This chart shows how FED assets are dragging up, or melting up, or better yet cracking up, stock prices, and real estate prices. A crack up boom happens when inflation is high enough, for long enough that asset prices crack up, then crash hard in a deflationary crash. FED assets are bonds the FED buys for the reverse repo market, QE, plus the real estate blackrock is buying with FED money as well. Blackrock now owns 15% to 20% of homes sold in the US in 2021. They are putting them back out for rent, due to 1.4% interest rates, they get from the FED. Far lower than consumer rates. Blackrock is the largest institutional investor in the US. Therefore, any significant increase in bond yields (leads to interst rates climbing) will have a ripple effect in both real estate and stocks. See the chart below:
This next chart shows German Marks needed to buy one ounce of Gold 1919 through 1923. The Weimer Republic years which later led to Nazi Germany. This chart perfectly represents a crack up boom, currency hyperinflating, costs of investments also hyperinflating in value as the value of the currency devaluates rapidly. Is this going on in the US? Remains to be seen as of yet. Here is the chart:
It will take a few years to play out. However, we see higher gas prices, home prices, food prices, transportation prices continuing to rise for the forseeable future. All signs point to a crack up boom. It’s just a matter of will this be stagflation or hyperinflation that is the question! We still see a major stock market crash coming soon. What will that do to inflation rates? Raise them. Not just increased inflation in the US, but globally. Below is a chart on global inflation rates, US is ranked ninth in the World in terms of inflation:
Governments always fudge numbers to not look as bad as they really are. Inflation, Unemployment, Household Income. There is obvious political motivation to do so. Yet, hyperinflation is certified at 50% inflation per month! 10% inflation per month would feel like hyperinflation. Goods and services prices doubling every 9-10 months. 5x that would be every 6 to 8 weeks prices doubling! Either way, the US could get to a real inflation rate of 120% at some point. How fast is the only real question.
Another aspect of the potential for a crack up boom happening in the US, is the trade balance. Below is a chart depicting the trade balance nose diving in a major way. That is catastrophic:
Other countries importing goods, food, raw materials, construction materials into the US. As supply routes are being cut off by exploding fuel prices due to all the shut down pipelines in the US. If vaccine mandates as written, actually go out to all businesses under 100 employees by January 4, 2022. Half of all US truckers will walk off the job. What will that do to the raw material crisis? Inflation? The crack up boom. Perhaps this stock market crash is delayed until this affect ripples into the market in early 2022. Even if that does happen, a crack up boom in November or in February, March next year is still catastrophic! Bitcoin is the life boat, the escape hatch.
Two Bitcoin charts to show you where we are this week:
First, the short term chart. It shows a break out or a break down is eminent. The break out target is $70K. The break down target is $58K. Thanks to MM Crypto for these two charts. Here is the short term chart:
Second, the long term chart. It shows the eleven year resistance of Bitcoin bull markets about to be broken. Notice the upward pressure from higher lows, creating an ascending triangle. Those break out to the upside most often. We see little or no chance that the current price levels are the actual price top for this bull market. If Bitcoin is going to break out of this short term consolidation and make the next leg up, it will happen soon. In the next few days. Here is the long term chart:
We know Bitcoin has consolidated after each leg up, and leg down, during this bull run. It’s been almost two weeks of consolidation since Bitcoin created the new all time high on 10/19. Patiently buy each dip, remember, nobody knows when the next pump will happen. Just be ready for it! Hedge inflation, decentralize, and stay humble.
Neutral ATM buys and sells Bitcoin as little as $20 at a time! You do NOT have to buy an entire Bitcoin. Neutral ATM is here to get everyone off of zero Bitcoin.