The crowd that lives in the cloud

Now that we are fully connected with each other, the role and the viability of the financial institutions is increasingly under siege.

Do we really need them in order to survive?

Election night crowd, Wellington, 1931‘Crowd Funding’ may still exist in the proportion of an experiment, but for the financial industry, it could well be the equivalent of what digital music meant to the record industry!

The governments and the banks have gravitated towards each other in a perverse and enforced dark symbiosis. It is a frantic scramble for survival!

The magic of creating new money and giving it to those who can make it magically disappear.

A few years ago, the governments set out to help by creating money that banks could lend on to businesses to keep the economy going. While it is likely that these actions were founded in good intentions, a number of banks decided to keep all the money to themselves instead so they could fill the holes they had been keeping under cover and pay out bonuses.

When you think of it, banks behave just like little children; they won’t admit any wrongdoing until they have totally run out of options. They simply can not create any doubt because people will withdraw their money en-masse under the slightest suspicion…

The governments have now been taken hostage by the financial institutions. Instead taking any form of decisive action and/or dragging the pin-striped culprits though the streets, our spineless leaders are now throwing our financial security down a bottomless pit.

They prefer to stick their head in the sand or kick the can down the road instead of risking going into history as the ones to blame for the destruction of the economy and possibly society as we know it. But by buying time, they are allowing the demon to grow to unmanageable proportions!

Dire as it may seem, this is not the end of the world – It is rather the beginning of new one.

Now that we are all directly connected, we are seeing new and unprecedented ways of putting the power of taking over to work. A great example is the rise of crowd funding. Just like an army of ants that can overcome any obstacle, together, individuals have demonstrated the ability to by-pass the burning financial institutions when it comes to getting on with business.

Crowd funding is about individuals coming together to support – and directly fund – projects by other individuals and organizations. It can be a powerful engine for job creation and development.

One of the first widely know applications of the concept was that of micro-finance, the same principles have now taken the shape of a group effort to which startups can turn to acquire the financing needed for making their businesses a success.

It is nothing new that our connectivity is gradually getting rid of the intermediaries. Just over a decade ago, banks decided that intermediation (lending money they didn’t have) was the way to go, only to realise today that it is a dead-end….

And even if all the money goes away, we could always go back to barter. Never forget that out of the 7000 odd years of civilisation, organised currency was only widely introduced just over a thousand years ago. If you really think it is impossible to exist with the banks, you should meditate on the fact that they only formally appeared in Italy approximately six hundred years ago…

We did not have had a middle class back then, but then again the people weren’t so powerfully connected with each other as we are today…