Financial, Economic and Social Mood Update (January 1, 2022)
The total global cryptocurrency market hit a record high market capitalization on November 10, 2021. Bitcoin BTC and over 16,694 other privately launched electronic digital cryptocurrencies have been surging in value over the past decade. They have already matured to a large degree, having replaced 80 percent of commercial and investment banks all over the world. Traditional commercial and investment banks as we have come to know them over hundreds of years will likely cease to exist by the end of the first trimester (i.e., one-third) of 2022 – this is how rapidly things are changing over into the new digital financial system. The cryptocurrency market reached a record high value on November 10, 2021. As of today, market capitalization is depressed, standing at 24 percent below the value reached on that date more than 7 weeks ago. Nevertheless, many billionaires and millionaires continue to invest capital in the cryptocurrency market – hedging against the very likely probability of the ongoing collapse of fiat currencies.
Just how bad is the current situation with respect to inflation? There is nothing “transitory” about this inflation, unless of course we realize that we are transitioning into financial and economic oblivion. More US American Dollars have been created or “printed” within the last 2 years than in all recorded history. This equals a disaster – no ifs, ands or buts. Mexico will launch its own national CBDC (Central Bank Digital Currency) in 2024 – such “governmental” digital currencies will make it even easier for national governments to hyper-inflate their own fiat currencies.
In the 24-hour period of December 14 & 15, 2021 both Bitcoin BTC and Zcash ZEC registered severe price swings on certain exchanges, afterwards attributed to computer system “glitches.” Nevertheless, Bitcoin BTC went as high as USD $5,604,063.00 per coin, and Zcash ZEC rose up to USD $19,809.64 per coin. How much would cryptocurrencies gain in value if such high prices were to hold for any length of time – not merely due to a supposed computer system glitch? The remaining multiples for maximum increase in value would be as follows:
Assuming that such currencies will replace all existing global paper fiat (government) currencies, Bitcoin BTC and other privately launched electronic digital cryptocurrencies have merely 8.56 fold left to increase in value. This calculation assumes that financial derivative instruments will continue to survive in their current volume, which is entirely imprudent. Financial derivative instruments can be thought of as “bets” which money center commercial and investment banks make upon the financial performance of anything and everything. Why are they imprudent? It would be like if you only had one Dollar to your name, but you promised to pay someone else 5 Dollars that you had no way of obtaining.
If financial derivative instruments were removed from the picture, then the maximum remaining average upside potential for cryptocurrencies equals just 1.56 fold from where they stand today – this assuming that cryptocurrencies will completely replace all paper fiat (government) currencies. The “window of opportunity” for people not yet invested in cryptocurrency is rapidly disappearing, and the remaining life span for the government paper fiat currencies is almost over.
With respect to the current dismal state of the country and of the world, I wish to quote a brief passage from a book titled “Drive!” by Lawrence Goldstone. The book is about Henry Ford, George Selden, and the race to invent the age of the automobile in the late 19th and early 20th centuries. The USA and the world experienced a severe financial downturn (or “collapse”) in 1907 which was reportedly brought about by speculation in the copper markets. US President Theodore Roosevelt and John Pierpont Morgan had the US government and the big banks step in to pump liquidity (money) into the financial system, and began the process which created the US Federal Reserve System, which was supposed to prevent such drastic economic swings in the future. The important quote starting on page 263 reads as follows:
“Although the nation suffered greatly, effects were not felt evenly. The impact was most acute on stockholders, at that time predominantly upper-income individuals and families. And in a nation that was still largely agrarian, people who grew their own food, sewed their own clothes, and canned their own preserves were better equipped to weather the storm. Consequently, the market crisis was felt disproportionately by city dwellers and the wealthy, precisely the markets that the ALAM members were targeting for their expensive cars.”
ALAM stood for “Association of Licensed Automobile Manufacturers” which included the earlier, larger automakers before the ascent of the Ford Motor Company.
The reason for sharing the above quote should be obvious – free and independent people are those who will endure and prosper – a perfect example thereof would be the Mennonites and the Amish, or native peoples all over the world before they were conquered by the Europeans, the Americans and other so-called developed or more advanced cultures.
