We are in the economic twilight zone. Many financial analysts use historic data and efficient market hypothesis charts to predict what will happen in the economy. The fact is that nobody knows because the world has never seen the culmination of these macroeconomic factors.
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Since 2008, about 40% of the USD supply has been put into circulation according to M2 money stock charts from the St. Louis Fed.
Modern monetary theory is in full effect and showing zero signs of slowing the printing of the world’s reserve currency. Further stimulus plans are also in talks.
- There is unprecedented involvement of investors in all markets.
A recent Bank of America study found that investors have put more money into stocks in the last 6 months than the previous 12 years combined. The Dogecoin surge has the cryptocurrency at a larger market cap than major companies in the S&P 500.
- There is mainstream access to decentralized blockchain technology.
Decentralized technology brings a level of transparency and trust to markets/institutions that is unprecedented.
The culmination of these events is an anomaly, hence we have entered the twilight zone. People point to Weimar and Venezuela and say hyperinflation is next. People point to charts and say that with years and years of bull markets we are heading elsewhere. People say that markets will correct themselves to proper positions. Yet with the anomalies of a high level of retail investor participation, an unprecedented amount of money printed in a decade span and the ability to use decentralized tech on a global scale, who knows where the **** we're going?
In a world of quantitative easing infinity where everyone and their grandma is getting endless “stimmy” money, how can we determine valuable assets?
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This is where decentralization provides clarity. Dollars, precious metals, real estate, stocks, art, cards, toilet paper, etc., have a new sense of value in a verifiably decentralized world. Stablecoins have more value than dollars due to their blockchain backing despite being the same price. This proves the technology is changing the landscape and providing support for assets that have not been verifiably efficient. As markets continue to move to a more decentralized state, we see these real values instead of wild fluctuations.
The Gamestop fiasco is the recent expose of the centralized game. Systems allow for selected investors to manipulate trades and play with shares of which they do not own nor do they even exist. Betting for or against in any market is healthy when positions are validated and decentralized for all participants to be aware. Current systems do not provide transparency and allow for nefarious activity to not only be permitted, but also to be extremely profitable for those in the know. It is common for institutions to write off fines as “the cost of doing business.”
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Decentralized technology is a game changer as with honest blockchain LEDGER systems that have same day/real time settlement data, the endless rehypothecation game that institutions play is over. This creates a democratized and decentralized playing field which is needed as we navigate the twilight zone. This twilight zone episode might not come to an end anytime soon, but a decentralized approach that promotes truth seems to be the only way to find clarity.
