The Phantom Value Crisis: Why There's More Money Than Real Assets in Today's Economy
Autor: Ondřej, 17.03.2025Modern financial systems face a fundamental imbalance: there is more money circulating globally than actual assets backing it. Since abandoning the gold standard, our monetary system has increasingly operated on trust rather than tangible value. This article examines how this disconnect affects everyday citizens through inflation, eroding savings, and declining purchasing power. We explore why this system is unsustainable and how FONTESIN's asset tokenization approach aims to reconnect currency with real value. By creating digital tokens directly tied to tangible assets, we're building a bridge between traditional finance and a more stable economic future—combining technological efficiency with the security of asset-backed value exchange.
In today's interconnected global economy, we face an unprecedented situation: there is significantly more money in circulation than actual assets to back it. This imbalance, which began with the abandonment of the gold standard, has created a financial system built more on trust than tangible value.
The Great Disconnect: How Money Lost Its Anchor
When countries worldwide moved away from the gold standard in the 20th century, they fundamentally changed the nature of money. Previously, currency had intrinsic value because each unit represented a fixed amount of gold. Today's fiat currencies derive their value solely from government authority and public trust.
This shift has enabled unprecedented economic flexibility but at a significant cost. Without physical assets backing our money, we've created a system where value can be manufactured through policy decisions rather than productive activity.
The Debt-Driven Economy: A House of Cards?
Modern economies function almost entirely on debt. The world's largest economic powers—the United States, China, and Japan—have accumulated national debts in the trillions. While this approach has facilitated economic growth and stability in the short term, the long-term sustainability remains questionable.
Consider this sobering reality: when governments need more money, they simply create it. This continuous expansion of the money supply without corresponding growth in actual assets inevitably leads to currency devaluation and inflation.
The Inflation Cycle: How Money Creation Erodes Your Wealth
When new money enters the economy without an increase in productivity or real assets, each unit of currency represents a smaller portion of the total available goods and services. This fundamental economic principle explains why your purchasing power declines over time.
The consequences are felt by everyone: savers watch their capital slowly erode, workers find their wages buy less each year, and societies face growing economic inequality as those with assets benefit from inflation while those without suffer its effects.
The FONTESIN Perspective: Reconnecting Value to Reality
At FONTESIN, we believe this disconnection between money and real assets represents both a challenge and an opportunity. Our tokenization approach aims to rebuild the crucial link between currency and actual value by creating digital units directly tied to tangible assets.
In our next article, we'll explore why cryptocurrencies, despite their revolutionary potential, have largely failed to solve this problem and how proper asset tokenization offers a more sustainable path forward.
Stay tuned to learn how the FONTESIN platform is creating a new paradigm for value exchange in the digital age—one that combines the efficiency of modern technology with the stability of asset-backed currencies.