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Recently there have been a lot of studies about strong possibility of global stock market collapse and therefore a possibility of economic meltdown in some of our countries.
Did I make it up?
Just search Stock Market bubble on Youtube! And you will get this search: https://www.youtube.com/results?search_query=stock+market+bubble+2021
Different people, experts, veterans and tons of opinions.
Now did you check your country’s debt status?
Go here: https://www.usdebtclock.org/world-debt-clock.html
Japan, Greece, Italy, Portugal, Spain, Brazil, France, Canada and USA – it looks like a mined field. Which one is going to burst first? You tell me.
Hyperinflation rumors
First what is inflation? It is a gradual loss of purchasing power. It exists everywhere. In highly developed countries it usually is below 4%.
What is hyperinflation?
Annual inflation of over 100%.
The first hyperinflation I’ve ever heard is from Weinmar Republic from 1920’s of Germany. Google the bills online if you don’t believe me.
https://www.google.com/search?sxsrf=ALeKk02LakSWRvyJWSer8KOiUU0aNz0pwg:1626747321703&source=univ&tbm=isch&q=weimar%27s+mark+images&sa=X&ved=2ahUKEwjr9f6ByvDxAhXQMd8KHcsKB98QjJkEegQIEhAC&biw=2560&bih=1170
BTW I have some at home, maybe I should sell them online.
Have I ever seen any hyperinflation?
Yes, in 1990’s in Croatia. Since 1980’s former Yugoslavia started to have some inflation problems. I went on vacation to Croatia in 1992, and there it was.
I went to a store in the morning and one kilogram of tomatoes was 50 dinars. The following day it was 65, and 2 weeks later after the vacation ended it was over 200.
What did Croatians do back then?
They had their own store of value. A lot of them had Deutsche Marks or Dollars.
Today you have probably heard about countries like Venezuela or Zimbabwe or Argentina?
Yes, third world countries. But is there any possibility that this may affect your country?
Yes, you see from the news stores from Venezuela with empty shelves and you hear also that it's a country with No 1 highest crime rate in the world. Probably very distant scenario for most of us, but is it really?
Some people now argue about deflation or hyperinflation. I live in Mexico, what I can tell you from my observation; most of the imported products increased between 10 and 50% during this year.
Now I heard that last month the inflation in US was around 0.9%. I personally don’t believe it because these price hikes started here aprox 2 months ago.
Now why most of the countries are cheating with their inflation index?
One simple reason: The higher inflation, the lower GDP. It wouldn’t be attractive to say that our country grew by 0% in the last decade but if I decrease the inflation percentage as a financial regulator, I can totally alter that number, so we can report steady slow increase of 2% during the last decade.
2% of GDP is much nicer than 0% (or even -2%). You can do miracles to your economic growth figures by decreasing inflation.
We can also alter the inflation index, we can put there computer and Hi-tech which tends to diminish the price on the long run. And you slash the food inflation from 9% to a magical number of 4.5%. They have been doing it in my country for many decades.
It’s a dirty trick that many economists have learned, at least in Latin America. Probably they are more honest in your country, I don't know.
Now some people tell me, but this meltdown won’t happen next week, right?
Honestly I don’t know, I hope that it can wait at least until September but it can be tomorrow, next week, next month or next year. I think few people know when but we feel in our bones that something big is coming.
Some people may think that it’s a pure exaggeration.
I have another question for you:
Have you seen your pension fund? Is the money still there? Did it increase over annual inflation? Or did you see some losses in the last moths?
I’ve heard that some people say that when you are old you don’t need that much money. I honestly disagree. When you are over 90 – who is going to wipe your butt when you won't be able to do it?
I personally don’t think that someone would do it for free. If you think that a close relative will do it, let me tell that probability is below 20%. If you have many children that probability can go even below 15%.
So believe it or not, you will need the cash more than ever.
Now what kind of cash will we have? A similar one like today, highly devalued or something that plunged over 90% in 10 years. You tell me.
Great Depression from 1929 wasn’t solved overnight, it took over 2 decades to get rid of all its side effects. Stock market reached similar pre-Depression levels until in 1950’s. Just a little history. Baby Boomers and President Eisenhower have reached the best economic status in the history of America in 1950's-
Now I have some questions for you and check your answers, please. It's a little checklist how ready you are for the times when it might happen.
Don’t do it for me, do it for you if you want to, it’s totally up to you anyway.
1) Do you have any cash at home?
2) Or do you have it only at bank or on your credit card?
3) Do you have any store of value?
