This is going to be an over-simplified explanation of how we've got to this point. Some factors I'm going to ignore or dismiss because I believe they are minor factors. You are free to disagree.

Cross-posted from Real Economics.

I suspect that most people do not understand bitcoin and cryptocurrencies because they also do not understand how money is "created." The reality that money can be created out of nothing is so ludicrously simple that most people simply cannot believe it. John Kenneth Galbraith observed that "The process by which banks create money is so simple that the mind is repelled."

What happens when the banks literally own everything?
No, I'm not asking this as a theoretical exercise. Nor am I being excessively pessimistic.
I'm speaking of a scenario that will happen if current trends continues.

Eight years ago the central banks of the world embarked on a bold experiment. They approached the economic crisis with the assumption that it could be fixed with monetary policy alone. Their primary weapon was quantitative easing (QE).
Now, in 2016, experimental monetary policy has run up against reality. The reason is something simple to understand, and yet hard to believe:

central banks are running out of things to buy.

Chairman Lord Jacob Rothschild of Rothschild Investment Trust recently made an interesting announcement.

Imagine for a moment that some salesman offered you a deal.
They are willing to let you loan them money, and would only charge you a nominal fee plus a small rate of interest for the transaction.

In a sane world your answer would either be either, "Uh, no" or you would laugh in their face, depending on your mood at the time.
Pay to loan money?!? That's insane. Not just insane, illogical.

In a press conference last week, Fed Chair Janet Yellen was asked about negative interest rates. Yellen dismissed the possibility, but also said if "we found ourselves with a weak economy that needed additional stimulus, we would look at all of our available tools, and [a negative rate] would be something that we would evaluate in that kind of context."