Or rather: is it born from a thinking mind of Greek origin? The denial of real money, or Fiat, emerges as a phenomenon that shakes the foundations of the traditional economic system, marking the end of faith in the real value of money.
This concept, coined by Greek-born American economist Demetri Kofinas, reflects a growing distrust in the functioning of the market and the stability of monetary value.
Financial skepticism: The crisis of confidence that redefines the value of money in the modern era
The concept of financial skepticism explores how growing distrust in traditional financial institutions and monetary systems is leading to a reappraisal of the value of money.
It suggests that we are in a period of transition where trust, the cornerstone of financial systems, is being questioned, leading to a search for alternatives and a redefinition of how we perceive and value money in today’s society.
Origins and causes
The 2008 financial crisis acted as a major catalyst for this trend. Measures taken during that period, including bank bailouts and massive money printing, created a perception of injustice among the population.
These actions dismantled what Kofinas calls the “mythology of money,” exposing the fragility of its intrinsic value and its dependence on government trust and policies.
Financial nihilism finds fertile ground mainly among young people aged 20 to 35. Witnessing recurring economic crises and growing inequalities, this generation questions the validity of conventional financial strategies and seeks alternatives, often risky, to achieve economic stability.
From mid-2007 to mid-2009, the SP500, the most representative index of the traditional financial economy, suffered a significant fall, reflecting the economic collapse caused by the subprime mortgage crisis (2008).
And as the reader will have noticed, the initial date (2008) is exactly the same year, at the end of this year, when Satoshi Nakamoto gave birth to the first Cryptocurrency, Bitcoin.
Manifestations of financial skepticism
Speculative investments
Adherents of this philosophy tend to prioritize short-term gains over sustained long-term growth. This mentality translates into a move away from stable and conservative investments in favor of more volatile and speculative options.
Cryptocurrencies as a vehicle
Cryptocurrencies have played a crucial role in spreading financial skepticism.
Initially conceived as an alternative, decentralized monetary system, these digital currencies attracted idealists seeking to escape the manipulations of governments and financial institutions.
However, the rise of ICOs (Initial Coin Offerings) in 2017 transformed the landscape, turning cryptocurrencies into fertile ground for speculation and risk… or, put another way, when they began to be traded against other conventional assets or currencies.
Rejection of conventional financial wisdom
Traditional financial denial questions the usefulness of conventional financial practices such as saving for retirement or investing in the stock market. This attitude stems from the perception that the financial system has no real meaning and that financial planning is useless in the face of market unpredictability.
Economic implications
The rise of financial nihilism has several consequences for the global economy:
Market volatility
The popularity of speculative investments, driven by social media trends rather than economic fundamentals, can lead to increased volatility in markets. Prices of assets such as cryptocurrencies and trending stocks can experience drastic fluctuations, destabilizing markets.
Exacerbation of economic inequality
The pursuit of quick profits through high-risk investments can widen the gap between the lucky ones who make substantial gains and those who suffer significant losses.
Erosion of institutional trust
Skepticism towards traditional financial institutions is growing as more people adopt a nihilistic view of finance. This trend may lead to greater reliance on alternative financial advice and investment strategies driven by online communities.
Perspectives and challenges
Conventional financial denial poses significant challenges to the global economic system. Loss of faith in the real value of money and traditional market mechanisms can undermine long-term financial stability.
Regulators and financial institutions face the challenge of restoring trust in the system. This will require greater transparency, fairness in economic policies and efforts to address systemic inequalities that fuel discontent.
On the other hand, financial skepticism can also be seen as an opportunity to rethink and reform the financial system. Young people’s search for alternatives could drive innovations that make the system more inclusive and resilient.
In short, financial skepticism represented and represents a significant change in the perception of the value of money and the functioning of the market. This phenomenon, rooted in disillusionment with the traditional financial system, challenges established economic paradigms and raises questions about the future of global finance.
As the debate over its implications continues, it is clear that financial nihilism has left an indelible mark on the economic landscape. How society responds to this challenge will largely determine the evolution of the financial system in the coming decades.
And someone might ask, at this point, was Demetri Kofinas the real ideologist of cryptocurrencies or was it just a coincidence of the date? It is clear that Bitcoin was not made in months, so Satoshi Nakamoto would have started developing it some time before 2008: it was just a demand that was clamored for at that time (2007-2009) and both visions coincided at approximately the same time.
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