Bienvenidos mis ositos, tu siempre eres mis queridos! (Welcome back little bears you are always my dears!)
I slowly trudged into my cubicle feeling defeated and dejected. Normally people would have already finished their morning briefings. Dark thoughts entered my mind. Did my company go under also? Earlier in the year Bear Stearns collapsed. Then Lehman Brothers went bankrupt in mid September 2008.
Eventually other colleagues sauntered in with a zombified look on their faces. Most of us were not sure if we even had a job. Over the coming weeks I would watch my coworkers carry with them the dreaded brown box. By some miracle I was able to cling to my job for a few more years.
However despite years of dedicated service it was my turn to experience the indignities of the unemployment line. This cycle of working hard and then getting laid off continued for almost another decade.
It took a toll on my emotional and physical health. What did I have to show for it? Fiat that keeps losing purchasing power every year.
That my friends is the definition of a bad trade.
I wouldn’t be surprised if this happened to millions of other well-meaning people over the years. But why is this happening? The current power structure is corrupt, aided and abetted by their TradFi allies.
Now I’m not sure if DeFi can fully return power to the people but it can sure as hell siphon away precious capital from TradFi.
If you look back at prior speculative financial fiascos like the 2000 Internet bubble, the 2008 housing bubble, and the 2020 covid crash you’ll notice something strange.
Lack of accountability!!! Forget about jail, people that cause or exacerbate financial crises don’t even lose their jobs. Sometimes they even get richer!
One of the issues with TradFi is the lack of REAL ownership. When we deposit our hard earned paychecks into a TradFi bank, that money technically isn’t ours. In an undercapitalized, fractional reserve system savers are NOT rewarded.
In fact in the current TradFi system, most of us get NOTHING (some even get charged for depositing!) for risking our money in a bank deposit. Then we get punished again by losing our purchasing power through inflation.
You can almost see the desperation in financial markets now. Most bonds are close to or trading above par value. Most stocks are ridiculously expensive. The SPY ETF has a dividend yield of 1.3%. Is it any wonder people are willing to ape into risky plays?
Then the people in power with their talking head puppets have the nerve to call us “Degens”. What did they expect? Who put us in this dire position?
The powers that be are crafty. Every once in a while they will remind us of the illusion of safety that they offer. FDIC allegedly offers UP TO $250,000 in deposit protection and the SIPC supposedly protects up to $500,000 in investment protection.
During the last crisis people had to jump through hoops to try to recover their original deposits. How are people supposed to eat when their money is tied up in courts or other bureaucratic systems.
Have people forgotten about Bernie Madoff and Jon Corzine, Wachovia etc? Madoff was chairman of the NASDAQ at one point! Jon Corzine was a Goldman Sachs bigwig and head of MF Global when it was run into the ground!
https://www.vanityfair.com/news/business/2012/02/jon-corzine-201202
Wachovia was a top 5 bank before it was absorbed by Wells Fargo (not exactly a group of saints).
Do I need to give more examples of the revolving door between people with money and power?
I think you get the point. The current system rewards bad behavior. People that already have a significant amount of assets can make reckless decisions that crush those that create, work and save.
When markets go up they benefit, when they lose they get bailed out (and sometimes STILL make money!)
What can be done?
We need to start educating ourselves on the DeFi risks and opportunities out there AND more importantly TAKE ACTION!
In 2010 someone sent me an article about this crazy thing called Bitcoin. I thought it was interesting concept but then forgot about it.
In 2013 I read another research report that made the case for owning some Bitcoin in your portfolio. Again it sounded interesting but all I did was create an online wallet.
In late 2015/ early 2016 I vaguely remember watching a Bootstrapping in America interview with a then unknown Vitalik Buterin. He sounded like a smart kid but AGAIN I did nothing.
It wasn’t until 2017 when I finally got off my fat @$$ and started really learning and getting my paws dirty.
What can I say? I’m a slow learner.
DeFi might be the last bastion of real capitalism left. It’s high time we start shifting our hard earned money into DeFi protocols that rewards savers and smart calculated risk taking. There will be a rough road ahead.
There will be exit scams, rug pulls, and trash projects. But in DeFi there are no bailouts for scumbags here. A nice brutal bear market will annihilate time wasting projects. The projects that survive will thrive.
Brothers and sisters, it’s time to roll up our sleeves and look for the good stuff together in DeFi land.
If there ever was a hill to die on this would be it.
Be sharp, stay hungry let’s get that money!
