The overall state of the economy is in tatters, with US inflation reaching 8.5% and an unequipped Federal Reserve unable to stop its wrath, things are not looking good! In recent days the crypto market has faced downpours of over 15% along with the SPY and Nasdaq both suffering downpours of around 8%, things are scary in the street, and yet I remain here in the brunt of it all.
A wise man once said the time to buy is when there's blood in the streets, no truer statement could be placed onto these events! There is a severe lack of reason within the market currently and people are allowing their emotions to control their thoughts. My views align with many of these people, I also believe the end is nigh but many are lacking the clarity I hold. My thoughts are based on reason and in this write-up, I intend to explain them thoroughly. This is the correct time for the market to block out crypto Twitter whom scream 'bloody murder' at any chance they get. You all seem to forget characters like MMCrypto flip bias weekly and sometimes even daily.
The reason behind the mindset :
So we have established crypto Twitter is garbage, coming as a shock to absolutely no one, however, we need to evaluate why my thoughts are that much more reasoned as I claim. To start with we will look at the state of the dollar, the easiest way to evaluate the dollar is by viewing the DXY index as this is the dollar versus other global currencies. The DXY is currently pumping and has been on a parabolic rise since May 2021 until the past few days when it has run into resistance from the early 2000s. The idea that the DXY can even fathom pumping during 8.5% inflation is a confusing thought that has a simple answer. The DXY is not simply an evaluation of the dollar by itself, it is the dollar versus 6 other currencies. US inflation at 8.5% ≠ A bullish Dollar, inflation is typically the fall in the purchasing value of a currency. So what's causing this pump? The weakness of other currencies. The indexed British Pound is the greatest example of this, having faced a downtrend since 2014 it is quickly facing its doom and adding wood to the fire that is the parabolic dollar. Not only has it been in a downtrend since 2014 but its Chancellor of the exchequer, Rishi Sunak, has implemented a monetary policy that has ultimately been disastrous for the country over the past 3 years. Rising interest rates are forecasted to trigger a recession as early as December 2022 and yet Rishi refuses to step in and use fiscal power to try to overpower the growth rates. Not only are growing rates likely going to cause a recession but the cost of living has increased significantly under his watch with a further 1200gbp cost of living increase likely to hit households within the coming weeks.
Rishi Sunak is just a small example of the fine monetary policies the countries of Europe have opted for which only led to the further downfall of European fiscal power and in turn empowering the dollar. It's not just the European monetary policies that fail to keep inflation in check, inflation is also soon running rampant in the continent of Asia. Asian inflation has grown by 1 percentage point to 3.7% this year which is tame compared to rates in the US however it's already forcing policymakers to shift their focus as they know they are equally unequipped to stop the inevitable.
So in light of all of these reckless policies how do I envision any chance of a bullish market occurring? Well, the beauty of inflation is it weakens the currency, hypothetically making any asset a strong buy. Not only this but the DXY index is also soon running into resistance conveniently when the media has seemingly forgotten about the Ukrainian conflict. The Ukrainian conflict, and preparation for, ultimately set the stage for a weak Euro due to its location however with the conflict unwinding and the media no longer giving it light its inevitable the Euro will bounce back at some point causing strain on the rapid growth rates the DXY has seen in the Euro's absence of power. It's a long shot and more than likely won't play out however if we see the DXY index fail to maintain highs here while BTC and many assets sit on strong support, a large parabolic run-up seen across most asset classes is more than probable.
So the moral of the story is to buy when crypto twitter screams bloody murder and don't trust the narrative... chances are your favorite influencer is just pushing a story that fits their bias!
ps: f*ck J-Powell and Rishi Sunak
A wise man once said the time to buy is when there's blood in the streets, no truer statement could be placed onto these events! There is a severe lack of reason within the market currently and people are allowing their emotions to control their thoughts. My views align with many of these people, I also believe the end is nigh but many are lacking the clarity I hold. My thoughts are based on reason and in this write-up, I intend to explain them thoroughly. This is the correct time for the market to block out crypto Twitter whom scream 'bloody murder' at any chance they get. You all seem to forget characters like MMCrypto flip bias weekly and sometimes even daily.
The reason behind the mindset :
So we have established crypto Twitter is garbage, coming as a shock to absolutely no one, however, we need to evaluate why my thoughts are that much more reasoned as I claim. To start with we will look at the state of the dollar, the easiest way to evaluate the dollar is by viewing the DXY index as this is the dollar versus other global currencies. The DXY is currently pumping and has been on a parabolic rise since May 2021 until the past few days when it has run into resistance from the early 2000s. The idea that the DXY can even fathom pumping during 8.5% inflation is a confusing thought that has a simple answer. The DXY is not simply an evaluation of the dollar by itself, it is the dollar versus 6 other currencies. US inflation at 8.5% ≠ A bullish Dollar, inflation is typically the fall in the purchasing value of a currency. So what's causing this pump? The weakness of other currencies. The indexed British Pound is the greatest example of this, having faced a downtrend since 2014 it is quickly facing its doom and adding wood to the fire that is the parabolic dollar. Not only has it been in a downtrend since 2014 but its Chancellor of the exchequer, Rishi Sunak, has implemented a monetary policy that has ultimately been disastrous for the country over the past 3 years. Rising interest rates are forecasted to trigger a recession as early as December 2022 and yet Rishi refuses to step in and use fiscal power to try to overpower the growth rates. Not only are growing rates likely going to cause a recession but the cost of living has increased significantly under his watch with a further 1200gbp cost of living increase likely to hit households within the coming weeks.
Rishi Sunak is just a small example of the fine monetary policies the countries of Europe have opted for which only led to the further downfall of European fiscal power and in turn empowering the dollar. It's not just the European monetary policies that fail to keep inflation in check, inflation is also soon running rampant in the continent of Asia. Asian inflation has grown by 1 percentage point to 3.7% this year which is tame compared to rates in the US however it's already forcing policymakers to shift their focus as they know they are equally unequipped to stop the inevitable.
So in light of all of these reckless policies how do I envision any chance of a bullish market occurring? Well, the beauty of inflation is it weakens the currency, hypothetically making any asset a strong buy. Not only this but the DXY index is also soon running into resistance conveniently when the media has seemingly forgotten about the Ukrainian conflict. The Ukrainian conflict, and preparation for, ultimately set the stage for a weak Euro due to its location however with the conflict unwinding and the media no longer giving it light its inevitable the Euro will bounce back at some point causing strain on the rapid growth rates the DXY has seen in the Euro's absence of power. It's a long shot and more than likely won't play out however if we see the DXY index fail to maintain highs here while BTC and many assets sit on strong support, a large parabolic run-up seen across most asset classes is more than probable.
So the moral of the story is to buy when crypto twitter screams bloody murder and don't trust the narrative... chances are your favorite influencer is just pushing a story that fits their bias!
ps: f*ck J-Powell and Rishi Sunak
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