Late Stage Socialism: Economic Deflation is here and Consumer Price Inflation is still running rampant-Currently Bitcoin is struggling to find new buyers, and Progressive are at war with Fossil Fuels – May 9, 2022,
An argument could be made that progressives are responsible for changing the narrative on racism, sure it was the capitalists who wanted to get rid of slavery, being that a lot of white labor to this very day for the most part still wants an artificially high wage and government protections from non-white people who might drive wages down, but that’s another topic for another day.
Let’s today focus on why consumer price inflation is running rampant and how that affects the price of Bitcoin. Now I can only speak from personal experiences when it comes to Bitcoin, which as of the time of this post is about $31,000USD-Down from as high as $60,000USD. So it’s important to remember that the rise in Bitcoin coincides with Zero Percent Interest Policy.
Bitcoin is nothing new, blockchain technology has been around for some time now, but as we know technology is inherently deflationary. What is new is keeping interest rates artificially suppressed for almost 20 years, to save the stock market from collapse. Saving the stock market from collapse has been good for 2 asset classes, real estate, and Blockchain. Personally, I think real estate is still viewed as a money pit without zero interest rate policy.
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Sure there are many who can profit from real estate in up and down markets, but this isn’t very common, most people shouldn’t be in the real estate market, because the properties they hold can’t cash flow. With bitcoin, unlike with real estate, what does it do exactly? It’s software, correct? Well, software evolves, and if Bitcoin evolves one has to ask what will it evolve to? What type of service will bitcoin software provide the market that can’t be done better?
Sure nobody cares about what Bitcoin does when they imagine the price in U.S dollars will hit record highs, but what value is there in Bitcoin if the price is in a bear market? The only answer I can come up with is to buy now that the price is low so it can be worth more in the future? Part of the Progressive schtick is to charge higher prices for energy, well Bitcoin clean or dirty consumes a lot of energy, I bring this up because if Bitcoin goes into a bear market, the stability of its blockchain is at risk, because remember, energy prices are going up in most parts of the world, which means the price of ESSENTIALS is going up also.
If the value of bitcoin continues to crash, why hold it if you haven’t made any money and you’re potentially underwater? Now, what most people fail to comprehend is that Consumer price inflation is ECONOMIC DEFLATION. Because the government has control over the money supply when it uses its central bank to provide liquidity so it and the private sector can borrow money more cheaply, to save face, the government instead of freeing the market will often create even more regulations.
When candidate Trump was running for president, I got excited when he said that he would renegotiate America’s debts, which would have been the wise decision to get all of the froth out of the markets, instead, Donald Trump embraced the ever-increasing returns in the stock market and even developed a cult-like following.
I bring up Donald Trump while Joe Biden is the president, because although Joe Biden is to blame for this economic downturn if Donald Trumps’ popularity holds and he repeats the mistakes he made from 2016 to 2022, he may actually prolong what looks like a modern great depression. A great depression n 2022, impossible you say? No, I think it’s very possible, you have to understand that supply chains are breaking down as I write this and Joe Biden isn’t budging on his war with fossil fuels.
These added regulations are Bidens’ way to attempt to force the markets to come up with an alternative to fossil fuels. But you see, even if that were to happen, what Biden and most of the market don’t understand is that if they want COSTS to come down, austerity measures will have to be all the rage. There is NO appetite for austerity measures, right now, which means that some sort of FINANCIAL stimulus is more than likely coming.
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Now when it’s APPARENT that the economy is deflating, the U.S could very well, lose its position as the world’s reserve currency, because fewer people will be able to profit from the U.S economy. Stimulus spending is actually a misallocation of resources because as an example Donald Trump’s stimulus put money in a lot of the wrong hands, most of the people who get free money from the government had parties, went on vacations, and ofcourse bought BITCOIN.
When you destroy the integrity of money, you also get fewer people willing to work for it. As of the date, I’m writing this, there are a lot of people who LEFT the labor market, why? Because they’re waiting on government stimulus, to potentially buy more bitcoin. Based on the scenario that I see happening, once this new round of stimulus happens, I expect Bitcoin to serge, but I also expect the price to nose dive, soon afterward, why? Because the economy is DEFLATION and it’s costing people more money to purchase fewer goods and services.
In my opinion, the economy is ALREADY in recession. If the economy is indeed deflating, consumer behavior is ALREADY changing, now, I expect the media will downplay what’s actually happening, and I expect coverts to change how recession data is calculated, basically, government and media will do everything in their power to push wealth effect news, but if you’re lucky enough to be ready this, you should know that stimulus is likely on the horizon and it’s NOT going to work this time.
I expect Bitcoin to make a last hurrah, once the stimulus happens, but what I also expect and this is what people are ignoring is the price of Gold going on sale before it goes on a TEAR! The perfect conditions for gold appear close. But here’s the thing, I expect until stimulus spending for gold to sell off, why? because people are running out of money. Just like Bitcoin a lot of people borrowed money to buy their gold.
You have to remember most of the U.S dollars in circulation are debt derived, but the real problem in the economy is the excessive REGULATIONS on the most productive members of society. Once you comprehend this and also comprehend the FIXED costs of running a lot of these bloated western governments, you’ll start to comprehend my AUSTERITY MEASURES arguments.
Until I see most people openly talking about shrinking government, know that the economy is going to continue to deflate. It COSTS too much money to be productive in this Progressive economy and until there are politicians brave enough to cut government, we’ll be in a deflationary cycle. Now when some think of deflation they imagine lower prices? WRONG, if private businesses can’t make a profit, they will ease change their business model or cease operations.
For example, potato chip companies might make their chip bags smaller and charge the same price, companies that manufacture locally might decide to outsource, companies that are in too much debt might sell or declare bankruptcy and the new buyers may completely change how the business they bought operates. Where does Bitcoin come into all of this? I don’t know, we’ll have to see, but as a decentralized software entity, Bitcoin will need to find an identity sooner than later, that can find its use during periods of economic deflation.
One of the reasons I call this period Late Stage Socialism is because we’re entering an economic phase in which people will soon be reminded why socialism NEVER works!
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Interesting times ahead!