Dad Joseph Ratzinger he defined finance as a bridge between today and tomorrow. Never has a better description explained in normal times how it can put itself at the service of the real economy, which is today and also tomorrow. But this scenario can also be valid today with the growing strength of the digital power of platforms and Artificial Intelligence and with the wars that inflame the world?
This is a fundamental question, at a time when finance in the richest country in the world, the United States, is worth more than four times its GDP, or the real wealth produced by Americans.
Another Pontiff tried to give an initial answer a few days ago, proving that now in the world of central banks and multinational funds the community of those who believe in the otherworldly also has a voice and perspective. Pope Bergoglio at the G7 in Borgo Egnazia he issued a clear warning: Artificial Intelligence is not only dangerous because it can control finance but because it can push the red button of nuclear conflict.
«Allow me to insist precisely on this issue: in a drama like that of armed conflicts it is urgent to rethink the development and use of devices such as the so-called “lethal autonomous weapons” to ban its use, starting already with an active and concrete commitment to introduce ever greater and significant human control. No machine should ever choose whether to take the life of a human being,” Pope Francis said.
50 years of Consob supervision
If technology scares those who deal with souls too much, we need to understand what the person who supervises their wallet thinks about it. Therefore, shifting attention from the world to our stock market, it is interesting to read the pages of the report by the president of Consob.
Paolo Savonain his speech to the market for the 50th anniversary of the Supervisory Commission, used similar tones regarding financial machines, which today are called cryptocurrencies. They must not dominate man but vice versa.
For Savona, who spoke in the hall of Palazzo Mezzanotte in Piazza Affari in front of the Governor of the Bank of Italy Fabio Panetta and other personalities from the financial and political world, we are faced in this short decade with a transformation of finance which “from being a handmaiden of real development” is becoming a “creator of movable wealth by parthenogenesis”.
The risk of finance divorced from the real economy
In practice, finance feeds itself without logic and construct and also replaces the democratic mechanisms of free investment choices.
There artificial financeas we could call it, moves close to but not within the basin which only has the value of in the USA 110 trillion dollars (6 trillion in Italy)which are the value of regulated financial wealth, much greater than the American GDP (25 trillion dollars) and pushes to be combined with the traditional one by virtue of the use that people make of it and not to comply with the law. Once this barrier breaks, it will be difficult to preserve savings from this threat that knows no rules and does not answer to any government or parliament.
And the reason is well explained in the pages of the speech of the number one of the Stock Exchange Commission, who in 1974 was tasked by Ugo La Malfa and Guido Carli with launching Consob.
Savona writes: «The aspect of this latest metamorphosis is the dizzying growth of cryptocurrency. In principle it is not possible to understand how the existence of can be legitimized dematerialized assets originally devoid of debt counterparties, which arise from a mathematically refined “artisanal” enterprise and live through agreements between private individuals without controls on governance”.
Furthermore, these assets, which will one day have to contend with the ECB’s projects on the digital euro, create purchasing power on the market «which has an increasing value compared to that generated by productive activity, altering the distribution of income and wealth, the determination of which would be the task of the bodies of democracy in the acquired awareness that the market does not have the practical conformation, nor the task to do so”.
It is important to report this passage from the market guardian’s report in full to understand how in an unregulated world it is important to give rules to financial investments that risk affecting even what is subject to the rules, creating a dangerous short circuit.
Learning from the past
The past experience after the failure of Lehman Brothers it should have taught something. Should. «Even for derivatives, at the origin of the 2008 crisis, the correct accounting above the total line, i.e. with a debt counterparty, was neglected for a long time, which for a long time was replaced by a reminder below the line between the commitment accounts and risks.” We all know well how it ended: financial crisis, crisis of the real economy, recession, austerity.
Does the world, Europe and Italy with them, want to take another risk of this kind, allowing those who gamble with their creditors, without being indebted to them, to use their great private wealth? The answer is in the regulation, in a new one Bretton Woods of the currency, which should encompass all its different entities, including bank deposits, to concentrate the wealth of the world under the control of a single supervisor and free up resources for the bloodless state coffers. Is it an easy task? Obviously not, Savona replies, which also appears several times on the pages of Milan Finance he proved to be the most lucid in examining the evolution of finance.
But this does not mean we must remain inactive, especially when a house for savings is being built, which must place itself more at the service of the real economy and when a safe path towards the stock market must be traced for it, which is suffering again due to too many delistings, the result of competition from easy crypto earnings but also from complex rules that facilitate private equity raising.
It is not an easy world in which the man who can choose between a BTP and a financial product created by mathematics that promises record earnings lives, but for this very reason it is necessary to provide him with the right information to make the right choices. And it must be done immediately, as he warned Soren Kierkegaardnot by chance quoted at the bottom of the report: «There comes a time for man when he no longer has freedom of choice, not because he has chosen, but because he has not done so and others have chosen for him».
Otherwise, without this choice, we risk the schism of artificial finance from regulated finance, of the digital world from the real one, a rift that can devastate the planet of money and beyond. The inertia on earth that grinds more calculations than grain no longer pays. (All rights reserved)
MF – Number 125 pages. 3 of 06/26/2024
 and that still unheeded warning: beware of the schism of crypto and artificial finance from the economy){kind=link}