So, I guess we have all noticed a week in the crypto-market where everything has rebounded up... and I guess that everyone is asking the question, was that the bottom? I see quite a few people seeming to be convinced that the crypto winter is all over and that was it... and it is back to green all the way again. And then I hear others who are a bit weirded out that there wasn't more pain... I'm a bit in the latter camp. I'm not really convinced that everything from the CeFi and 3AC stuff has played out properly...

I've been listening to a bit of the recent Bankless podcasts, with some analysis and opinion from some macro-economics people (Luke Groman and Lyn Alden) and how that will tie into our everyday lives, and crypto in general. Honestly, it makes for some pretty terrifying possibilities... after all, the current behind the scenes picture is a nightmare. Money printing on an unprecedented scale, inflation out of control, war, and supply chain crap ups... all combined with decades of businesses and governments cutting to the bone in pursuit of short term profit and votes. Well, it appears that the bill is going for all of that is coming due soon... and as usual, the costs are socialised, and the profits are not.

So, some of the scariest things are that nation states are going into default... or even worse doing everything to prevent going into default, which means that they will try to inflate their way out of debt instead. Nation states going into default is poop, and inflating your way out is crap for the regular person. I'm not going to go into the small/big government thing... in my opinion, the "small government" narrative was something cooked up to justify corporate capture and we fell for it as a society. It rings true, but in the end it allows the powerful to accumulate more, whilst the rest of us get a little crumb to pretend that we "won" something. After all, those who gain the most from reduced regulation tends to be those who can run the fastest... Of course, there is the case that there is a LOT of government spending (depending on which country you hail from) that is completely mis-spent, but that doesn't justify throwing the baby out with the bathwater. It just means that government is captured... instead of challenging the powerful, they protect them now.

So, the Euroone and Japan seem to be in serious crap... and anything that the US does, seems to either sink their allies, or affect their own economy badly. So, it is the classic rock and a hard place.

Anyway... how does that relate to us crypto-nerds. Well... if interest rates keep going up, then we are in for a big drop again (plus, if the contagion from 3AC, Luna, and CeFi is not done either...). This could lead to some serious pain for householders, and those who are in debt... a recession that hopefully doesn't become a depression. And a debt-backed currency (like the USD...) is going to be a crap thing to have! If that is the case, then it could be conceivable that the USD will finally lose the reserve status that it has held for ages... as no-one really want (or is forced to use...) USD anymore. It goes without saying that this will have big effects and re-balancing for the whole world!

The other choice is that central banks inflate their way out of debt (and given the US Fed is in charge of the reserve currency... what they do there seems to matter the most)... and that would mean maximum pain for society, but might be the best for the USD to hold reserve status? However, if we are seeing a decade of outsized inflation... well, that is going to sting like crazy. Sure, the crypto numbers will go up along with other things... but in real-terms that doesn't mean anything. Unless there is a move away from the USD reserve to something decentralised?

All this goes without saying that with a huge disruption in the global economy is likely to go hand in hand with a large disruption in society. Hopefully not a war, but this could be the start of a very very "interesting" decade. Perhaps it is time to pull our heads in and be prepared for disruptions of supply and all of that? Grow your own food, minimise debt/expenses, own tangible things?

Of course, maybe everything will be all okay... or maybe not. Who will know?

I can also be found cross-posting at:
Hive
Steem
Publish0x

Handy Crypto Tools

Ledger Nano S/X: Keep your crypto safe and offline with the leading hardware wallet provider. Not your keys, not your crypto!
Binance: My first choice of centralised exchange, featuring a wide variety of crypto and savings products.
FTX: Regulated US-based exchange with some pretty interesting and useful discounts on trading and withdrawal fees for FTT holders. Decent fiat on-ramp as well!
MXC: Listings of lots of interesting tokens that are usually only available on DEXs. Avoid high gas prices!
Huobi: One of the largest exchanges in the world, some very interesting listings and early access sales through Primelist.
Gate.io: If you are after some of the weirdest and strangest tokens, this is one of the easiest off-chain places to get them!
Coinbase: If you need a regulated and safe environment to trade, this is the first exchange for most newcomers!
Crypto.com: Mixed feelings, but they have the BEST looking VISA debit card in existence! Seriously, it is beautiful!
CoinList: Access to early investor and crowdsale of vetted and reserached projects.
Cointracking: Automated or manual tracking of crypto for accounting and taxation reports.
Poloniex: One of the older regulated exchanges that has come into new ownership. I used to use it quite a lot, but have since stopped.
Bitfinex: Ahhh... another oldie, but a goodie exchange. Most noted for the close affiliation with USDT and the Basic "no-KYC" tier!