Venezuelan Stocks are Surging Amid the Crisis
In 2008, when the Federal Reserve started printing more money through quantitative easing, they were debasing the US dollar. The more there is of something, the less valuable it is. However, the majority of people don’t notice it because their 401k is going up, and their house is increasing in value.
People will talk about this grand, colossal market crash which will bring all assets to their knees due to the decades of money printing, debt, etc. It’s not going to happen. Stocks will actually continue to go up, at a quicker pace. Why? Currency debasement.
Look at Venezuela. When priced in Venezuelan currency, asset markets went parabolic. That’s not because their companies were generating more business – it’s because their money is worthless. To buy a share of stock today would cost a Venezuelan multiples more than it would a decade ago. Their currency has been debased.
The Market Won’t Crash, Your Money Will
What is currency debasement and how can we navigate it?
We’re all on a journey when it comes to navigating the financial and economic landscape. And no one knows with certainty where we’re headed or what is going to happen. Massive global debt levels. The fastest adoption of new technology. Central banks printing trillions of dollars. Digital assets…It’s all new. This is why reading the tea leaves, looking at history, and doing extensive research is essential – or else you’re going to be left behind.
In 2008, when the Federal Reserve started printing more money through quantitative easing, they were debasing the US dollar. The more there is of something, the less valuable it is. One Mona Lisa painting is valuable. One million Mona Lisa paintings isn’t worth nearly as much. This is what has been happening with the US dollar – they’re debasing it. However, the majority of people don’t notice it because their 401k is going up, their house is increasing in value.
This is what is slowly happening in America. All seems to be going well. But while everyone’s retirement fund is going up, their income is relatively stagnant and they can buy less things. Now people are poorer and they have no idea why.
Macroeconomist Raoul Pal (who I recommend you all follow), researched how well the S&P 500 performed relative to the Fed’s balance sheet (S&P performance compared to the printing of dollars). He found that most major assets are either underperforming or barely keeping up with the Fed’s currency debasement.
The debasing of our fiat currency will continue and continue at a more rapid pace.
Equities will climb as the balance sheet climbs. They will continue to offset currency debasement. Tech and crypto will outperform over time.
Our job? To outpace the debasement. That’s the only way to get ahead or else we’re stuck in quicksand. We do this through investing in assets that have the greatest return potential against the Fed’s money printer.
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Resources:
https://t.me/intelslava/49609
https://genco.substack.com/p/the-market-wont-crash-your-money
