Artqol

The value of any currency, whether a commodity or a fiat currency, is only relative to what people think it's worth.

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In 2008, the financial system was on the brink of collapse. Central banks around the world took a Keynesian approach by inflating the money supply, also known as Quantitative Easing (QE), which is basically the printing of money. In response to the recent economic shock caused by the COVID-19 crisis central banks have announced multi-trillion QE programs without an end date. All this printing of money has created a global economic reality of income inequality.

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As stock markets soared, wages stagnated, and with cheap money on the table, the only people that could take advantage were the rich. While overall wealth increased, it did not benefit the lower-middle class.

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Since the 1930s the world has shifted from a gold standard to a Fiat monetary system. A fiat currency's value is underpinned by the strength of the government that issues it, not its worth in gold or silver. In recent years we saw the emergence of Cryptocurrencies, primarily Bitcoin, a cryptocurrency that is a decentralized digital currency without a central bank that can be sent from user to user on the bitcoin network powered by blockchain technology.

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Another type of currency to be considered is art. Art products are increasingly used by the rich as a hedge against currency fluctuations. In that context, Christo left us in June this year. He was not only a unique artist whose works impressed with their scale and with the fact that they were difficult to fit into the generally accepted notions of contemporary art but he was the only artist on the world’s art scene who financed his projects entirely on his own - without any sponsorship, donations or use of public funds.

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Each of his major projects was accompanied by numerous drawings and sketches. They were sold on the market and then the amounts were used to finance the final work of art. In this way Christo and Jeanne-Claude created their own economy where a single drawing was turned into a financial instrument, into a "stock" with its own unique value to be used later to create something new.

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In his book The Changing World Order, Ray Dalio goes into detail describing the long-term cycle of money. Making the point that these events of increase in the money supply and interest rates set at the zero bound have happened many times before throughout history. The last crisis could mark the last phase of the fiat system and the decline of the US dollar as the world reserve currency with a return to hard money.

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Will that money be gold? Or perhaps it will be a cryptocurrency? What would the world look like post fiat money? How will art be traded? What would be the impact on social and economic inequality?

 

Artists are invited to present a work that can try to communicate an answer or at least raise awareness on the topic.