My Thoughts on Tech Stocks in a Normalized Interest Rate Environment (Technology/Innovation has always been Deflationary) – April 8, 2022,

There’s one plus side to Joe Biden and this might be because Joe Biden is ignorant of the consequences. But the 46th President of the United States Joe Biden has said openly that he won’t tell the Federal Reserve what to do with Interest Rates. Now, obviously, if the Federal Reserve starts aggressively raising interest rates while Joe Biden is president, he has the Federal Reserve to blame, furthermore, I’d back Joe Biden if he blamed the damage interest rate hikes are having on the economy are the result of Donald Trump’s INTIMIDATION or politicizing of the Federal Reserve.

First and foremost for all the Donald Trump apologists, nobody forced Donald Trump to run for President, anything that happened to Donald Trump while he was President comes with the territory. With that said, when Jerome Powell was aggressively raising interest rates, Donald Trump openly and continually complained about higher interest rates, while simultaneously claiming to have the best economy in the history of the world?

When Trump got stuck with Covid-19, via low-interest rates, Donald Trump bailed out Wall Street, sending Americans checks in the mail? By hook or by crook, Joe Biden wins the 2020 election, Democrats are known to spend and regulate, Joe Biden wins a majority and does what Democrats do, and because Donald trump basically had Democrat economic policies as President, Joe Biden merely regulated the economy, opened the borders and attempted to spend more.

Now, from an economics perspective, Joe Biden is a disaster, he’s clearly an economic idiot, and a rising interest rate environment is going to destroy his presidency. I genuinely think we’re living in historic times and Joe Biden could legitimately go down as the WORST President of all time.

I find it interesting that everyone finds social media so important all of sudden, recently, Elon Musk took a financial position on Twitter, and people on “The Political Right” are going crazy with excitement. I’m sorry, but I still see social media as a passing fad, that young people for the most part control. Politically active young people aren’t cool. sure they have followers, but they’re behind the curve not in front of it.

he cool people HATE politics, Barack Obama and Donald Trump were both rarities in politics, politicians are usually boring people, that nobody cares about. What I see right now, is potential economic deflation, if the Federal Reserve is genuine when it states that it’s going to try to tackle inflation. Because Joe Biden is doing such a horrible job, and will likely lose the mid-terms, now would be a good time for Jerome Powell to strike HARD.

If Jerome Powell aggressively raises rates moving forward, everybody wins, the Republicans take back the house and senate, Joe Biden has people to blame for his failures and some sanity can come back to the marketplace. Tech stocks are severely overvalued, and in my mind I see a serious crash coming to big tech. I used to use Twitter and Facebook, I don’t anymore, I consider both junk that offers little to no value.

As an ADULT I do see value in LinkedIn, for younger people, they all will flock to the hot new APP that represents their generation, Twitter, in my opinion, represents old people with too much time on their hands, I think a lot of old people use it because they probably bought the stock and like the political debates, but again, for me at least I think there will come a time, in which nobody cares who said what on Twitter.

Worst than that I think other tech giants are going to see their values vanish as reality comes to the marketplace. I’ll only believe in Big-Tech if it holds its value during a normalized interest rate environment. Most of the people I know who invest in tech stocks are rookie investors, this even includes, the people I know who hit it big with Bitcoin. A lot of these people, have no financial education, and have no desire to seek out financial education, because they hit a homerun, and imagine Zero Percent Interest Rate policy(ZIRP) as a permanent fixture.

They could be, right? But I don’t put my trust in Central Banks, what people don’t understand about this economy is that money isn’t being PRINTED, it’s being borrowed and the higher consumer price inflation gets, the harder it will be to SERVICE debts, furthermore, ZIRP also equates to stupid politicians appearing to be smart. Now, although Donald Trump understands the correlation between cutting regulations and economic growth, Donald Trump couldn’t stomach not being liked.

If Donald Trump is the 47th President of the United States, you should already have an idea of what to expect if he becomes President again. Low-Interest rates create Joe Bidens, The Justin Trudeau, these idiots appear smart, because the money they borrow is basically free, or at least it seems free and whenever they regulate the economy, the damage is slow-moving. With all of the regulations Joe Biden and Justin Trudeau put on the U.S and Canadian economies, I’m surprised inflation is still as low as it is.

Consumer price inflation however is a BITCH, the higher prices go, the more the economy will DEFLATE. Most people don’t understand that when people have to spend more money to purchase fewer goods and services, this equates to DEFLATION. Now, why are prices rising? Well, regulations on the economy make goods and services more scarce.

The mask mandates as an example equate to employees wanting a pay raise, the carbon taxes and regulations on the fossil fuel sectors, equate to higher operating costs, as energy producers now have to adhere to additional regulations created by the government. How this hits the tech sector, is because the technology is deflationary. I am not paying a premium price for OLD technology. As a young person, I don’t want to be on Twitter, because mom, dad, grandma, and grandpa are on Twitter.

Now sure, Twitter and Facebook have expanded, but so have the youth, and the only time the youth are relatively trapped is if as an example they’re forced to use “square” to complete a transaction, but there’s even competition for Square, with BITCOIN AND OTHER CRYPTOCURRENCIES, which by the way will also be tested, because let’s call it for what it is, the prize in crypto is blockchain, not Bitcoin. That will only become apparent if the price of Bitcoin were to ever fall like a stone, which could be possible in a normalized interest rate environment.

You have to remember a lot of people liked leaving their money in the banks and collecting interest. During a normalized interest rate environment, dividend investing gets even better, because private companies will then have to compete with private banks for capital, if Bitcoin doesn’t rise in value, it becomes a drag on your portfolio. This is why I say, I’ll know the value of Big Tech if interest rates are normalized!

Interesting times ahead!