Dubble Bubble Pop!

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Publisher of various content from the Archive

3 years ago

In community: Cryptocurrency and Blockchain(7b7f)

Topics: Cryptocurrency, Bitcoin Cash, Bitcoin, Blockchain, Crypto, ...

(The Archive: Article) The crypto bubble is inflating. Bubbles are also blowing upwards in financial markets all over the world - largely due to money printing. In this article, I want to share a theory according to which the stock market's crash will get blamed on cryptocurrencies. This article acts as a form of follow-up on my previous: Bubbles, Pyramids and Logarithms, where I explored some of the current bubbles.

"Never let a good crisis go to waste" --Winston Churchill

The Current Bubbles

The current bubble is still forming in the crypto markets and in the stock market. Some authors have argued for years that we are in the everything bubble. You can take for example Peter Schiff, who has been advocating for gold for many years by telling us of the coming collapse. Micheal Pento has also been quite an author regarding those topics with a publication such as: "The Coming Bond Market Collapse". He regards bonds as being in a 30+ years bull cycle. And that looks like a bubble if you ask me! I agree with both authors on their views.

It is important to understand how the current money printing extravaganza has enabled those bubbles in assets to form in the first place. What I mean is that when a central bank for a given country prints money, it steals purchasing power from each other unit of that currency in existence. Thus the currency is worth less and thus more units of it are required to buy good and services (and stocks and houses and crypto...)

I do not want to go in the details of each current bubble as they have been written about ad-nausea previously. Here is a list:

I could have gone on and provided tons of different articles and interviews all regarding the same discussions. Instead, what I am interested in here, is to examine what could occur when the crypto bubble pops at the end of the year.

(Above: Christine Lagarde, European Central Bank's President, addresses an audience about the dangers of bubbles)

"You never know you're in a bubble until it pops." --Andrew Revkin

The Pop

Bubbles pop. It is their inevitable destiny. No bubble can inflate forever and the one that is building up in cryptocurrencies will pop around mid-December 2021. This is my theory and nothing here should be considered financial advice.

The cryptocurrency bubble will burst first and right after, the stock market will also violently correct. The stock market's correction will be both as a natural contagion effect of deleveraging (crypto margin calls will force stocks to be liquidated.) So I do envision a natural falling dominoes effect.

But at the same time, the stock market crash will be engineered to be: Steeper, deeper and more importantly, not too deep nor too long. What I mean is that the stock market's correction will be managed. In the world of money printing, a central bank can always summon up trillions of new units to buy whatever stocks. They are willing to do this for the stock market, not for the crypto market. Again, if you haven't read my previous article where I discussed the management of crisis by central banks, I encourage you to go read it.

What I am discussing here is crypto negative, as you can imagine. I love cryptocurrencies and I fully believe in the revolutionary potential of blockchains. That potential is already partly realised. But what I am saying is negative because I say that not only will the crypto bubble burst, I am saying that some actors are waiting for that opportunity to engineer an even bigger crash.

(Above: Jerome Powell - Pictured while arguing about the need for more stimulus)

"Life is too short, too precious, too painful to waste on worldly bubbles that burst" --John Piper

The Aftermath

The crisis I was referring to in the introduction of this article is of course the crisis that will ensue from the stock market taking a nose dive. That will spell panic for many of the retail, baby-boomer generation, who now hold most of the wealth in the stock market through their pension funds. Any panic selling will only accelerate the fall, as is always the case in a deleveraging event.

Part of the motivation behind the "enabled" stock market correction is the blame game. Simply put, central banks, governments, banks, crypto averse investors and the likes want to put the blame on cryptocurrencies in general. This is a perfect culprit because cryptocurrencies have a history (often on purpose) of being outside of government control. So for authorities to sway public opinion in their favour they must help to engineer a collapse.

This will allow those establishment and state actors to endlessly promote more surveillance, regulation, laws and control over crypto-currencies in an effort to "protect the investors".

Another motivation, of course, is to justify the further monetary debasements and to explain why the economy has not recovered. That talk will be all over the news at the start of 2022. They will talk about the "crypto crash" and its consequences and will compete amongst themselves as to who can push more regulation the best.

Anti-crypto advocates will be happy and call for an outright ban on everything crypto. Everything will be blamed on crypto and the solution provided will be more money printing, more regulation and more surveillance. In a dark twist of fate, authorities will justify their own Central Bank Digital Currencies (CBDCs) as a sound and secure and transparent solution. The irony could not be bigger.

The event will become known as "The Financial crisis" and maybe even be dubbed for easy future reference by some as "the Great Crypto Crisis".

(Above: Janet Yellen - Treasury Secretary of the USA at work while giving a speech for the Brookings Institute)

"Double, double, toil and trouble; Fire burn, and cauldron bubble!" --William Shakespeare

Coming Up Next

With my theory fully exposed for the world to read, I can now continue my literary exploration. I was bit when I was a teenager. Not by an animal but by a literary predator by the name of Anne Rice. After that event, Lestat would show me the path. Subscribe here so you don't my next publication.

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