Hello) I am analyzing the markets in the last 15 years as a professional investment analyst. From a macroeconomic aspect I believe that we are heading to world of stagflation. On the one hand, inflation will remain high due to the extensive amount of money circulating in the markets (expansionary monetary policy). On the other hand, economic progress will stagnate due to the increasing public debt that inhibits western economies from investing more in infrastructure and social benefits (contractionary fiscal policy).
I try to understand which financial assets will perform better in this environment and I getting frustrated.
Stocks will probably remain volatile due to the weak demand, the increased central bank interest rates, low consumer confidence.
Bonds are doomed due to the imminent increase of interest rates that will make certificate of deposits more attractive.
Precious metals and especially gold are already inflated due to the expected increase of inflation.
Cryptos are obviously positively correlated with the general market sentiment.
What are your thoughts?
Who knows?
Regarding:
I would suggest watching some of the content from “Eurodollar University” by Jeff Snyder and Emil Kalinowski. https://www.youtube.com/c/EmilKalinowski/videos
Also Lacy Hunt’s view is quite sobering:
What I do see is the following:
- Erosion of trust in governments
- Increased access to information via internet, youtube
- Improving quality content available and free
Everyone has a camera and internet connection in their pocket. Everyone can make content and post it online. Everyone can point out when the “centralise leaders” cheat or manipulate.
These all lead to increased recognition and understanding of the problems and the manipulation that is happening.
We are witnessing an amazing technology revolution where we can create systems of record keeping, ledgers, voting systems etc. which are not dependent on trust in a centralised authority. And these systems are so defensively strong that even the most powerful governments can’t take them down or manipulate them. Humans have never had anything like this before.
Once people really understand, they never go back. The result is a net exodus from the legacy fiat system into crypto. A permanent migration of capital which is ever increasing.
I think we just need a few more stupid actions by the FED Reserve. Maybe this tightening they are undertaking into an economic slowdown will be enough to get a few more people thinking and researching? Maybe a few more government draconian mandates? Maybe some more big tech erosion of our privacy? Maybe this Canadian crackdown where the Govt can freeze bank accounts of people donating to protesters? More people will wake up.
I think eventually people will demand that their hard earned money, savings, assets, are recorded on public decentralised ledgers where it can’t be manipulated. I think they will also eventually demand that all government deals, donations, decisions etc. are also recorded on immutable blockchains for public verification. After all they do work for us.
This is all coming to a head over the next few years.
I don’t see it particularly as an investment but rather as a massive re-writing of the financial rules. There is going to be some upheaval.
If the financial system does change and people eventually see crypto as a better “store of value”, what effect will that have on traditional assets like housing which have been bid up and monetised as “stores of value”?