Time in the Market
               Not Timing the Market

DOLLARS, DEBTS, AND DIGITAL GOLD: IT’S NOT PURE IMAGINATION

There is an art and true artistry to accumulating wealth. Still, without knowing the genesis and strategic management of ‘Printing it,’ you’ll never truly be able to become one of the Masters, much like finding the golden ticket in a Wonka bar opens a world of wonders..

As I’ve consistently emphasized, ‘Statistics is the Grammar of all Science,’ and with that in mind, it’s becoming mathematically evident that excessive manipulation of monetary systems could lead to the catastrophic implosion of the entire financial structure. Now to many, they’ll stop reading at this point and think this is dramatic, but those who continue will understand the gravity, much like Charlie did when he first stepped into Wonka’s world.

While this is not a surprise to many, it’s surprisingly concerning why more and more people don’t see it, or it’s even being talked about in a broader scale because the numbers don’t stake up ( Math Nerd Here )

Having a rather unhealthy appetite for Macro Economics gives me a healthy perspective to prepare for such an event, which will catch many by surprise, especially a new era, often cloaked in the guise of painful endings ( Distractions ).

The prevailing sentiment among many financial experts suggests that unrestrained money creation could trigger hyperinflation. However, this becomes a complex scenario when dealing with a global reserve currency. Instead of hyperinflation, we witness an unusual surge in asset prices, effectively mitigating the risks of a significant economic downturn. This situation leads to a steady decrease in how much people can buy with their income over time, especially compared to the rising values of houses and stocks.

Looking ahead, there’s a real risk of a financial crisis worse than 2008. What could cause this? The constant creation of money by central banks worldwide is a likely cause. These banks have trapped themselves by making too much money and getting into debt. Now, they must keep making more money to pay the interest on their growing debts. This dangerous cycle of increasing debt is getting out of hand..

Drawing upon years of macroeconomic study and observation, I can assert that the system is teetering on the brink of massive disruption. So in the words of Willy Wonka, ‘Come with me, and you’ll be in a world of pure imagination,’ because it’s a formula of a well-kept secret.

But what’s the solution to this upcoming crisis? We need a new financial system that fixes current problems, like using cryptocurrency. If you’ve been following this blog, you might remember the article from February 2023, ‘CBDC Pegged To A Nation’s Gold Reserves: The Only Road To Independence,’ where I discussed this idea.

Since the 2008 financial crisis, every major developed economy has seen its national debt soar to over 100% of its GDP. Concurrently, interest and economic growth rates have stagnated at around 2%. This situation poses a daunting question: who will shoulder the enormous private sector debt exceeding 100% of GDP in every major economy?

In response to this dilemma, central banks began transferring this debt onto their balance sheets around 2008. However, this approach only delays the inevitable. The growth of these balance sheets, alongside the accumulation of interest payments, follows an unsustainable trajectory. Without a significant overhaul of the GDP formula, the global economy remains trapped in a cycle where incessant money printing exacerbates wealth inequality. Amidst this chaos, technology and cryptocurrency emerge as two assets with the potential to outperform in this turbulent environment. Which makes me smile, of course

Despite the looming threat of a market collapse, central banks’ efforts to debase the currency have artificially inflated stock markets, preventing a total system failure. Yet, this creates a series of ongoing issues. Governments and central banks, for instance, are championing narratives like the green energy revolution to stimulate economic growth. Which isn’t a criticism; I’m pro-green than anyone. I’m pointing out a narrative on how money will be created to balance some books.

Economic growth is more and more driven by automation and AI, which are taking over jobs from people. This change might be worrying, but it could help significantly overcome the issue of slow economic growth as the number of people in many countries is decreasing.

Experts, like those at Oxford University, believe we might be close to a considerable change in the economy where the world’s total income could double very quickly because of the increasing use of robots and AI. This marks the start of what some call the ‘exponential age’ – a time of fast technological progress.

Realizing the impact of this ‘exponential age’ has changed my view. Instead of expecting an enormous financial crash, I now see significant economic growth possibilities. The steady and long-lasting growth in technology and cryptocurrency supports this view.

In summary, we are witnessing the emergence of a novel economic structure driven by technological innovation and new financial systems. This transformation presents its challenges but also offers unprecedented opportunities for growth and advancement.

The downside, as some argue, is that the excessive use of monetary policy creates persistent inflation, necessitating higher interest rates. However, my experience through various periods of high-interest rates has shown that asset prices continue to rise regardless. The key factor is the rate of change in interest rates – markets react unfavorably to sudden, steep increases.

Even if interest rates stabilize at 5% over the next decade, this will unlikely deter investment in technology stocks. The reason is straightforward: these stocks’ return on investment (ROI) is significantly higher than 5%, making them an attractive proposition for investors. This dynamic underpins the resilience of the technology sector, even in the face of economic headwinds.

Moreover, the growing influence of cryptocurrencies cannot be understated. Cryptocurrencies offer a decentralized alternative to traditional financial systems, characterized by transparency and reduced reliance on central authorities. Their integration into mainstream finance is not without challenges, but the potential benefits – including increased financial inclusion, efficiency, and security – are substantial.

One of the critical issues facing the current financial system is the concentration of wealth and power. The advent of cryptocurrencies and blockchain technology provides a means to redistribute this concentration, fostering a more egalitarian economic environment. While cryptocurrencies are not without volatility and risk, they represent a paradigm shift in how we conceive and interact with money.

The environmental implications of these technological advancements are also significant. The shift towards green energy and sustainable practices, driven by governmental policies and consumer demand, reshapes industries. Companies that adapt and innovate in line with these changes are likely to thrive, while those that fail to do so may need to catch up.

This evolving landscape presents a unique set of opportunities for investors and entrepreneurs. Those who can navigate the complexities of this new economic era, understanding the interplay between technology, finance, and environmental sustainability, benefit greatly.

So as we enter this new era in finance, it’s essential to stay alert and flexible, ready to embrace the unexpected twists and turns, much like a tour through Wonka’s unpredictable factory. The future of finance isn’t just about earning money; it’s about grasping how technology, the economy, and society work together.

Those who can understand and adapt to these connections will do more than get by – they’ll flourish in this rapidly evolving world, much like those who embrace the wonders of Wonka’s creations.

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