Where Do We Go from Here?
I Was Right
On August 22, 2020, see my blog post Financial Freedom: Investing 101, I stated that the economy was ripe for building wealth via the economic cycle - I was right. Later, I stated in my book Strong and Happy that the FED, for reasons unknown, flipped the pandemically damaged economic cycle on its head by instituting negative interest rates. My advice was to not base your investments on the economic cycle until the economy could reset. Again, time proved me right.
On July 24, 2021, see blog post The Coming Inflationary Depression, I predicted that, for the first time in our history, the United States economy would decay into stagflation, In December 2021, the United States economy entered a state of Stagflation, which still exists at the time of this writing.
On March 9, 2022, I warned people not to invest in cryptocurrencies (see my blog post Why I Avoid Cryptocurrency). In November 2022, the cryptocurrency market crashed – losing one trillion dollars. To put this in perspective, it would take the average human being 317 thousand years to count nonstop to one trillion.
What is Cryptocurrency (Crypto)?
Crypto is a digital currency that first came on the scene with Bitcoin, which was introduced in 2008 by someone using the name Satoshi Nakamoto. Crypto is very much like traditional currencies that are sanctioned by a government and controlled by a central bank (a.k.a. fiat currencies). Unlike fiat currencies, crypto is independent of both governments and the central banking system. The beauty of crypto is that its value is not a victim of political and economic policies. Instead, the value of crypto is based purely on supply and demand.
What Is a Cryptocurrency Wallet?
At its core, cryptocurrency is nothing more than information stored in digital memory. This information is kept safe in an encrypted vault, known as a blockchain, that keeps a permanent record of your transactions. To learn more about blockchains, see my blog post Why I Avoid Cryptocurrency. A crypto wallet is simply a computer file that holds, and keeps safe, the blockchain needed to access your cryptocurrency. If someone else were to get a hold that blockchain’s encryption key, then they can lay claim to all your cryptocurrency. Crypto wallets can be in the form of a physical USB drives, software programs, or online services.
When you first purchase crypto, you are given a ‘hot’ wallet (connected to the internet). If you are smart, you will move this ‘hot’ wallet to a ‘cold’ wallet, like a USB drive, which is not connected to the internet and not privy to being hacked online.
What Is a Cryptocurrency Exchange?
As the stock exchange is used to invest money in stocks, a crypto exchange is needed to invest cryptocurrency. Put simply, a crypto-exchange is the middle-man who facilitates the buying and selling of cryptocurrencies. Once in the exchange, your cryptocurrency is invested with the hope that the companies in which you invest grow your crypto. As with stocks, for each trade (buy or sell) there is a transaction fee. The cryptocurrency is moved to the crypto exchange from your crypto wallet and visa-versa.
What Is FTX?
FTX is a crypto exchange formed by Sam Bankman-Fried in May of 2019, only days after Joe Biden announced he would run for president. Like Elizabeth Holmes, Bankman-Fried came from a family with deep political connections. These connections had the FTC keep their eyes off Fried’s business practices much in the same way that Holme’s political connections had the FDA look in the other direction when it came to Theranos. As a result, Bankman-Fried was backed by the full power of the US Government – allowing him to employ anticompetitive practices to grow FTX to a multibillion-dollar company overnight.
Why Did the Government Back FTX?
Bankman-Fried’s family had long time connections with the DNC, both supporting the DNC financially and being used by the DNC as consultants. As the Biden campaign was gearing up, FTX grew into a financial behemoth, which poured millions of dollars into Biden and the DNC’s efforts to win the United States Presidency. After Biden became president, he and the United States Congress poured billions of tax dollars into the Ukraine to support the war effort. At the same time, oddly enough, FTX was made the official crypto exchange of the Ukraine. Whereby, tax dollars donated to the Ukraine were converted to crypto via FTX, allowing FTX to collect billions of dollars of that tax money as exchange fees. Where did these billions of dollars go? They did not go into FTX or the company would not have been found insolvent. Instead, these tax dollars found their way into DNC political coffers. If history counts for anything, then I would bet my bottom dollar that many of these dollars also found their way into the pockets of politicians on both sides of the aisle.
Money Laundering for the DNC Was Not the Endgame
The enrichment of Joe Biden, the DNC, and their RNC allies was not the sole purpose of creating FTX. Instead, it was merely icing on the cake. You may be asking, “Why else would the U.S. Government help create the scandal that became FTX?” It is my supposition that FTX was created, raped, and doomed to fail by the people who really run the world – the banks.
