Sorry for those of you received this twice! I accidently sent before finishing the edits!
Hey there, friends!
We're back at it again, cracking the code on all this financial stuff. Remember, we're in this together, breaking down the fancy jargon and making this whole money thing make sense. Swing by my NOSTR page, or my Twitter(X) - I keep the conversation going there with more insights and real-time updates.
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That being said, today we're going to talk about the exciting times we are in...
The last couple weeks have been pretty exciting, therefore this article is a little longer than my usual shtick, so I’ll give y’all a TLDR first. That being said, it’s jam packed full of really good info, if I may say so myself, and it’s worth a full read if you are trying to make the best financial decisions for you and your family.
TLDR: IMHO, the stock market is going to melt up, then crash hard. The Bitcoin market is going to face-melt up, then (maybe) crash hard. The Real Estate market is going to slow-melt up, then plateau. The dollar (DXY) will strengthen in the global recession but long term it’s pretty fucked. In 20 years, the global economy will be dramatically different than it is today.
OK, that’s a lot to consider. Let’s break it down…
The Stock Market
A "melt-up" scenario refers to a broad and rapid increase in stock prices driven more by investor sentiment and fear of missing out (FOMO) than by fundamentals. Think of the Dot-Com bubble of the late 1990’s where everything pumped (not just internet fad companies) and the NASDAQ Composite index, which rose by 582% from 751 to 5,132 from January 1995 to March 2000.
Since the financial crisis in 2008, the NASDAQ rose by 582% from 1582 to 19,245 as of today. Thats a whopping 1,216%! (Albeit in 15 years rather than the 5 years from the prior melt up). In the graph below, you can see the covid impact, but due to government stimulus, no major corrections with staying power have been allowed to happen.
This doesn’t mean anything on its own, but let’s explore some more. Here are some reasons I feel like a stock market melt up is once again likely happening:
Excessive Liquidity in the Market
Central banks globally have pumped substantial liquidity into the economy over recent years.