concern as i said is that in the next crisis cryptos will show disadvantages instead of advantages and that will scare people away. i dont see cryptos only as store of value...sure thats one role to play, but if the dont function under any cercomstances (heavy volyme, banks closed) and if they dont fullfil their means of exchange role then i suspect they will be hit hard in a 2008 situation

From this no one is immune. But tell me why you need the bitcoin. I understand that you want to earn more money to buy yourself something that you wouldn't buy with Fiat. Why do you hold bitcoin for a long period? Buy. Then you will be immune from any crisis. If you hold your coins it means that the money you do not need and you do not wish to lose them.

hello everyone,
the issue of the next economic crises is in my mind also. we very well know that every 7 to10 years some kind of economic crises explodes. So next time arround cryptos will be here as a safe heaven. but because i live in greece and i have seen first hand how an economic crises unfolds let me share some thougths with you.
Some day we will wake up and the mainstream media will shout that the stock market is rapidly declining. the goverment at first will say everything is under control but then few days later will pass strange laws that you couldnt imagine beforehand. As for the banks, at first they will try to keep mute about the bank run and when situation only gets worse then they will implement what we call here capital controls, meaning every person has a limit as to how much money can withdraw. anyway to make a long story short money got stuck in the banks.
Now we all hope at some point in time cryptos will help us get rid off the banks but i am talking what will happen in a year or so...
Imagine you own some money in cryptos and you want to turn some of it in your nation currency so that you can go and buy the everyday staff. if you are lucky and your crypto exchange is still working and not out of order due to heavy volume (as coinbase was yesterday) then money will be sent to your bank account or your card...But what good is it if your bank will not let you access that money due to capital controls?
Here is what i fear and please share your thougths.
When the crises begins maybe cryptos will rise even fearther, but when people in big numbers try to redeem some of the cryptos to facilitate their everyday living the system will colapse. Either the exchanges wont have enough fiat or the money eventualy will get stuck again in the local bank. The only way arround this situation (meaning the need to redeem cryptos to fiat) is if everyday needs can be paid for with cryptos directly (as if paying your local gus station, groceries etc,so life can go on with closed banks) and i believe we are not there yet.
So next economic crises insted of proving the advantages of cryptos will prove their uselessness?

You are wrong. The main objective of banks is to stimulate the economy. Every person has a stockpile of extra money. In order to make this money work for the economy, banks make loans to companies. With bitcoin it is not possible so I see no reason for the existence of banks if all people will use bitcoin.

The biggest percent of people is not satisfied by the work of central banks and banking system in general, that's why many people turned to crypto currencies, which can give them much better terms. Bans see it and already become provide different kinds of reconstructions to be more welcome to people and to not loose their clients. It is not a crisis for banks - it is a new life to which they should to adopt.

If bitcoin will get a global distribution of the existing banking system has nothing to save. She can't compete with bitcoin. Banks are parasites on humans and that's why people don't like them. Banks can go to work with the state or die. I think the banks will set the politicians to ban bitcoin.

They need to cope with that change, apparently, crying and blaming game is not the solution for their problem but rather shaping their system to fit with the current environment, as you can see they are now speculating too much and anticipating that the end of central banks is near, the solution here is to adapt the change and start creating new things that may save them.

The functionalities and the workplace of central banks are very traditional and rigid . Remember the days , when banking system was just on papers . That time was the worst . The introduction of computers and technology to the banks was a big push for its management and handling the records easily . The officers themselves were satisfied after the division of load with machines . But now the era of Net banking , Digital Currency and of course Bitcoin has come . History has given many evidences that coping with new changes totally shake the banking system . "EXPLODING" is a big word but it can highly "TRANSFORM" the way Central Banks works . Because with the advancements and developments people are also expecting something easier that the rigid banking systems.

Yes and that platform has starting to make a difference in our society now that the central banks opposes because it is the proof that the financial system in our world is manipulated by those in power.. A reality that most of us know but we ignored for a long time as there is no alternative to take a stand of this monopolistic control on our lives for more than a lifetime.. Cryptocurrency popularity is a revolutionary statement by every individuals who experienced the past and trust a decentralized one..

I wholeheartedly agree with the first part of your statement. Cryptocurrency and its related technologies are still in its infancy and therefore still have a long
way to go. Besides, the amount of nefarious actors who piggyback on the success of Bitcoin is way too high at the moment. Just look
at the BTC forks that are getting even more ridiculous by each new one.

The prime example of this week is probably the Bitcoin Diamond fork that was supposed to happen yesterday. A shitty website
combined with a GitHub that has an incredible 3 (!) commits:
https://github.com/Bitcoin-Diamond/BitcoinDiamond

However, I disagree with the second part of your post. I think central banking is the issue, because central banks have historically been prone to
increase the money supply, which devaluates the savings of the existing holders of the respective currency. A system with a predictable currency supply
like Bitcoin removes this and therefore encourages a lower time preference.

