Christmas is canceled

ho ho ho

June 11, 2022

And just like that… the game just changed.

There won’t be a miraculous new leg up in the stonk market.

Impossible now.

The best we’ll see is a bear market rally to pull the suckers in.

You see, there was a legitimate argument that a lot of the inflation we see now was transitory, basically raised energy prices from Ukraine.

The latest inflation numbers came in higher than expected.

Way higher.

Price increases over last year (CPI report)...

Fuel Oil: +106.7%

Gasoline: +48.7%

Gas Utilities: +30.2%

Used Cars: +16.1%

New Cars: +12.6%

Electricity: +12.0%

Food at home: +11.9%

Overall CPI: +8.6%

Transportation: +7.9%

Food away from home: +7.4%

Shelter: +5.5%

Apparel: +5.0%

Mid 1970’s level of inflation. 

This is the “flexible” CPI index which is the stuff you actually buy… up 22% year on year.

This is bad for reasons nobody remembers since most of us weren’t alive then. 

It’s like an invisible tax. And to avoid that invisible tax investors have to re-allocate away from the risky shit into safe boring stuff.

And the stuff that’s way out on the yield curve… speculative startups funded by VC money… SPACs…. shitcoins…

It’s all gonna be a bloodbath.

And it’s clear in retrospect what happened.

All those stimmy checks took a while to work themselves through the bowels of the world economy and now they are shitting out extra demand.

At the same time we have supply shocks from Ukraine AND China lockdowns.

This is a double whammy.

They can print money but…

They can’t print oil

They can’t print copper, 

They can’t print new ships to carry the shit we want.

The only thing they can do is reduce demand.

How can they do that?

Easy - toss us into recession. On purpose. Raise unemployment (which is low right now)

And to be honest… that’s probably what they should do.

Except the problem is destroying demand might inadvertently make it more difficult to bring new supply online too. 

It’s hard to get funding for a new nickel mine or oil well when the market crashes.

But really… that’s all above our pay grade.

Here’s the key things you have to know.

The idea of buy any old shit that’s moving because bull market… that’s over.

And inflation is here.

That's GOOD FOR BITCOIN. Since bitcoin is profoundly deflationary.

Bitcoin is about the only thing that regular people can own that will protect their money from inflation.

So that’s good.

But the bad.

All that other stuff further out on the yield curve..

Metaverse, layer 2’s, DeFi… it’s gonna be a bloodbath.

Do NOT HOLD ANY OF IT.

That’s all I got for now.

The only thing I can guarantee will keep working is our Crypto Salary System.

I’ve been teaching it in bite size chunks, a little every day, in preparation for webinar next week on 16th June where I’ll pull all the pieces together for you.

Scott