THE ENDGAME: All-out Currency War BEGINNING!
The value of our portfolios is about to be massively impacted by a government-induced fiscal upheaval. $17 trillion in global negative-yielding bonds is a historic first, but that’s just a drop in the bucket. What I’m seeing as the way out for governments and central banks will be a currency war. It is about to heat up and the first victims will be the middle class.
The Federal Reserve will do whatever it takes to achieve their target of sustained 2% inflation: the numbers keep coming in close to it, but they only have two weapons at their disposal, if a slowdown becomes a reality. The first is to lower interest rates aggressively. In a couple of weeks from now, I expect the FED to cut by a minimum of 25bps. There’s a dollar shortage, globally, and it must be addressed by the central bank.
The problem is that this 2% inflation target is working only now, after eleven years of expansion. The only other way to spark inflation and not get dragged into debt deflation is by employing extreme currency debasement, which is achieved by cranking up the money-printing presses or by writing off debts. This wouldn’t be possible if we were on the gold standard, but that window closed 48 years ago and we don’t count on the government putting us back on it anytime soon.
For the middle class, the timing of this couldn’t have been any worse. Interest rate cuts, additional rounds of quantitative easing, and federal government deficit spending do not create jobs or prosperity for anyone except the top 1%, as the percentage of employed people compared to the overall population has only shrunk over the years.
Courtesy: Econimica, Zerohedge
The government will never reveal these shadow stats; they want to perpetuate the narrative that only 3.7% of the working age population is unemployed and that the economy is running smoothly.
You need to prepare for this by shifting into assets that maintain their real value irrespective of fiat-money devaluation – in other words, assets that cannot be printed. Stocks can fit this description, depending on the company and its policy on share dilution and its brand loyalty. Gold is a proven hedge against inflation, and can appreciate in value sharply when fiat currencies are devalued.
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Cryptocurrencies are specifically designed to combat inflationary forces; Bitcoin, for example, will always have a limited supply of 21 million BTC. People have written to me and asked me about Facebook’s upcoming Libra Coin and whether that will be a good inflation hedge like Bitcoin, and I have consistently recommended extreme caution.
As Facebook has described it, Libra will be a stablecoin whose value will be pegged to a basket of fiat currencies and government bonds: the same debt instruments that are under attack from the currency war. Calibra coin will, unfortunately, rely on income from a collateral base of fiat money which will continue to be devalued and bonds which will yield less and less in the near future.
Courtesy: Bloomberg, The Daily Shot
Bitcoin, on the other hand, is fully divorced from the government easing and money printing scheme. Some investors are disappointed by Bitcoin’s retracement from $14,000 to the $10,000 level, but we have to keep it in perspective: Bitcoin is up 169% in 2019 so far, and we can’t expect an investment to just keep going up in a straight line.
Quitting on Bitcoin now would be like giving up during the darkest hour, right before the sun rises: all you have to do is sit tight because the best days are ahead of us and it won’t be long now.
Sit tight; the idiots at the helm or the corrupt elites, however you want to look them, will devalue and that will help Bitcoin reach all-time highs.
Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.Please read our full disclaimer at PureBlockchainWealth.com/