Hi HODLers and Hiveans,
Debt, Debt ceiling, inflation, jobs opening, layoffs...
We are overwhelmed by the amount of data and scary topics coming up in news recently.
I am just going to discuss a few points to give you a snapshot at the situation.
Debt Ceiling
The United States have a budget limit that they need to stick to. This is actually a great thing as it brings up debate on debt level and public spending. The debt ceiling is around $31bn actually.
Democrats and especially Yelen have tried all they could to delay a lot of payments but they will be hitting a wall in the next weeks.
This is hard coded into the US Budget. As long as it is not voted, there won't be a $ more spent.
For most of us in the CryptoWorld, I first came in the space with the monetary argument. If states can just print money out of thin air, why would I value this? It isn't backed by anything. Bitcoin talked to me as it was backed by computer power and algorithm and couldn't be inflated away.
State of the economy
The US economy is still very strong but as you will be able to see below. Jobs openings are slowing while layoffs are slowly increasing. This is a cocktail to put pressure on workers to accept lower wages => less inflation.
My personal view is that interest rates will be raised 25 bps tomorrow by the FED but won't go much higher.
The worst of inflation is behind us, US consumers have low savings, high credit card debt and will have to reduce their extra spending going forward.
What am I doing?
I am putting my traditional savings into Bond Funds. I try to lock interest yield between 5-6% as I expect inflation to recede and these will perform well if interest rates stay stable or are cut if there is a recession.
Cryptocurrencies in that environment will probably not fair so well. Bitcoin might as it is a safe haven and could be use to fight debasement of our FIAT currencies.
Ethereum through usage is almost deflationary so it should also fare well.
The rest of the industry will have issues as they are risk-on assets and mostly burning cash. I will be careful with Tier2 and Tier3 projects.
What are you doing?
Stay safe out there,
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