Fortunes are made in bear markets

Fortunes are made in bear markets
Fortunes are made in bear markets

Original twitter threads by Jake Yocom-Piatt

Seeing all this doom and gloom from the crypto domain is funny. the fed put should have died in a fire long ago, but has been zombified as a result of a competition between The United States and China to see whose economy will contract first.

The extent to which developed state Central Banks have painted themselves into a corner is a huge opportunity for cryptocurrencies.

The nonsense justifications for bulk credit issuance only bought them a few years. The bulk credit issuance lead to an overheated US economy, which is now manifesting runaway inflation. Even Covid19 and Russia’s invasion of the Ukraine can't mask the fact that Central bank policy for the last several decades has been beyond stupid.

With the economy weakening while FRS federal funds rate was 0.25% in late 2019 into 2020, bulk credit issuance was the supposedly-kneejerk reaction to covid19. FRS now must either allow inflation to run hot by not hiking rates fast enough, or must aggressively hike volcker-style to get ahead of inflation, causing a recession/depression. 0.75-1.00% target rate hike will do nothing to get ahead of inflation. CPI is rigged and inflation is more like 15-20% right now.

If interest rates go much higher, we will start to see attrition amongst US and foreign zombie corps that live on low-interest-rate debt. this will surely trigger an economic contraction. The expectation that asset valuations will monotonically rise forever has always been delusional and it will soon be time to pay the piper.

This is the dumpster fire moment for Central Banks! Consumer sentiment is bad because Central Banks have messed up so badly and seeing JP Morgan’s government bond rates jump, i.e. yield curve control imploding, is a hugely bullish sign for cryptocurrencies.

Plan of action

Central Banks have sustained their ponzis for decades on hot air and mortgaging the futures of their citizens. Anyone who expected cryptocurrencies to rise before the era of Central Banks central planning ends wasn't paying attention. Many individuals and corps investing in cryptocurrencies have also been investing in typical fiat investment products, so they end up correlated as investors sell across their portfolios.

Fortunes are made during bear markets, not bull markets. Tighten your belt and be ready for the psychological strain of negative price action. Crypto markets have distinct cycles and if you succumb to psychological strain, you will just be another body on the river.

The revolution will not be a smooth ride. This is why I Decred!