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100 sats \ 2 replies \ @faithandcredit 8 Sep 2022 \ on: Daily discussion thread
Real talk: The ECB raised rates today. And its rising at an alarming rate. Its probably a coincidence, but they let everyone borrow money at increasingly lower interest rates over the last decade. This money has made its way into the pockets of the elite by now. The middle class just have debt and "assets" now and the rising rates will are likely to cause most assets to drop in value. If you were an evil genius and wanted to extract as much value from the European middle class as possible as fast as possible that's how you would do it imo.
Correct. They won't stop until they cause chaos. In the Sovereign Individual, of which I have a summary here on StackerNews, the playbook is as follows:
- The economic consequence of this transition crisis will probably include a one-time spike in real interest rates. Debtors will be squeezed as long-term liabilities contracted under the old system are liquidated.
- Governments facing serious competition to their currency monopolies will probably seek to underprice the for-fee cybercurrencies by tightening credits and offering savers higher real yields on cash balances in national currencies.
- Higher real rates around the world will spur liquidation of high-cost, unproductive activities and temporarily reduce consumption.
- The deflationary environment may drag on for some time, with more adverse consequences in the high-cost industrial economies of North America and Western Europe than in the low-cost economies in Asia and Latin America.
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For many people with traditional portfolios they should work-out how to short the market. Nasdaq and S&P500 will be down another 50% in 6 months time. Many many companies will go under. There are many inverse products out there and many zombie companies to target.
Your Bitcoin stash is all well and good, but being on the other side when stonks and asset prices collapse at the fastest rate in history is going to go someway to offset the decreased standards of living in the coming years. Arthur Hayes' post about having BTC as an exit is spot-on but having some fiat to play around with will also help significantly. Not even brrr can stop this in the next 6 months. Governments are actively driving the economy into the ground for now, under the cover of 'getting inflation down'.
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