The total global cryptocurrency market hit a record high market capitalization on November 10, 2021. Bitcoin BTC and over 19,729 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 94 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 in the very near future – 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, but it has lost 41 percent of its value since then.
4 of the 5 FAANG stocks (the titans of American high technology) are already in a bear market. The 5 FAANG stocks are 1) Meta Platforms, Inc. (FB or Facebook down by 48 percent from its record high), 2) Amazon.com, Inc. (AMZN down by 34 percent), 3) Apple, Inc. (AAPL down by 14 percent), 4) Netflix, Inc. (NFLX down by 73 percent) and 5) Alphabet, Inc. (GOOG or Google down by 24 percent). The minimum description of a bear market is to be down by 10 percent. The aggregate US stock market, best represented by the NASDAQ Composite Index, is down by 24 percent since November 22, 2021.
Recent stock market activity points to an emerging asset market collapse – the noise coming out of the real estate market is demonstrating this by the day. Central Bank Digital Currencies (CBDCs) which are forecast to replace existing national paper fiat currencies will likely be even more inflationary, and even worse than that, they will remove all remaining financial liberty. Governments will have the ability to determine who spends how much, on what goods & services, and by what time – i.e. money with an expiration date. Privately launched cryptocurrencies are an attempt to preserve financial liberty by those who own them, but most of them cannot and will not survive. Case in point: 19,730 cryptocurrencies now exist, of which only 10,081 are big enough to be even traded on an exchange. A mere 96 coins have a face value of at least one American cent. Bitcoin BTC is by far the oldest and biggest of these, and it also exists in “stock market” form in the likes of GBTC – the Grayscale Trust, which trades a number of the major coins. Those investors with liquidity (especially out of locations such as the Silicon Valley) are continuing to place their liquidity in numerous asset classes with intrinsic value. It is their statement that paper fiat currencies and the governments behind them will not endure. Many assets have already been “behaving like gold” – precious metals, jewelry, cryptocurrencies, real property, farmland, collectibles of all sorts such as coins, stamps, toys, books, trading cards, antique & classic vehicles, silverware, dishes & plates, artwork, NFTs, collectible furniture, and the list goes on.
The flight into such assets with intrinsic value is driven by the fear of hyperinflation. The Safewealth Group of Switzerland (long recommended by Elliott Wave International) has the following to say with respect to worldwide hyperinflation: “unprecedented world-wide inflationary climate to arise. Our studies support the thesis that the economic and monetary problems that lie ahead will be dramatically more consequential than anything else we have known before; i.e., Germany 1920 on a global basis.” The USA in particular is in dire need of a change in political leadership in the midterm election of November 2022 and especially in the Presidential election of November 2024. The policy of the US Federal Reserve Bank is finally tightening, but this tightening must be accelerated and held in place to stop the current hyperinflation. Credit is far too inflated, thus are prices so highly inflated (for absolutely everything – both goods & services), and there is far too much debt – government, corporate, individual, mortgage, credit cards, student loans and the list never stops growing. Far too many people have become dependent upon financial assistance, welfare benefits and handouts. Far too few people have productive lives. It has come to the point where we do nothing productive and manufacture nothing.
The entire world should learn something from people like the Amish and the Mennonites. They are living proof that “the meek shall inherit the earth.” They refuse to go to war, they refuse Social Security, Medicare & welfare. They refuse an impersonal and immoral modern society. They grow their own food and manufacture their own goods. They live “off the grid” and are not vulnerable to pandemics, supply shortages, media propaganda, EMPs (electro-magnetic pulses) and a world turned bad – a world in which ordinary people no longer have freedom, and where governments, corporations, social media platforms and the so-called “mainstream” media exercise censorship to eliminate any and all opposition to people who disagree with them in any way, shape or form. Welcome to George Orwell’s HELL of 1984.
The last Federal Reserve Chairman to have the guts to really tighten credit was Paul Volcker (1927-2019) who headed the central bank from 1979 until 1987. I can still remember when US interest rates most recently peaked in 1981. The US Congress had passed President Ronald Wilson Reagan’s retail IRA (Individual Retirement Account) bill, whereby retail investors were finally able to deduct up to USD $2,000 per year from their taxable income with the object of saving for their own retirement. Retail bank CD (Certificate of Deposit) rates hit 22 percent per annum for time deposits of 3 to 6 months, and banks & savings & loan associations were running special deals whereby depositors could earn 40 to 50 percent per annum on their USD $2,000 IRA deposits from January 1 until April 15 of 1981.