As stated in my prior blog:
Crypto works outside of the control of governments and the central banking system. Whether you want to accept it or not, the central banks, and governments by proxy, run the world (see my other blog The Illusion of Freedom). It is my experience that betting against the power of the government and central banks is a losing proposition. In fact, central banks, like the US Federal Reserve, European Central Bank, and the Bank of England are in the process of developing their own cryptocurrencies. In fact, China has already launched a pilot program of their Digital RMB cryptocurrency. Unlike the current peer-to-peer cryptos, where blockchains are maintained by miners (users), the cost of maintaining the blockchain will fall on the government and central banks. Therefore, government sanctioned crypto will be at a competitive disadvantage right out of the gate. How are these governments likely to level the playing field? By creating crises to make peer-to-peer crypto illegal of course. In fact, at the time of this writing:
President Joe Biden announced that he will sign an executive order to regulate the crypto market. This is the US government’s first finger into the cookie jar, and if history is any judge, they will eventually squeeze in with both hands until the jar is shattered.
It is my belief that in November 2022, the Federal Reserve (a.k.a. FED, the world banking cartel) and the United States Government garnered public support to shatter that cookie jar by way of two strawman called Bankman-Fried and FTX. I feel that this was engineered to have the public lose confidence in the private crypto market, making way for the government and the FED to come in and save the day with a proposed monopoly on the crypto market. In fact, according to the NEXT News Network, the day after an implosion on the crypto market, the FED launched a plan to test their own digital dollar. Next goes on to say that according to the U.S. Government “The simulation comes as policymakers weigh the merits of a central bank digital currency, which would preserve the international role of the dollar while mitigating pitfalls inherent to cryptocurrencies, such as liquidity risk and credit risk. According to a paper written directly by the Federal Reserve. "A digital dollar could be privacy-protected, interacted with by private sector digital wallets, and transferred between different intermediaries’ customers. Money laundering could also be discouraged by banks verifying identity.”
Let us remember that the FED gave us negative interest rates, even in the face of rapidly growing inflation. Then, after the FTX bubble was full, the FED raised interest rates. It is well known that fraudulent companies have a harder time covering things up when interest rates are high because it is harder to cook the books when a company is highly leveraged with large debt. It is almost as if the FED purposely raised interest rates, among other things, to crash FTX. Now, you may be saying that the FED raised interest rates in response to inflation. If that was the case, then why did they wait so long? Furthermore, raising interest rates only helps inflation when it is combined with the FED printing less money (a.k.a. the U.S. Government spending less money). In this case, the FED raised interest rates while printing more money than ever before for reckless government spending. Those higher interest rates have only served to further stagnate private production as the newly printed money continues to feed inflation. Hence, as any first-year economy student would know, raising rates while outspending those rates by printing more money only serves to make stagflation worse.
How do I know the government and banks are out to take over crypto? Because they told us so. On March 9, 2022, the White House website published a page titled “President Biden to Sign Executive Order on Ensuring Responsible Development of Digital Assets,” two of the seven goals were stated as:
1. To promote U.S. Leadership in Technology and Economic Competitiveness
2. To Reinforce U.S. Leadership in the Global Financial System and to Explore a U.S. Central Bank Digital Currency (CBDC)
According to Blockzeit.com:
Interviews with former regulators and executives from top crypto firms reveal a sophisticated plan to take over crypto by handing over a key component of the crypto industry—stable coins—to the big banks. Regulators believe that doing so now will bring the free-wheeling crypto economy to heel. After all, there are trillions of dollars to be made and the banks want to be the ones making it.
If I Cannot Invest in Stocks, Gold, or Crypto, Then how Can I Grow My Money?
As earlier stated, it is my opinion that until the economy resets, investing in stocks, gold, and crypto; without using inside information like our politicians do, is a huge risk. I also believe that, barring a sea change, the economy will not reset, and we will transition to a new economic system. In my blog The New Feudalism I explain how the plan of the World Economic Forum is for everyone to rent everything. I go on to state:
We (the masses) are constrained by an economic cycle of fiat (fake) money while the elites use our real money to buy property. As this continues, the cost of property will rise beyond the grasp of the working class, which will separate our society into landed and landless classes.
In other words, while we convert our hard earned money into fiat currency via loans and investments, the people in the know are putting their real money into real assets. In such a world, only the assets of the landed class - property and means of production - will have value. Therefore, with the exception of my 401K and my company’s stock purchase plan, none of my money is invested in stocks or crypto. Instead, I keep a comfortable amount liquid in a high-yield savings account and have the remainder of my wealth invested in the ownership of property other than my primary residence, which, with a carrying cost (investment cost) of $1,500/year, has yielded a return of $100,000/year. That is a profit of $98,500/year. My current investment plan is to continue buying property as I accrue more real money via the fruits of my labor.
It is my opinion that, in today’s economy, the only true way to grow your money is to invest in property other than that of your primary residence
Will I be right again? I think the fact that my investment property has appreciated an average of $100K per year since 2019 is proof that I already am.
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