Friday, November 15, 2013

The World Largest Economy in 2020 (Not the US or China)

OECD expect that two-thirds of the world's workers will work more or less in this economy.

If aggregated, the $10 trillion global black market is the world’s second largest economy after the United States and it is also the world’s fastest growing economy. The OECD (Organisation for Economic Co-operation and Development) projects that, by the year 2020, fully two-thirds of the world’s workers will inhabit this shadow economy, or “System D.”

 Bitcoin - the emerging currency of  "System D"
However, underground may not be so bad anymore as Robert Neuwirth points out in his brilliant Foreign Policy article, “The Shadow Superpower”. As Neuwirth elaborates, it refers to the entire untaxed, unlicensed, and unregulated cash-based economy: 

Image courtesy of Ghat Wikipedia

System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of “l’economie de la débrouillardise.” Or, sweetened for street use, “Systeme D.” This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy."

All kind of vibrant economic activity is occurring in this informal economy, which in some regions is between 20-60% of GDP or more, and every economy needs a currency.

Essentially, bitcoin is the ‘System D’ of currencies — global, decentralized, and non-state sanctioned.

It is still early days but as bitcoin bypasses traditional banking and financial institutions, it is a currency off the grid just as System D. To deny the existence of System D is to deny the fact that economic participants find ways to survive even during prolonged times of hardship. According to Neuwirth;

“it asserts an important truth: what happens in all the unregistered markets and roadside kiosks of the world is not simply haphazard. It is a product of intelligence, resilience, self-organization and group solidarity.”

Learn more about Bitcoin at Tax & Money Havens. Learn more about System D in the report "Shadow Economies All over the World" at elliottwavetechnician.com Economic Research page.

Geir Solem

Elliott Wave Technician
Copyright (C) all rights reserved