Crypto Carnage And Market Mayhem Foreshadowing The ‘Mother of All Collapses’ to Come
The comments below are an edited and abridged synopsis of an article by Mike Adams
The claim that crypto is digital gold has collapsed. The LUNA token turned out to be entirely unstable, collapsing to zero after a massive hyperinflationary creation event (combined with a redemption/selloff factor) that plunged into a death spiral last week. All LUNA investors are completely wiped out, and the idea of a stablecoin has taken a hit.
Crypto is a technology with many advantages, but it is not a store of value. For that, buy physical gold and silver. Crypto is for transactions, not savings, and crypto holders have been advising people to hold their coins (not sell) because that was the only way to keep the Ponzi scheme intact. But if the value in crypto depends on nobody ever redeeming it, then there’s no depth to that value.
Bitcoin is down from its high, and that is psychologically jolting to crypto investors who believed that crypto would go up forever, never facing corrections or reality checks.
But crypto isn’t the only bubble. We are in the ‘everything’ bubble, with only gold and silver representing a bargain. The bubble is epic in scale and will be devastating in its unwinding. No bubble in history has been this large and widespread, and no crash in history will compare to the one that’s coming.
Crypto is not a safe haven from crashing stocks. In fact, the downward trend in crypto appears to be strongly correlated to the selloff on Wall Street. As stock traders get margin calls, they sell off crypto assets to meet the margins on plunging stocks. This turns into margin calls in the crypto space, which accelerates cryptos’ downward spiral.
This is why the Fed will be forced to reverse course and drop interest rates while flooding the market with new liquidity by buying stocks, bonds and everything else. The Fed’s balance sheet will explode in size, the opposite of what it’s trying to accomplish. The Fed realizes that even a nudge to interest rates can crater this fragile stock market. It’s only a matter of time before it reverses course, which means hyperinflation. That means the stock market will skyrocket one more time as the Fed injects more liquidity, but it also means the final crash will be much worse than it should have been.