Financial, Economic and Social Mood Update (January 1, 2021)
Here’s wishing all of my subscribers and readers a happy New Year – may 2021 be a better year than 2020.
Hyperinflation is here, NOW. US GDP and federal government “spending” (i.e., the “printing,” or the “creation” of brand new money out of thin air and backed by NOTHING) now equal USD $6.5 TRILLION for the year of 2020. The US Congress (Senate and House of Representatives) spent a record USD $3 TRILLION in December 2020, which portends an absolutely alarming trend of increased hyperinflation in 2021. If this trend continues for all of 2021, prices will increase by 5.5 fold – an annual inflation rate of 454 percent, which would be the 37th highest inflation rate in the recorded history of the entire world. I fear that the Federal Reserve System’s policy of “printing money” (i.e. creating brand new money out of thin air backed by absolutely nothing whatsoever) will become even worse after January of 2021. The Fed has crossed a line which they have never crossed before – they are now printing more money than the annual value of the entire United States GDP (Gross Domestic Product). What happens if the Fed goes all out and “prints” enough brand new money to cover the GDP of the entire world? If this were to happen, then prices would increase by a whopping 15.2 fold compared to what they are today. And what does this mean in plain English? Let’s say you spend USD $100 per week on groceries to feed your family household. Well, if prices increase by 5.5 fold, your income remains constant (no change) but your weekly grocery bill increases to USD $550. If prices increase by 15.2 fold, your weekly grocery bill goes up to a whopping USD $1,520. You get the picture – in simple terms, the vast majority of people will be very poor. This has happened in many countries all over the world at certain times in history, and I am afraid it will happen right here sooner rather than later.
Quasi government entities which fund and support so-called “affordable housing” in the USA are rapidly taking over the entire real estate market, of both brand new and “resale” homes. This is yet more valid evidence that the US Dollar is rapidly becoming worthless.
93 percent of all of the national economies worldwide are shrinking, whereas stock markets, real estate, bond prices, and cryptocurrencies are roaring at record high asset values – yet more hard evidence that hyperinflation is ravaging the paper fiat currencies (especially those from countries most deeply in debt such as the USA).
Let us pause now and look at some of the immediate symptoms of systemic failure, mostly in the U.S. The situation in the USA is so bleak that 40% of individuals, 61% of restaurants, and 35% of small businesses cannot make their December rent or mortgage payment: https://www.zerohedge.com/economics/record-61-restaurants-35-small-businesses-cant-pay-december-rent.
How important and how “big” have cryptocurrencies become?
Cryptocurrencies have outperformed every single other asset class for the past decade, and yet even among rich families, a mere 0.18 percent of wealth is invested here (compared to 3.3 percent invested in gold) – this according the site techcentral.co.za. The number of cryptocurrency exchanges in the world (all of which must be chartered as commercial “banks”) is now 504 – compared to an ever decreasing number of traditional commercial, credit card, Internet and investment banks – an estimated 3,904 institutions and dropping by the day. How many people around the world actually own some cryptocurrency? What follows are a few cues: there are least 35 million accounts, according the usage of www.coinbase.com The actual number of “individuals” who own cryptocurrency is 2.6 million according to the FCA – the “Financial Conduct Authority” of the UK, and 7 percent of Americans are estimated to own at least some cryptocurrency. The BTC (Bitcoin) base system has 153 million unique addresses, there are 24 million Bitcoin “wallet” addresses in the world (a grand total of 60 million “Blockchain” wallets), and the number of global ATM (automated teller machines) which transact in Bitcoin and other cryptocurrencies stands at 7,722. Perhaps a better question to ask with respect to the current retail “reach” of cryptocurrency is this: how many customers or users do the top global retailers who now accept cryptocurrency transactions serve? The answer is already quite impressive: 770 MILLION customers worldwide.
Bitcoin reached yet another record high on the primary markets on December 31, 2020 of USD $29,244.88. Bitcoin alone comprises 71 percent of all global cryptocurrency market capitalization. Bitcoin and its direct derivatives (coins launched as Bitcoin spinoffs and/or launched by the founders of Bitcoin) comprise 88 percent of all global cryptocurrency market capitalization. More importantly, prices on the secondary markets are already going to the moon – Bitcoin BTC at USD $1.2 MILLION (this is no typo), Litecoin LTC at USD $600, Basic Attention Token BAT at 79.9 cents and Orchid OXT at 39.2 cents are but a few valid examples. These investments have increased in value by as much as 101-fold or 10,000 percent since July of 2017. Once again, this is no typo.
