The scenario we will face in 2022 can be scary. But we in the 11Onze community are preparing for it. We talk to 11Onze’s chairman James Sène about national indebtedness, the possible collapse of the international financial system and superinflation. How will we get out of this? 2022 will be our touchstone.

The scenario in Europe is bleak. The European Central Bank (ECB) has been warning for months about the excess debt accumulated by traditional banks in declining energy companies. In a new episode of the podcast Ens Interessa, the president of 11Onze, James Sène, analyses the international economic context, in conversation with content director Toni Mata. And Sène is categorical: “If the ECB is so clear, things are much worse than they want us to believe. There are a series of geopolitical circumstances and a crisis in the international monetary and financial system that are causing the perfect storm.”

However, the economic consequences of all this, Sène warns, will not come overnight, but will accumulate, if we do not remedy them, until we reach a situation of collapse. This explains why, in practice, traditional banks are already in a situation of bankruptcy, but are still being sustained by the inertia of the ECB, which has not stopped printing money and offering pandemic aid. 

“The ECB has wanted to plug the hole so much that we have printed too many banknotes, and we are entering a phase of superinflation, with values of 7% to 10%. This means that the money saved is worth 10% less,” the president of 11Onze argues. On top of all this, there are stagnant financial structures. “And we are all paying the consequences: sky-high interest rates, fees for everything, reductions in customer service staff, a service that is getting worse and worse. It’s a death foretold,” Sène says.

The United States on the brink

On the other side of the Atlantic, things are no better. The United States is, as the president of 11Onze admits, in a very difficult situation. “With debt absolutely off the charts, inflation reported at 7.8% last quarter, this means it’s probably worse. The US economy now represents 24% of the world economy, the lowest percentage in its history,” he sums up. This is causing the dollar to lose more and more of its value and, in turn, the purchasing power of citizens.

“The consequences will be radical and very important for us, without a doubt. The United States will have to defend its economy, and the measures it takes are likely to leave many people in the lurch,” Sène argues. American debt is also the debt of Europe, Japan and other economies of the capitalist West.

“Companies are often blamed for the crisis, but the reality is that it is the states that are bankrupt. They have no money, and they are increasing the fiscal pressure on citizens. This debt has been caused by their inability to manage everyone’s resources,” Sène says. And he exemplifies this with the pension system currently in force in Spain, which is close to bankruptcy. “Every year, the Mercer CFA Institute Global Pension Index rates the pensions of 43 countries and, in Europe, in 2021, Spain is third from the bottom. They calculate that pensions have a 28 out of 100 chance of lasting. We are paying more than we can afford,” Sène explains.

Options for weathering the crisis

Let’s look for solutions. The crisis seems inevitable because there is too much accumulated debt. What can we do as citizens to avoid the impact of this crisis as much as possible? We need to educate ourselves financially and be able to manage our resources responsibly. “We have to start opening our eyes and learn how to manage our money. We cannot correct this global mistake, because it is in the hands of governments, but, individually, we have to try to generate value with the money we have, which is greater than the decrease produced by inflation or the CPI…,” the chairman of 11Onze defends.

And this, it is clear, cannot be done with savings in current accounts, without doing anything. “In Spain, 40% of people have their money saved in current accounts. We don’t understand what’s happening,” Sène warns. That’s why, above all, the money must be kept in financial institutions that protect their clients: in 11Onze, the money in the accounts is off the company’s balance sheet. Even if the depository financial institution were to go bankrupt, the clients’ money would not suffer. It cannot be touched, it is 100% guaranteed with no limit to the amount. “It’s like a safe, you can’t lose it in any way,” Sène says.

Secondly, savings should be kept in deposits that give a minimum return. And thirdly, a small part of these savings should be invested, without putting our assets at risk, whether in real estate, precious metals, cryptocurrencies or ETF packages. “That we can at least generate what we are losing. This year, for example, gold has returned 25%, and silver 70%,” he says. The idea is, at the very least, to correct the devaluation of salaries caused by inflation.

“It’s not about being a broker and reading twenty investment panels at the same time. That’s a nightmare. We have to look for products that we understand,” Sène encourages. In fact, 11Onze has set out to educate, in La Plaça and with its superapp, El Canut, so that anyone, whatever their age, can move their savings without running any risk. 

So: yes, all indicators point to 2022 being the year we will see one of the biggest economic crises in history. But we have the opportunity to prepare ourselves as a community to find ways around the bumps. At 11Onze, we are working to make it happen.

11Onze is becoming a phenomenon as the first Fintech community in Catalonia. Now, it releases the first version of El Canut, the super app of 11Onze, for Android and Apple. El Canut, the first universal account can be opened in Catalan territory.