Mushrooms in the monetary system

The definition of money can span several economy books or degrees. It can lead to economic and social disputes. Indeed, Austrian economists always said that “when money dies, people die”.

The essence of monetary asset find its roots in being a means of exchange and store of value. In the last decade the attention on money as a social instrument of economic progress is back into the spotlight. Not only from economic and political centralized systems managers and regulators, understood as institutional entities born from the socio-economic evolution of XX and XXI century, but also as privates, small investors, speculators, meant in a good way.

This interest, in a bottom-up logic, of the monetary asset is becaming, year by year, something more than a simple pursuit of freedom. It has an essence that someone tried to defined as “fungical”. Mushrooms have the necessary task of knocking down depleted organisms, bringing them to death, recycle their nutrients for stronger organisms.

In the last centuries, not years, but centuries (eg. think about the definition of “dutch finance”: the first stock exchange was born in XVII century), our financial systems have brought enormous benefits to humanity. The socio-economic evolution, especially after world war II, has made a network of systems that are moving away from their original goal of make commerce, the exchange of value and investments into real economy, easier. Trillions of paper dollars created “ex nihilo”, especially after 1971, have created a castle that serves less and less a human economic progress and general welfare improvement. In particular, this is now a strong tool of legit usurpation of purchasing power by those who are the main beneficiaries of liquidity injections versus those who are very distant from this clientelist mechanism.

This system, backed by welfare state systems which depend on financial markets for funding, creates enormous inequalities and business problems. This system creates a cap to potential economic growth which could be freed by entrepreneurial ideas no more forced to live in a coercitiv world created by pervasive welfare state.

Definitively this model has created inefficient organism of wealth allocation and, above all, a centralized redistribution mechanism that is showing its limit in the capacity to generate wealth, in the sense of a balanced economic progress. These organisms and monetary systems are strongly weakened, otherwise it would not be necessary to pump trillions of dollars in few months to reduce financial stresses that were making an impact on the system, even before COVID-19; see REPO market stress at the end of 2019.

Until now these systems permeated by weakened organisms have tried to fight the fungical power of alternative monetary assets class. But mushrooms grow up in the dark and these big and very strong mushrooms evolved becaming even more stronger. A non-competitive force between mushrooms, but force to offer a natural solutions to a monetary organism at its end. These mushrooms, some with thousands of years of history, some with less then 2 decades of history, have evolved for a unique goal: find the weak spots of monetary system and bring its components to a more natural and balanced state. These mushrooms are GOLD and BITCOIN that live in symbiosis and not in competion.


Giacomo Andreoli – CEO @ Confinvest.it