THE FUTURE OF MONEY

I had an unusual Sunday.  Nothing interested me on television, not even the NFL.  Nothing happening in Honolulu worthy of my time.  Nothing being offered at 15 Craigside, but this day usually is reverential, and I'm not much of a churchgoing resident.

I thus went through my subscription magazines, and, in particular, the latest issue of Time, where I ran across the Future of Money, which I will summarize after an initial segue into a film.

After dinner, I watched Hiroshima Mon Amour, (click on that and watch the entire hour and a half production, directed by Alain Resnais) a movie that I vaguely remembered from my college days, but yet, perhaps never had seen.  Released in 1959, it is about the life of two two-day lovers in Hiroshima a few years after the drop of the Atomic Bomb when the city had to some degree recovered.  A French actress (Emmanuel Riva) in town for a film, starts a relationship with a Japanese architect (Eiji Okada).  Both are married, and it became obvious that a long-term relationship was not to be.  

Back then when the film was first available, I was one of the very few Japanese on a white campus, so there was that personal reverse link that gave additional meaning to my interest in the subject.  Of course, Palo Alto was the polar opposite of Hiroshima, for Silicon Valley was ready for formation, while nuclear devastation was still everywhere in the movie.

The movie received 97/89 scores from Rotten Tomatoes.  Here is part of a review from someone named Ivan D:

Sep 12, 2012

Bleak, moody and scarred, "Hiroshima Mon Amour" is a film of uncommon power that treads both the emotional trauma of love and the ravages of war. Amid post-war Hiroshima, the film has maintained a deeply soulful dialogue between two lost people desperately trying to feel, to fall in love overnight, and to understand. But this isn't "Before Sunrise" here. "Hiroshima Mon Amour" is just one of those legendary films whose allure can never be easily diminished.

Now, on to the Future of Money from the November 1, 2021 issue of TIME, by Jacob Goldstein, who wrote Money:  The True Story of a Made-Up Thing.

• The evolution of money began with Greek metal coins, circa 650 BC.
• China invented paper, and, thus paper money, around AD 1000.
• Around the time of the Civil War, the U.S. introduced banknotes which could be redeemed for gold or silver.
• Spurred by the Great Depression, President FDR took the U.S. off the gold standard. 

• 
  The country and world recovered, and the nature of money not being linked to anything real became the norm.
• So in 1950 Diners Club launched the first credit card.
• The U.S. has fallen behind the times, for in some countries like South Korea, coins and bills are not used anymore.  In 2023 Sweden will become the first cashless society.

• 

  But returning to the evolution of money, in the 1970's came money-market mutual funds, sort of like a safe bank account providing higher interest returns.

• 
  The danger is that nothing is guaranteed, and in 2008 these funds bankrupted Lehman Brothers, and the world economy collapsed.
• I survived for I had never had much invested in stocks, but had secured a safe haven that I threw into the market soon after the crash.  I plan to do this again at the next fiscal crisis.

• 
  So 12 years ago came the Bitcoin.  Is cryptocurrency the future of money?  The value of one bitcoin from 2009 to 2019:

• But since a price of 3201 at the end of 2018, the bitcoin hit a high of 66,136 (actually 67,000 according to this source) on 21October 2021, and is today at 62,725:

• From Forbes:

Now, a panel of 50 bitcoin and cryptocurrency experts has predicted the bitcoin price will continue to climb through 2021, hitting highs of around $80,000, before surging to $250,000 by 2025 and a staggering $5 million per bitcoin by 2030.

• Yet:  The pop has been fueled by renewed hopes that regulators in the United States would not crack down on cryptocurrencies, support from big investors such as George Soros and the launch of the first exchange-traded fund tied to bitcoin futures.

So is the cryptocurrency the future of money?  Here is an article from The Council of Foreign Affairs that sort of makes sense.  In addition to Bitcoins, consider:

• Stablecoins.
• DeFi, or decentralized finance (think Ethereum blockchain).
• Unregulated finance.
• The matter of illicit activities.
• Terrorism evasion.
• Environmental harms:  yes, the cryptocurrency network is an energy-intensive process.
• Banks are returning into the fray and have proposed central bank digital currency.
• Then there are countries like Sweden, and, particularly El Salvador.

Which leads to a follow-up article in the same TIME issue:  What El Salvador Gets from Betting on Crypto:

• In Wikipedia, the country leads the world in fire-arm deaths/100,000 at 66.6.  USA?  Only 4.5.  Japan?  0.02.
• The prime mover of cryptocurrency is 41-year old President Nayib Bukele Ortez.
• Paternal grandparents were Palestinian Christians from Jerusalem and Bethlehem.
• Maternal granparents were Catholic and Greek Orthodox.
• Father converted to Islam and became an imam.
• Began law school, but quit to found a company at the age of 18.
• Elected Mayor at the age of 31.
• Gangs are dominant, and in a more humane way than Rodrigo Duterte in the Philippines, Bukele might have struck a deal with gang leaders to reduce homicides, which has dropped from 67 to 20/100,000.
• Is showing signs of becoming a dictator, but his approval rating is 85%.  His Twitter bio says "coolest dictator in the world."
• 
  A small village, El Zonte, known as Bitcoin beach, is creating a Salvadoran Dream by leading the way with this cryptocurrency.
• Read that article for the details.

Finally, that TIME issue delves into nonfungible tokens (NFT).  Earlier this year I covered this topic, so read it to get a sense of how the art world might be creating a pathway for the future of money.

I will conclude this posting with the lead story of this article about how Monica Rizzoli in Sao Paulo became a millionaire, watching how in 48 minutes, her 1,024-piece art collection earned $5.4 million in a NFT virtual auction.  To the left is one of her creations.

I'll end with a message from Planet Earth:

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