If you follow my work, I have been speaking about the upcoming recession. Central banks are out of tools and cannot admit their policies were wrong. We did not solve the 2008 crisis, we just papered over the debt problem with more debt.
Central Banks will be cutting rates more extensively than before but need to do it in a way to maintain the confidence. It is also very likely QE will be re-initiated... even though we were told it was a one time desperate policy to prevent another 1930-40's type great depression.
I have spoken about the recession signs many times and why this time it will be much worse. Links below.
I have spoken about why Gold will be performing well. It is a confidence crisis asset and we will be seeing a confidence crisis in government, banks and the fiat money. Human history is cycles of fiat/soft money and hard money. No fiat has ever survived (average lifespan is 40 years).
Other recession signs are what we are seeing with Copper (link below), negative PMI data, and the yield curve. I want to address the 2 and 10 year yield.
The 2 and 10 year yields are about to invert. The media has been downplaying the yield curve inversion because the 2 and 10 have not inverted...once they do, there is no hiding it. When I was trading today, the spread was 8. We got up to 5 and then closed around 6.
Why is this important? Because the 2 and 10 year inversion have a 100% success rate in calling market crashes, recessions and depressions. Now I am not saying the markets will crash right away, but we do cross a threshold. You can see people are very uncertain and are running into bonds for safety.
Also look at the 30 year yield lol. It is almost yielding the lowest ever in history...and yielding more than the fed funds (overnight lending) rate.
Now the big question is how will Bitcoin perform? This will be the first time Bitcoin will be tested during a recession. Although, keep in mind, I believe what is coming will be far worse. It will be a confidence crisis since central banks are out of options. Japan and Europe are the best case examples. We go negative interest rates and stagflate/deflate. Effectively killing the bond markets where central banks are the only buyers of negative yielding debt. Banks will have negative interest rates, and we will very likely go to a national/international digital currency to prevent people from pulling money out of banks since they have to pay banks for keeping money in them with negative interest rates.
A digital currency ensures we are forced to keep money in banks so they get paid, and also for other reasons such as taxation in case we go the MMT path. Again I have outlined this many times in previous posts.
So back to Bitcoin. It is a great way to hide money or transfer money. The Chinese have been using it with great effectiveness basically creating the rise in Bitcoin. I don't think they are holding it as a storage of value however...more of an in between mechanism for transferring money or getting it out of the country. Remember, buying physical Gold does not really affect the prices...it is the paper market that does (hence why it is likely China and Russia have put large short gold paper contracts to keep prices low while they stockpiled physical at depressed prices).
Again, I believe cryptos will do well (specifically Bitcoin) because of the fiat crisis. With central banks cutting rates, there is a race to the bottom to see which country can cut the fastest. Check out my post on why the US will attempt to do so but the US Dollar may rise...thereby forcing the Fed to 'kill' the dollar. The middle class/main street will lose. Government will win. Wall street will win.
Very bullish on the precious metal complex due to the confidence crisis but also saying Bitcoin will see money run into it. Then it is all about government fighting Bitcoin. Trust me, we have not even seen an effort made by government to attempt to take down bitcoin. They can never shut it down, but can make it illegal which would see the average joe crypto trader/investor sell their positions due to fear of punishment from the government.
Also another word of caution: If Bitcoin hits 50k it may be tough taking profits...most of these crypto exchanges will not have the money. Since they are not regulated they do not need too. You do not have depositer insurance.
Central Banks will be cutting rates more extensively than before but need to do it in a way to maintain the confidence. It is also very likely QE will be re-initiated... even though we were told it was a one time desperate policy to prevent another 1930-40's type great depression.
I have spoken about the recession signs many times and why this time it will be much worse. Links below.
I have spoken about why Gold will be performing well. It is a confidence crisis asset and we will be seeing a confidence crisis in government, banks and the fiat money. Human history is cycles of fiat/soft money and hard money. No fiat has ever survived (average lifespan is 40 years).
Other recession signs are what we are seeing with Copper (link below), negative PMI data, and the yield curve. I want to address the 2 and 10 year yield.
The 2 and 10 year yields are about to invert. The media has been downplaying the yield curve inversion because the 2 and 10 have not inverted...once they do, there is no hiding it. When I was trading today, the spread was 8. We got up to 5 and then closed around 6.
Why is this important? Because the 2 and 10 year inversion have a 100% success rate in calling market crashes, recessions and depressions. Now I am not saying the markets will crash right away, but we do cross a threshold. You can see people are very uncertain and are running into bonds for safety.
Also look at the 30 year yield lol. It is almost yielding the lowest ever in history...and yielding more than the fed funds (overnight lending) rate.
Now the big question is how will Bitcoin perform? This will be the first time Bitcoin will be tested during a recession. Although, keep in mind, I believe what is coming will be far worse. It will be a confidence crisis since central banks are out of options. Japan and Europe are the best case examples. We go negative interest rates and stagflate/deflate. Effectively killing the bond markets where central banks are the only buyers of negative yielding debt. Banks will have negative interest rates, and we will very likely go to a national/international digital currency to prevent people from pulling money out of banks since they have to pay banks for keeping money in them with negative interest rates.
A digital currency ensures we are forced to keep money in banks so they get paid, and also for other reasons such as taxation in case we go the MMT path. Again I have outlined this many times in previous posts.
So back to Bitcoin. It is a great way to hide money or transfer money. The Chinese have been using it with great effectiveness basically creating the rise in Bitcoin. I don't think they are holding it as a storage of value however...more of an in between mechanism for transferring money or getting it out of the country. Remember, buying physical Gold does not really affect the prices...it is the paper market that does (hence why it is likely China and Russia have put large short gold paper contracts to keep prices low while they stockpiled physical at depressed prices).
Again, I believe cryptos will do well (specifically Bitcoin) because of the fiat crisis. With central banks cutting rates, there is a race to the bottom to see which country can cut the fastest. Check out my post on why the US will attempt to do so but the US Dollar may rise...thereby forcing the Fed to 'kill' the dollar. The middle class/main street will lose. Government will win. Wall street will win.
Very bullish on the precious metal complex due to the confidence crisis but also saying Bitcoin will see money run into it. Then it is all about government fighting Bitcoin. Trust me, we have not even seen an effort made by government to attempt to take down bitcoin. They can never shut it down, but can make it illegal which would see the average joe crypto trader/investor sell their positions due to fear of punishment from the government.
Also another word of caution: If Bitcoin hits 50k it may be tough taking profits...most of these crypto exchanges will not have the money. Since they are not regulated they do not need too. You do not have depositer insurance.