- Bitcoin
- Ethereum
- Gold
- Diamonds
- Silver
- Any other hard fiat: Swiss Francs or British Pounds
- Piece of land with your own grown food, some chicken, goose.
4) Do you have any non perishable food at home?
(perhaps some tuna cans, or coconut oil, or jar of honey)
5) How about your supply of detergents, soap, shampoo?
6) Do you have anything that you could barter?
7) Do you have only one job? If yes is there any possibility that you would be open minded to check other options.
8) Have you considered to move out of your country?
9) Have you thought which country would become your new home?
I asked these questions to check how ready you are for any possibility of economic collapse in your country and if you have ever considered what to do when it happens.
I asked question 8 on purpose because people from highly affected countries such as Spain, Greece, Argentina or Italy, they moved and changed their nationality despite the fact that they loved their country or their culture. And that's also how the unemployment ratio decreased in Greece, Spain and Italy, and probably not many discuss this.
It may sound totally weird but in my case I consider the option of global economic meltdown, and I rate it as a 75% probability that it would happen before 2030.
25% against it, there could be always a reversal and some miracle may happen.
Bitcoin Doom News
Now you will be hearing from mass media or even groom crypto videos, things like: Bitcoin Bearish, Bitcoin is going to 15,000 USD, mass crash is coming.
I see them every day, some stuff is true but they don't tell you everything in those news.
You will also read headings: China crackdown on Bitcoin
But are there heading like these one?
China's crackdown will make Bitcoin more scarce after mining diminishes. (there won't be enough Bitcoin)
Or that Chinese people will always find their way on how to get away with all these bans or prohibitions.
Why am I saying all of this about China?
These news look scary but people don't see the good part of it.
I was born in one communist country – Czechoslovakia, and no matter if the government is a nasty one and if it controls you, you will find always the way how to get away of this.
There is always some kind of black market and there will be someone always who will do these risky moves in those countries.
Now if China's market disappear for cryptos have you considered other parts of world?
Bitcoin moves from Asia to Latin America.
Latin American countries are still far behind other countries and continents in crypto adoption but it was El Salvador who became the first country in the world who declared Bitcoin as a legal tender.
You will always have a crypto hostile countries, but in this part of the world many countries such as Mexico or Colombia are neutral - not against but neither pro.
When will the bear market end?
There are no rules for its duration. From my last experience in 2018-2019, there were few months when the market was playing long boring sideway game from December to February until it took off in spring 2019.
Some people think that it would last all this year but it could be only 2 or 4 months and that's it. The market now is not the same as 3 years ago. There wasn't a Defi back then for example. So we can have only different historic perspective but the background today is different.
What if someone prohibits the cryptocurrency in one country?
Some authorities, they already hate it of course because it threatens to their national fiats and tax control. But even if you ban it, people will always find their way how to get away from this.
Do you think that elites have only cash or fiat?
I bet you that some of them have some cryptos as well as a Plan B because deep down inside of them they know that some of the debtors will default sooner or later. They are already ready for that outcome.
My theory is, in case of mass ban, it would become much more expensive, much more desirable and people would trade it on peer to peer base as it was Bitcoin’s original idea.
So if China thinks that by banning it, they will solve it, they will make it extremely desirable for their own people.
Is it overvalued?
It depends on the market move. 2 months ago, people were like crazy buying Dogecoin for 0.7 USD, now it fell below 0.18 USD. It depends on which mood we are.
Today 1,000,000 Bitcoin satoshi (0.01) it is around 30 USD.
Have you ever considered that it may become 10,000 USD if 1 Bitcoin comes to 1,000,000 USD at certain point of future?
Exaggerated? Maybe yes, maybe not.
But just cold numbers:
Bitcoin pizza – 10,000 Bitcoin in 2012 (30 USD when 1 BTC was 0.003 USD)
Today that pizza would cost 30,000 * 10,000 = 300 million USD. Last April that pizza was 650 million USD. So the numbers change pretty fast.
I am not saying that this will happen this year or next year, but at any determined time lapse, maybe in 5 or 10 years, who knows but it’s a strong possibility.
So this was my point of view.
I think nobody is 100% right but we may have different opinion. Sometimes we will agree or disagree.
Let’s think outside the box and always DYOR. When I mean DYOR, trust yourself because I have seen a lot of experts doing terrible mistakes in their videos, forecasts. So let’s begin by yourself, sometimes it’s much better trust yourself than others.
So live, hodl, trade and feel your cryptocurrency.
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