Periodically I have posted an article from my friend Carl:
The following article "Crisis Watch" is one of the more scary pieces I have read in some time about the fragility
of our financial system. If it does not give you pause for thought and possibly breaking into a financially
caused sweat---little will.
Border line Fascists now control the birthplace of fascism---Italy. Populism is taking parts of the world by
storm. This has huge negative economic implications.
Interest rates are accelerating---just about everywhere. Weaker currencies are being slaughtered against
stronger currencies. We seem to be in the grips of some rather strange economic behavior. Interest rates are
climbing, oil is climbing, natural gas for demand reasons in the U.S. should be climbing but it is trending
sideways, lumber has hit all time highs (Trump's tariffs on Canadian lumber prices maybe a large contributor
to this), copper which is used in construction is not going up, and inflation is picking up in many nations.
The U.S. dollar is strong against most other currencies and yet oil is going up. Normally a strong dollar
means lower oil prices. Does this mean there maybe emerging shortages of oil production developing?
The strong dollar is contributing to the cost of Brent Oil being far higher than West Texas Crude currently,
$78.50 for Brent vs. $71.35 for WTC. Mortgage rates in the U.S. have climbed to where they are beginning to
slow down home purchases. If your interested in selling I believe the line for selling will be far longer by
year end. The U.S. economy is chugging along as it hit full momentum because of the low interest rates created
by the Federal Reserve made all purchases possible. Higher interest rates will eventually slow down the
consumer section of the economy. Declining tax revenue will hurt government spending. The economy could be a
huge mess caused by consumers not spending, the government will not be able to spend, interest rates will climb
as the government attempts to finance its debt, banks will be facing growing loan defaults, oil could go higher
than expected if demand continues to expand more rapidly that supply around the world, and than the cost of
transportation takes off.
Now auto loan defaults are approaching all time highs. Auto loans are an economic canary in the coal mine
of a stable economy. Couple all of this with a tax bill in the U.S. that will eventually send our budget
deficit far higher and climbing like a rocket---I would say the best thing to
NOT DO IS BECOME FINANCIALLY COMPLACENT.
Thanks Steins1
Sobering for sure
MA on crypto and currencies and assets and trouble ….
The new currency issued after the German Hyperinflation, Rentenmark, was backed by real estate. Tangible assets are on the opposite side of whatever the currency is in use. When the stock market rises, the purchasing power of the currency declines. When the stock market crashes, then the purchasing power of the currency rises. They are on OPPOSITE sides. Do you really want a cryptocurrency to be a currency or asset? Most people pitching them are really explaining an alternative asset – not a currency.
Cryptocurrencies are a new asset class. Just look at them from that perspective. You are asking a lot if we are talking about replacing the monetary system with private money. That is just not likely in the cards. Nonetheless, we will probably end up with a new RESERVE currency used among nations. That is still unlikely going to be a world currency used by the people in every country. What we use for currency can be cryptocurrencies of some sort ONLY if we see the political powers crumble and fall.
None of the big IT companies are doing anything with Blockchain. That may change in the future and it may even be replaced by something even better. I draw the line between an asset class and a replacement currency for the dollar with a very thick marker. You would have to completely destroy the system as is for that to even come into play. Is that what people are praying for? All pensions gone, banks destroyed and you think this cryptocurrency will be the only thing to survive? You go that far the ONLY money becomes FOOD! We are still in mid-game and we are not yet close to the end-zone.
https://www.armstrongeconomics.com/world-news/cryptocurrency/as-long-as-cryptocurrencies-remain-assets-then-they-will-survive-a-monetary-crisis/