This distrust on banks is not yet very pronounced as we all know that banks are playing very critical role in the overall economic system. And it is precisely because we trust them so much in the past that people are reassessing if the trust bestowed on banks is worth it especially as we are about to leap into the future. What happened in those countries you mentioned was one of the reasons why people are now questioning the integrity of the banks because obviously corruption had already hacked into their integrity and promises are already meant to be broken. In the face of all the economic problems faced by the banking system, soon cracks would be visible and we don't want to be part of the population holding empty bags and just served empty rhetoric.

Oh Bitcoin is definitely a giant leap towards independence from the central banking system!

But it's just one step of many. We've only just begun to understand the nuances of cryptocurrencies and its related technologies. For the most part we're still making up shit as we go. The crypto-ecosystem still falls in the same traps as the traditional market with its booms and busts and bubbles and pennystocks. We need to grow up first.

Maybe central banking isn't even the issue. Maybe it's merely the illusion of control that needs to be given up. Luckily Bitcoin gets rid of this illusion by being a plain, simple and uncompromising protocol. But I doubt that this alone makes for a suitable alternative to central banking. Nonetheless, in my humble opinion, it's a necessary step in the right direction.

They can support them but can they help them with the problems they're facing? You can only print money for so long. I know you have your own beliefs, but you can't deny the fact that the banking system has already failed. You can't reason with math and it shows that the inflation is killing every single fiat currency and for now they're buying time, printing money, stealing from people, but for how long? At some point it will have to reset just like it did in Zimbabwe for instance, where they had to rebuy currency at lower rates and replace it with a new one, which was nothing but a theft. They stole from the people to keep the country afloat for a couple years.


I haven't said that it can! Show me where I did that please. I don't trust them and I think they will crack under pressure at some point, which means the whole foundation of a country will have to be rethought and rebuilt.

But you are posting on a website that is dedicated to the one asset that is a suitable alternative to central banking!

You should really get your pre-order in for this upcoming book by Saifedean Ammous:
https://www.amazon.com/Bitcoin-Standard-Decentralized-Alternative-Central/dp/1119473861


This process will most likely take another 1-2 decades, but it is inevitable in my opinion. A system without a central authority that
enables certain actors to siphon off a huge chunk of the productivity increase is simply superior to the status quo.

"Whether they still fully understand the effects of interest rates" -- I honestly doubt that the effects of interest rates have ever been fully understood in the first place.

That being said, while things look grim I'm still positive that for the most part economies have grown ever more stable due to the economic learnings of the last few decades. Still, it's going to be interesting times -- in the negative sense -- once interest rates get increased again. Given the current global economic situation we are entering more or less uncharted territory.


Central banks are definitely not the best way to handle things. However since, as mentioned above, the effects of interest rates -- and actually the whole of economics -- have not been fully understood yet, I doubt we'll come up with a better replacement for central banks any time soon. Even if cryptocurrencies are part of the solution, they are only one piece of the puzzle.




Any local transaction, regardless of whether it's made in Bitcoin or the local fiat currency, stimulates the local economy. It only fails to profit the state if the seller or service provider fails to pay taxes on their income.

As late as 1930's (a couple of years after the free banking era), anyone with a banking license was printing their own currency, all that changed today is how cryptocurrency is digital and back then it was on paper. The federal reserve was introduced at the end of the free banking era to control monetary policy and the economy due to the problems associated with the unregulated issuance of currency (related to trust). After WW2, central banks were formed all over the world. Most pegged their currency to the US dollar because the US dollar was backed by gold (and don't forget trust - banks run on trust e.g. 2008). All that changed when the US went full on into Fiat currency, the French event sent their battleship to collect back their gold.

Welcome to the new free digital-banking era!
All you need to do is look back into history and you will see its relation to today's cryptocurrency. History will just repeat itself, only this time, governments (typically group of big whales) will create centralized bodies around cryptocurrency. Back then the federal reserve was composed of the biggest financiers (JP Morgan, Rockefeller etc.), in the future the Bitcoin Federal Reserve will probably be composed of those in the NYA agreement (core, miners, exchanges) and Ethereum (need I say more - Ethereum Foundation) - this is already happening .

Do you know when the central banks lost it? Back in 2008, even today, central banks have no idea what to do to stimulate the economy. All they did was pump up the stock market, the problem is central banks have a balance sheet too....When central bankers go for negative interest rates (pay people to borrow money) or when they blame Millennials for not spending enough to stimulate a stagnant market, you know its only a matter of time before things really go downhill for central banks.

