The Stock Markets are crashing down, and the FEDs have not raised Interest Rates. Instead, the FED has propped up the economy during the Covid Crisis in March of 2020, putting its balance sheet at near $9 Trillion.
They have done QE (Quantitive Easing) by purchasing U.S. Bonds and Big Company Bonds. In essence, it is like Monetary Theory but more messed up. The Money Printer from the FED gives the newly printed Money in a Crisis to numerous companies to invest that money in the market to prop up the economy and provide liquidity (sometimes in the form as credit) for those looking to exit the market, such as selling stock, assets, bonds, etc. It is seen to spur growth in GDP for the US, and so the Stock Market can reach all-time highs throughout all purchases; technology stocks, value stocks, earning stocks, energy stocks, etc.
There is A LIQUIDITY CRISIS OCCURING IN THE MARKET
This chart indicates that the Market was at the same levels during the Covid Crisis of March 2020, where little to no liquidity was available.
But Stock is higher than it was two years ago?
Because rich people are not dumb, they take what money they can from the Stock Market given and park it in hard assets; real estate, bonds, Gold, Silver, Paintings, Bitcoin, etc. Money locked in these assets is probably never seen again in the Market because they pursue wealth.
Tech companies missed earnings, and their stocks plummeted 10%-17%.
You can still make your gains as a small investor, but this primarily affects the significant powerhouse hedge funds. If a prominent institutional investor wants to sell their shares in the market, it would be not easy because they would need another massive entity investor to buy it from them. For the prominent investor to sell the shares, they would have to sell at a lower price than previously purchased, triggering a margin call creating a negative price spiral down for the markets.
To understand the Stock Market, you have to learn its backbone of interest rates. Then earnings from stocks make up the stock market. Also, the market needs liquidity.
These times are worse than March 2020 crash. We may see more down days in the stock market.
Everything is unwinding. The FED last year said they would QT (Quantitive Tightening) opposite of QE (meaning BRRRRR, Money Printer).By raising rates and injecting less money into the market.
The FED is cornered. They either raise interest rates causing a big stock market crash, they could raise the rates slowly, but at some point, the stock will fall further down, and it will be like catching falling knives. You then have hedge funds blowing up because they are over-leveraged.
The FED can continue with QE and print more money in the trillions because it is their balance sheet. But you have the Cantillon effect, more disparity, and significantly more uneasy protests.
The FED and central banks have the most to lose as the “fiat reign” ends and all the music stops.
Bitcoiners want to create a parallel system that can bring about peace. One of which has a 50/50 chance of becoming. It is an all-out bet as an entrepreneur to see a brighter future for everyone.
Thank you for reading Isaias’s Newsletter. This post is public, so feel free to share it.
Share this post
Illiquid Markets?
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The Stock Markets are crashing down, and the FEDs have not raised Interest Rates. Instead, the FED has propped up the economy during the Covid Crisis in March of 2020, putting its balance sheet at near $9 Trillion.
They have done QE (Quantitive Easing) by purchasing U.S. Bonds and Big Company Bonds. In essence, it is like Monetary Theory but more messed up. The Money Printer from the FED gives the newly printed Money in a Crisis to numerous companies to invest that money in the market to prop up the economy and provide liquidity (sometimes in the form as credit) for those looking to exit the market, such as selling stock, assets, bonds, etc. It is seen to spur growth in GDP for the US, and so the Stock Market can reach all-time highs throughout all purchases; technology stocks, value stocks, earning stocks, energy stocks, etc.
There is A LIQUIDITY CRISIS OCCURING IN THE MARKET
This chart indicates that the Market was at the same levels during the Covid Crisis of March 2020, where little to no liquidity was available.
But Stock is higher than it was two years ago?
Because rich people are not dumb, they take what money they can from the Stock Market given and park it in hard assets; real estate, bonds, Gold, Silver, Paintings, Bitcoin, etc. Money locked in these assets is probably never seen again in the Market because they pursue wealth.
Tech companies missed earnings, and their stocks plummeted 10%-17%.
You can still make your gains as a small investor, but this primarily affects the significant powerhouse hedge funds. If a prominent institutional investor wants to sell their shares in the market, it would be not easy because they would need another massive entity investor to buy it from them. For the prominent investor to sell the shares, they would have to sell at a lower price than previously purchased, triggering a margin call creating a negative price spiral down for the markets.
To understand the Stock Market, you have to learn its backbone of interest rates. Then earnings from stocks make up the stock market. Also, the market needs liquidity.
These times are worse than March 2020 crash. We may see more down days in the stock market.
Everything is unwinding. The FED last year said they would QT (Quantitive Tightening) opposite of QE (meaning BRRRRR, Money Printer).By raising rates and injecting less money into the market.
The FED is cornered. They either raise interest rates causing a big stock market crash, they could raise the rates slowly, but at some point, the stock will fall further down, and it will be like catching falling knives. You then have hedge funds blowing up because they are over-leveraged.
The FED can continue with QE and print more money in the trillions because it is their balance sheet. But you have the Cantillon effect, more disparity, and significantly more uneasy protests.
The FED and central banks have the most to lose as the “fiat reign” ends and all the music stops.
Bitcoiners want to create a parallel system that can bring about peace. One of which has a 50/50 chance of becoming. It is an all-out bet as an entrepreneur to see a brighter future for everyone.
Thank you for reading Isaias’s Newsletter. This post is public, so feel free to share it.
Share