The Fed Just Broke Crypto
investors are hoarding cash at the highest rate in a decade. The housing market sentiment is at an all-time low and the Fed just dropped an absolute bombshell on crypto. There is a lot to talk about in today’s article.
Let’s get into it. If we go ahead and look at the home purchase sentiment index it becomes very clear that the average investor is not confident at all right now in the real estate market. And there is a really good reason for that.
The real estate prices for the last couple of months on average have been declining on a pretty large scale all things considered. And that’s not going to be slowing down anytime soon. More and more investors are holding on to a ton of cash and just waiting for the markets to bottom out and well if real estate is going down,
the stock markets and the crypto markets are going to be quite a bit more volatile than that. So let’s see what the average investor is thinking and what’s most likely to happen here through the graph
of the implied cash allocation by nonbank investors globally. This factor in all financial markets across the world, not just in the United States. And what we can very clearly see is most investors are holding a lot more cash than they were previously.
Obviously, if we go back to the nine insanity that we did have, investors were holding quite a bit more cash back then. But as you can clearly see from this chart right here, it is just going straight up.
More and more people are starting to hold cash as they very quickly start to realize that we’re most likely going to see the markets continue to churn more and more bearish as time progresses. Inflation is not being tackled at the rate that we would like and interest rates are only going to be continuously going up from here.
So naturally, it makes sense that people are bearish. We’re already seeing the real estate markets go down and with no clear end in sight, people are just waiting now for the market to bottom out
we have a pretty decent timeline on when that is most likely to happen. Most banking analysts agree that the market is most likely to churn bullish once the Federal Reserve pivots off of its very high-interest rate hikes,
which of course makes a lot of sense. Naturally, the more money that the average consumer does have, the better off they will be when it comes to actually have extra expendable income to use on investments.
And well right now is not that time because we still have interest rates that are going to be risen up to most likely into the new year. So we’re most likely not going to be seeing a rally until someway midway into 2023.
But naturally, because of course, the markets are having a lot of pain in the meantime, that leaves us as investors a lot of opportunity to continuously dollar cost average and make a good sum of money when the markets do turn bullish.
Ironically though, North America has it the best out of most other developing nations. In fact, the US dollar
has been gaining a lot of value relative to most other countries. I mean, just go ahead and look what’s happening right now in the United Kingdom with their ongoing energy crisis and absolutely insane inflation they’re seeing for consumer goods.
And look at China. The real estate market completely collapsed and sent ripples across the entire economy because it’s so closely tied to real estate and it’s only getting worse in all of these other developed nations across the world. We have it relatively good in North America, which is saying quite a bit because, well, it’s bad here and with the rest of the world economies most likely only to experience more pain as well.
It makes sense that the United States will still be leading the Pac but still also of course seeing a lot of pain and devaluation for the actual US dollar itself. And well yeah, we have to be prepared for this.
We have to continue powering through these markets and going ahead and saving as much as we can. And honestly, yeah,
I understand why most investors are holding on to a lot more cash now and staying out of investments. If you’re going to see five to 10% declines every single month and the US dollar is strengthening, yes,
it makes probably a lot more sense to hold on to the US dollar and wait for things to bottom out. So that’s exactly what I am doing. But I want to know what are you guys doing right now.
Are you also going ahead and holding your dollars and waiting for the markets to bottom out or are you investing in something specific? Let me know in the comments down below. Smash the like button if you did. Enjoy the video and I’ll see you all in the next episode. Peace.