Changes in currency tails comprised of the euro, US dollar, and Canadian dollar and currencies out of the Eastern Caribbean, Dominican Republic, Haiti, and Jamaica remained relatively flat over the last 24 hours. Any tightening of rates on the part of major central banks is expected to have a significant impact on Caribbean currencies thus the purchasing power and cost of remittances sent back to the Caribbean.
I think a currency should reflect the reality of the relationship between two distinct political economies that reside under a single flag. I am specifically concerned with two groups under the American flag: Afro-America and the Virgin Islands of the United States. Neither group have been fully incorporated into the American political economy. There is only a 47-year difference between their starting attempts at incorporation into the United States with Afro Americans, at least on the surface, holding a lead in political-economic corporation due primarily to their physical presence in the contiguous United States, their 43 million population, and thus greater access to political channels.
Both Virgin Islanders and the Afro-American community have disproportionately higher poverty rates, lower incomes, and higher unemployment rates than their white American counterparts. Both communities suffer from a dearth of capital and lack productive capacity, for now, through which they could independently sustain themselves. Their banking markets are, like the rest of the United States, subject to the Federal Reserve, and the lip service of the Fed’s community development initiatives and the Community Reinvestment Act of 1977.
A priori, neither community draws the attention of family offices, hedge funds, investment banks, or individual trading desks in search of margin that supports any trade, including foreign exchange. This is due primarily to both communities not having sufficient pooled natural and human resources upon which a currency (value or “energy”) can be calculated and leveraged.
Then again, under a credit creation theory of banking, this may not matter where credit, money, margin, are created out of thin air … but more on that at some other time.
In the mean-time I thought it would be interesting to add two proxy foreign exchange rates reflecting the currency of the Virgin Island (USVI) and Afro-American (AfAM) communities. It is my endeavor, amongst too many others, to develop them in the near future …
A few years ago, I saw a number of Black Americans on Facebook touting bitcoin as the path to wealth. What bothered me that in all the hype being expressed that there was nary a discussion on what currency actual meant. No discussion as to the economics. No discussion as to the political-economic philosophy that undergirds a currency. 2017 saw the bitcoin bubble burst and the chit chat by those same Black Americans faded away like the unrealized gains they promoted.
Bitcoin and other cryptocurrencies have been touted by some proponents as the way to introduce underbanked or unbanked minorities into the credit system. Some Black Americans may have bought into this although the leading Black advocate organizations i.e. National Urban League, NAACP, Color of Change, Multicultural Media, Telecom, and Internet Council, to name a few, have been relatively silent on the benefits of crypto as a banking and payment system. No surprise their since when it comes to technology, Blacks have consistently taken a consumer position versus a producer position. And given that these legacy organizations are lead by the older generation, leadership’s inability to wrap its head around the true underlying economic benefits of cryptocurrency is a direct result of leadership being out of step with technology overall and how technology lies at the core of America’s economic exceptionalism.
In addition to consumerism, Black Americans still emphasize allegiance to the American political economy instead of a more skeptic, independent view of it. Again, its current leadership emphasizes inclusion and diversity as benefits without discussing its costs: that not everyone will benefit from such an approach. A truly inclusive approach to the political economy would be one where Black Americans view themselves not as a community, but as a nation within an American confederation. The advantage of that approach, a national approach, would require that Black Americans re-evaluate the meaning of economic value and the technology or mechanisms for capturing, storing, expressing, and transporting that economic value, particularly in a digital age. Cryptocurrency can be a vehicle for capturing, storing, expressing, and transporting Black economic value.
The upfront work will be the hardest, that being to identify and “mine” that value and quantifying it into a digital asset like cryptocurrency. But by doing so, by tying it to a Black economic engine, Black Americans can provide a blueprint for moving cryptocurrency from merely a speculative commodity to a true currency that can be used in the mainstream to buy and sell any and all goods. Unless crypto can demonstrate its utility in trade, then Nouriel Roubini’s description of cryptocurrency as shit coins will take hold as truly appropriate by most observers. Creating that value means taking a “nationhood” approach. It means connecting all productive assets within Black America to its current banking assets, identifying the economic value within Black America, issuing coin based on that value, ane getting members of its community to buy off on that value.
There are legal and regulatory hurdles, but the biggest hurdle will be cultural and societal. Black Americans will have to take a more courageous approach to Black economic viability and sustainability. The current political-economic structure has failed them and it will be up to Blacks on their own to reimagine the production and distribution of economic value within their communities.