A change is needed..no doubt about it. Though the Central bank plays a vital role in the economy, but some corrupted people use this as a weapon to gain their dirty object. Banking system of some countries is corrupted and the system helps to produce defaulters. Political power influences on this and many politicians take money from the bank with their negative influences and ultimately they become defaulters. Money can be  laundered easily through bank illegally and this number is huge. So, a crisis  then arises to protect the banking sector and to fill up the vacuum with people money without having their consent. A system which runs by the money of the general people without their consent , i think that should be called " illegal" and "dangerous".

For me problem in central banking is that they are using people's money for them to earn from it. Whenever people are putting their money on banks it is invested by those banks to the market and they are just giving low interest to their depositor's. So when the economy of a country goes down banks will have a hard time to return the money to their depositor since most of the investments that they have is also depending on the economy of their country.

Moving money out of the banks doesn't mean that you are not using fiat anymore, yes as of now fiat currency is the one that we are using for everyday purchases but you have an option not to deposit it to any banks and have it stored on your place. Problem when you are placing your fiat in bank is when that bank goes down your fiat will be included on that fall.

You are wrong. The state cannot exist without banks. Fiat is the blood of any economy. Banks on the basis of this analogy, the heart. If it stops, the state can not exist. At the very least the state will use the mechanism of inflation and people will pay from his pocket for all the mistakes and fraud of the banks. Bitcoin may not be an alternative for Fiat. Everything will remain as it is now.

You have confirmed that the state will by all means to support the banks. We have not seen the attacking actions on the part of the state. In fact, the banking system around the world linked. They can easily unite in the fight against bitcoin and the government will on their side. It seems to me that banks will not have problems to close all the exchange of bitcoins for Fiat online. What will happen to bitcoin?

I admire your trust in the almighty and powerful state supporting the trustworthy banking system, but we could see it all going down numerous times. For  instance in the EU some countries have already went bankrupt. For instance Iceland was so indebted that they decided to ignore it, just like that guy who takes so many loans that he's no longer earning any money from his job, it all goes towards the interest. One day he says fuck it all, doesn't go to work, quits his job and starts drinking in bed. 
Cyprus had to steal money from its citizens save its banks from going under. Greece had to take financial support from the EU, otherwise it would have gone bankrupt  Do you really believe it can't happen again on a larger scale?

It seems to me that you are mistaken. Banks will never collapse. The banking system is mounted in a state economy. If it collapses it will mean the collapse of the state. In such circumstances, holders of bitcoin will also experience problems. No I don't believe in such a situation. The state will give money to banks for free. Only that they existed.

Personally, I don't trust banks and I'm in the process of moving my money out of them. I actually don't need most of the things they offer like loans, credit cards, savings accounts. The only thing that I'm using are the normal sepa transfers and when cryptocurrencies take over I'm no longer going to. People always had limited trust towards banks because they were always operating on bigger sums than they could support. If me or you did it we'd be committing a fraud, but for them it's completely legal.
Now since the Cyprus bailout and Greek banking crisis people are even more suspicious of them. It's only a matter of time before it all collapses.

Change is inevitable and one who can't cope up with the changed eco system, will have to be extinct. So it may be true that if a particular statistical model worked in past, may not be fruitful in the present or future. Initially a Central Bank used to control the money flow in to economy but with the presence of crypto currency, a lot of uncounted money gets pumped in to the economy. A lot of people are earning well without having a job or a business. Their purchasing power is increasing and money is getting pumped in to the economy. So if the interest rate had worked well to control the money flow in past, may not get you desired result in future.

However, I don't think we need any new system other than the Central Bank as of now because they are the backbone of a country's economy and policy. It may become a challenge in future for a Central Bank to use the age old method and they will have to think of new policies and tools to control the economy, but the current system is functioning well and need not to be changed.

Bitcoin is now more competition in the traditional banking system. But his distribution and capitalization is too small to be a threat to banks. I am sure that it will be a problem in the future. Bitcoin does not stimulate the state's economy. Without a functioning economy, not the state. It is a conflict of interest. If it does not resolve then the state will be forced to declare war on bitcoin.

Central banks are playing the most important role in a country's economy and I don't have to detail here why this is so. It is considered as the official watcher of the whole economy and its policies and even small pronouncents can affect us all ordinary mortals.

However, in many parts of the globe, experts are noticing real crisis of confidence in central banking most especially on what the future holds and how the system can be able to cope with the possible changes brought on by trends happening right now.

Closing closely on the matter, experts are seeing that the the economic models which worked in the past are now showing some signs of failures leading to doubts as to whether they still fully understand the effects of interest rates as the most popular tool in controlling the economy and other monetary policies affecting the people.

Can it be said that right now we need a better platform in place of central banks, which can be more adept and truly reflective of the problems which ordinary people encounter in real life?