Bitcoin Dips Below$20,000 again, as Consumer Price Inflation Continues to eat away at people’s standard of living, reluctant sellers in a bind – September 1, 2022,
When I look at Bitcoin, it looks like it’s on a downward trend; I give credit where it’s due; I’m rather surprised it’s still valued near $20K as of September 2022 because in my opinion, all signs point to a downward spiral, and I’d expect investors in the token to recognize that. Unlike asset inflation, you can’t HIDE from consumer price inflation because it attacks things like food, energy, entertainment, clothing, and general human behavioral patterns.
With Bitcoin, especially if you don’t have a Crypto hardware wallet there’s nothing to feel about Bitcoin, it’s in digital space and so if I paid a premium for a digital asset that appears stagnant, and my goal was to use Bitcoin to enrich myself, I’d be thinking to sell and take my losses right now.
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People who align with the Republican Party are getting worried leading up to the mid-terms, as the best thing to happen to Crypto Donald Trump may indeed be hurting, not helping the Republican Party. Joe Biden, to date anyone, unlike Donald Trump, has NOT publically attacked the federal reserve for raising interest rates; if people remember, when interest rates began rising, Donald Trump, who claimed to have the best economy ever, was terrified when the Federal Reserve raised rates a few BASIS points.
Low-interest rates and low CONSUMER PRICE inflation were a great breeding ground for cryptocurrencies; on the flip side, high consumer price inflation and higher interest rates make cryptocurrencies less attractive. The assumption by most people who assume that Zero Interest Policy is here to stay is that raising rates is temporary, and as soon as something breaks, the Federal Reserve will reverse course and launch Quantitative Easing(QE) infinity, but the Federal Reserve was designed to stop DEFLATION!
People tend to forget that the challenge with a market economy is NOT inflation; it’s deflation; when you see hyperinflation, it’s because the government has too much control over the money supply; it’s one of the reasons why in the modern era that for-profit private banks do most of the money printing. A private bank is incentivized to be fiscally responsible, whereas a Federal government is incentivized to win an election.
One of the reasons I think Central Bank Digital Currencies(CBDCs) are unlikely is because I think if they’re implemented in a manner that forces everyone to borrow money from a central bank, it will create IMMEDIATE problems for the central bank ledger because only around 1/10 people know how to INVEST their money wisely, meaning that both government and the people will likely find themselves in debt they can’t repay and because they’ll be no private banks to regulate who is allowed to borrow money based on credit rating, money will become 100% politicized and federal politicians will bail out everyone they legally can to win an election.
In most countries that experience hyperinflation, it’s because DEMOCRACY decided that all people needed a bailout. I like to remind people that the only thing new about CBDCs is that the government will be able to monitor every transaction you make. But the politicization of money is nothing new; the politicization of money it’s the root cause of hyperinflation.
I comprehend that many of you imagine the architects of our modern economy fueled by fiat money were dumb, but give them a little credit. I’m definitely not a Keyesianbut they did meet the demands of the people who wanted an ELASTIC money supply. Bitcoin, as an example, attempts to be an elastic monetary system ut without mass adoption; fractioning bitcoin becomes extremely risky for the lender.
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I’m slowly learning that the debasement of other currencies in the modern era may not be happening from governments anymore; as we’re observing with Japan and India, people are selling fiat currencies to buy U.S dollars in anticipation of an economic downturn, BUT… because of the Joe Biden war on fossil fuels, consumer price inflation appears to be raging on and may get worse if Americans vote for Democrats in the midterms.
Recently The House Democrats brought in a new face when Alaska decided not to vote for Sarah Palin and instead voted for the Democrat woman. Is this a sign of things to come in the midterms? I’m not sure, but if you own Bitcoin, and there’s a price you’ll sell for if the price continues to drop, you’d be wise to pay close attention to the midterms.
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The democrats, even if you like them, are going to make Americans poorer; I don’t know any point in U.S history, except for maybe Andrew Jackson, that Americans didn’t get poorer under Democrat leadership. FDR was a complete disaster economically; Bill Clinton never enjoyed control of the house and Senate, Joe Biden and Barack Obama did enjoy this, and it’s the root cause of poverty in America because almost all of their dumb, extremely EXPENSIVE economic ideas get made into law.
Joe Biden did get the most votes in U.S history; it would be a shocker if everything reversed in 2 years, so as a Bitcoin investor, you’re going to want to pay close attention to the Mid-term elections. Because the entire planet is heavily dependent on the U.S consumer if the U.S consumer has fewer dollars to spend on disposable things, there’s a chance they might start selling things they don’t need, Bitcoin being one of them.
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Interesting times ahead!
