Stocks Down, Cryptos Up

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Global stocks continued their red descend following Fed’s yet another interest rate rise, while cryptos have turned very green this festive season.

“Some further gradual” rate hikes are to be expected now in the almost here new year, but instead of three, we should expect two more rate rises according to the maestro.

Crazy Fed

Unsatisfied with the speediest interest rate rises since Greenspan crashed the debt fueled world economy in 2006-07, another bump has now been added to the chart.

Straight line for about 7 years, then a straight line up in just one year.

The most visible effect of this tragi-comedy is the US government debt. It started last year at about a quarter of a trillion payable in interest. It ends this year at about a trillion.

That 0.25 might look tiny, but it adds another quarter of a trillion to the government deficit. They now have to borrow to mainly pay back what they have borrowed. A situation that for an individual would be called bankruptcy.

For a government it is slightly different because they can always raise taxes and bankrupt everyone else, or print their way out of debt as they have been trying to do. The problem, however, is that inflation is at just about 2%.

That perhaps suggests someone or some entity is hoarding a lot of money. Some others of course borrow it cheap from Fed and then fleece the plebs until that straight line gets too straight and no one can pay anything back.

Dow on monthly candles, December 2018.

If October was bad, December has been badder for stocks. That red candle there looks like the biggest for perhaps two decades and certainly since 2008.

You’d think with the economy booming as Fed apparently believes, the green line would be continuing. US, however, has seen real growth of only 1% after inflation for 2018.

No wonder ordinary people aren’t feeling Fed’s optimism. The maestro knows best however how to pump and dump, giving us a nice Christmas present if we were the scrooge.

Why raise interest rates rather than capital requirements for lending is a question they never seem to answer. Whether they should be sent to prison for gross negligence if this now goes into a recession is another question they probably won’t answer.

Because you can’t raise interest rates eight times up and up in just a year or two and expect any different result than what happened last time the maestro did so.

Anyway, that’s why this space exists so that we don’t have some clueless individual making stupendously complex decisions to which he can’t possibly have the right answer.

For once this year cryptos are acting as that alternative, up today and by quite a lot. In contrast to crashing oil, down from $80 to circa $50 now. Similar however to gold which is up a bit.

Top cryptos, December 2018.

It has been a long time since we’ve seen trading volumes of $8 billion for bitcoin. Longer still, if ever, since xrp stayed for some time above eth, now with a distance of $4 billion.

It is bitcoin cash, however, that may be turning heads. Doubled in about two days. Up an incredible 50% for today.

Is this stock money? Some of it probably. It may also be the case that cryptos reached a stage where everyone was kind of waiting to buy lower.

Plenty probably still are. After a year of beating, no one believes this is going anywhere. Bottom has been called so many times that some might think there won’t be a bottom until we pass all-time high.

If we do so of course. There’s still that zero on the chart. Just as there can be additional zeros on the way up.

Purely sentiment? Maybe. The game of chairs for adults can be played by buying at the top of the band and selling at the bottom of the band according to some other sort of maestro. Or is it the other way around?

Some perhaps do know. Vitalik Buterin, Charlie Lee, Justin Sun, and undoubtedly some others, sold at the top of the band in December 2017.

We doubt Buterin plays the game of chairs as he is probably quite busy being a meme, an eth spokesperson, visiting every corner of earth, and then coding now and then maybe.

Not appropriate for us to suggest Lee or Sun perhaps do, but you’d think some who sold at the top perhaps got fed up with waiting for it to go any lower.

Then there’s the fact 2018 is almost gone. So all that scalability stuff and all those things worked in 2018 are now kind of closer.

For eth, there’s the issuance reduction on January 16th which is now just three weeks away or so. Bitcoin has Bakkt and all that Wall Street stuff starting in January.

Then eventually the halvening won’t be that far away either. Bacon will undoubtedly be plentiful for Christmas, but it may be the Beacon that might taste far more yummy once it goes out.

When? Well, you know, maybe we should start saying by 2030 so that if it comes this summer, then everyone can get excited.

One thing to be legit excited for, although it is quite complex and boring in many ways, is Eth 1x. That may provide 10x scalability, but the more interesting part is storage rent and pruning.

Storage rent could have implications for investors due to its potential effects on new issuance. People basically have to pay for all these nodes to run their smart contracts. If they don’t, then the smart contract gets discarded, but they’ve promised one can revive it by some sort of magic.

That rent, obviously, goes to stakers or miners. In addition to transaction fees, it may all become a fairly considerable reward in itself if usage grows. Meaning that new eth might not be needed to secure the world computer.

That’s a side effect because the main aim is to put an upper bound on history. That is more directly done by pruning, which basically says something like only three years of history are needed.

For pruning too they are promising some sort of magic whereby old data will still somehow be available, making both of these proposals at a drawing board stage.

Their promise however is the provision of world level scaling in a way that allows our laptops, and those of our grandchildren, to run a node.

It sounds like a wholistic solution and if achieved in a satisfactory manner, it would make ethereum basically the standard for any project with a long term view and conceptually it would make the world computer sustainable.

For the kitties of course. Someone “sent” us one as a Christmas present. We obviously didn’t click the link. Yet, what’s the use of all this without some fun and games? Ah, yes, upgrading the financial system so as to reduce it all to code to tell the maestro that he should go read on why the Soviets couldn’t satisfactorily allocate prices to meet supply and demand.

Something to do with information, which now can be reduced to 0s and 1s with algorithms being the new maestros as we put trust in the collective machines.

Copyrights Trustnodes.com

 

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