I just came to a shocking realization. This should be obvious to everyone but we are almost all blind to it for various reasons. Bitcoiners are blinded to it because they are all used to bitcoin and bitcoin is crazy. People without investments are blind to it because they don’t pay attention to markets. The rest of the world is blind to it because they are being fed a narrative about pandemics and wars being responsible.
We are ALREADY knee deep into the coming financial crash that everyone has been talking about. Sure it could get worse, and it likely will, but for a bitcoiner, we are used to this! Bitcoin trained us for the big crash. 15% or 20% down in a month, it’s nothing for us! That’s just what bitcoin does.
But that is not what stocks are supposed to do, and it won’t be long before people realize this is not about Ukraine or the pandemic, that things are not going to go back to normal when the war ends, just like they didn’t come back after the pandemic.
If the world were to have a DEPRESSION like the US did in the 1920's, it would look very very different today. In a globalized society, there are already a lot of people living in poverty and you could say that they've been living in a depression their whole lives. Even just a redistribution would feel like a depression to some.
Also we have to account for the fact that the statistics are measured in a really funky way. Inflation is judged by a basket of goods that the govt. is constantly changing to fit their narrative. So if the price of soap goes up too much, they can remove soap from the list of goods that they use to measure inflation which manipulates the data.
Unemployment statistics don't count people who work part time or people who have given up on looking for a job, and there is also an issue of who is included in these surveys. If I were asked to participate in such a survey, I'd probably decline, so they are only working with data from the willing participants. I'm guessing many without jobs are unwilling to participate. So unemployment is likely much work and has been for a while. The Gig Economy makes it’s nearly impossible to figure out true unemployment or underemployment.
So if we imagine a 5-10 year recession or even a depression... we may already a few years into it, 3 at least, possibly more, depending on how skewed the data is and how crappy an indicator the stock market has been. It may be half over. The second half will probably be more dramatic and terrifying, as some countries currencies may pull a Venezuela Bolivar or some big banks or other companies may go under. It will be harder to ignore, but some of this is likely already being priced into the markets right now, hence the crashing stock market.
It's funny, I don't hear anyone saying the stock market IS crashing, just suffering, but by all accounts, it has been CRASHING for months already. As I said, we are in narratives that prevent us from seeing this for what it really is. Lucky to be part of the bitcoin cowboy crew who is staying cool, rather than everyone else who is probably very anxious right now.
If you think about it, it's not likely that people used the word "Great Depression" during the first few years of that era. According to google, the term was coined in 1934 which was half-way through the Great Depression and it may not have been popularized until later.
So even if this ends up being worse than the Great Depression (it may) , we are likely much further into it than we realize which means it will feel shorter than it will end up looking in the history books.
In a globalized world though, I imagine many more safe havens and much more variety in how such a crash impacts people. Those safe havens are likely going to be the assets that can survive the shock (gold, bitcoin, stocks of companies which adapt well), countries which experienced their turmoil before the rest of us, and countries which are the most self-sufficient. Perhaps it will also include certain cities which attract forward thinking people, be it business people or community oriented people.
It's bound to be a hell of a long and bumpy ride, but I think we are much further along into it than we realize. I also think we will continue to have opportunities, and those of us in bitcoin who were struggling before will hardly feel the worst of this crash.
The ones who will feel this will be the parts of the middle and upper middle class who invested most of their money through brokers and funds, and people who bought houses and then lost their jobs. I feel for them, but hopefully we can help guide them so they can avoid losing everything and accept the new realities.
While massive wealth redistribution where the rich win is usually the end result of financial meltdown, it may play out a little differently this time thanks to the rise of the retail investor and cryptocurrency. The diamond hands are stronger than ever, and if you hold the right things (I'm personally thinking Bitcoin, Hive and Tesla, playing it safe), you may end up coming out ahead of the institutions with regards to how well you weathered the storm.
Let's see!
(Obviously nothing here is financial advice ;-) )
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