The sell-off on Black Friday had all business media claiming it was a result of the new COVD19 variant “Omicron” found in Africa; this is absolutely not the case for the crypto and stock sell-off. In reality, the “retail investor” is what is keeping this market a float (not to mention the amount of currency the FED has printed). Many retail investors tie their incomes to their brokerage accounts, and use market profits for personal income.
They’ve also become the most gullible and delusional investors in the market’s history; meme stocks and crypto are prime examples. On a side note, the WallStreetBets crowd has convinced people (who have no business being in the market) to invest in dying companies with the belief that some day dying companies like AMC will hit $20k stock price. IMO, the organizers of WallStreetBets should do prison time for what they’ve done to these idiot people.
So anyway, the Black Friday sell off was actually retail investors liquidating for holiday season personal spending; also showing that the market is not on a solid investor foundation. Add in inflation into the mix and it made for dramatic losses on Black Friday.
On top of retail investors keeping the market afloat, recent earnings have fueled temporary optimism in the market. But lest we forget that the recent earnings are being compared to last year’s numbers, when the U.S. was on COVID19 quarantine and corporate earnings were negative across the board (with the exception of the businesses the government allowed to stay open). So technically any number is better than last year’s forced negativity.
Moreover, not many investors have even factored in next years numbers which will reflect Joe Biden’s vaccine mandate that has caused massive layoffs and resulted in the current “supply-chain” issues. Combine the previous with inflation, the spike in energy costs and the Federal Reserve; its not a recipe for continued growth.
I am NOT a long-term investor in this market, for this market could collapse at any moment.
Commodities are at all time mostly across the board because of the CPI inflation that has plague 2021. Moreover, last year’s harsh winter has caused scarcity in many grains (OATS, WHEAT, ETC) which has also increased prices. Given the current supply chain issues as a result of Joe Biden’s vaccine mandate, perishable commodities may be left to rot because of a lack of drivers and workers; which could cause an artificial scarcity causing prices to go higher.
Gold and silver may temporarily provide gains if inflation continues in the short term. But the metal that investors really need to look at is Copper. Aside from the current industrial demand that has kept Copper at high prices for the past 5 years, this government forced electric car initiative (which I think it ridiculous) could drive Copper higher from its current all time highs. For instance an electric car uses 183lbs of Copper alone and an electric bus uses 814lbs.
I personally believe we’re seeing the last days of crypto as we know it. It’s unfortunately turned into a manchild playground of dog coins and scams. The fact that we’ve got morons investing actual money on coins like Santa coin (because its currently the holidays), Squid Game Coin (cause of that ridiculous Korean show) and other manchild BS coins proves that this market is lost! When these morons lose their money, they will be the first people crying to the government to regulate.
Moreover, no one even bothered to notice that taxation of cryptocurrency is going to fund Joe Biden’s Infrastructure Bill. The infrastructure bill allows U.S. government regulation on crypto which goes against the reason why it was created in the first place.
I’ve also mentioned Tether could also cause a major negative impact on the market. I’ve said that Tether is backed by “commercial paper” aka corporate debt out of China. As we’ve seen with Evergrande, China is in a major debt crisis and is economically imploding. So if Chinese debt is backing up Tether (which many crypto whales use to move crypto to avoid taxation) then it could potentially be worthless at some point; which would have a devastating effect on the market.
Another factor is the massive over leveraging of the crypto market. Over leveraging is what is giving the current crypto market cap ($2.4 trillion currently); not actual capital. This means that the market is a house of cards and is comprised of credit.
I’m absolutely not a long term investor in crypto and have since sold the majority of my holdings in the cryptocurrency market.
All of the above will be free-falling into the negative once interest rates are raised. I anticipate a FED increase at any moment given the fact that inflation has gotten away from the FED and Joe Biden is under economic pressure to see rates go higher.
Joe Biden recently nominated Jerome Powell for another term as Federal Reserve chairman. Remember that Powell raised interest rates to the highest in 20 years when he entered his first term a FED chair. Unfortunately, the COVID19 BS came along and Powell brought interest rates to near zero and had the FED by corporate and mortgage bonds at $120 billion a month.
The FED is now tapering the bond buys and are ready to act on raising rates.
Most of my portfolio is comprised of cash (USD), real estate and revenue generating businesses. For in a high interest environment, those with large cash reserves will remain rich while everyone who left their wealth in stocks and crypto will be slaughtered. I hope you found this report informative and keep capitalizing!