Money Without Boundaries

Chapter 10Pillar 4 – Capital Markets as a “Technology”

“In our view, derivatives are financial weapons of mass destruction carrying dangers that, while latent, are potentially lethal.”

– Warren Buffett

We have covered three of the four pillars: the concept of a risk-free rate, money creation under the Credit Theory of Money as a secured claim on another's assets, and blockchain solving the trust gap. Our fourth pillar is the construct and advancement of modern capital markets.

Technologies are not just physical devices. They include intellectual property, business processes, and new ways of doing things. For example, what is the assembly line? It is a new process, a new technology, a new way of doing things. While there are many problems with our financial system, it is an incredible microcosm of advanced technology and new ways of doing things – advanced business processes. These processes enable you to be virtually cashless in your home country and travel the world with a single credit card. They enable a stunningly high percentage of the population to have access to credit for general liquidity, education, homes, and businesses at what are generally remarkably low rates. While it is easy to see advancements in technology (screens get bigger, speeds get faster, more features are added, and prices go lower), advancements in financial services are more nuanced and subtle, but perhaps even more significant in the long term. What do I mean? Very few things are the same today ...