Economic situation March 30 2020
Not easy times ahead of us as the whole world is in quarantine and have no real mood to open their accounts and look up their investments. I am currently writing from my home office as everyone, and managing everything from our homes.The big question we are all asking ourselves nowadays, how much more time are we going to sit home and watch this depressing news of the virus spreading everywhere. The only good news we see is that many countries took serious action and ordered all citizens to enter quarantine or a complete shut down like India , which is very wise decision. What I would like to bring up is that remember dear readers every recession or depression is possible to overcome and smart money are sitting and calculating all of their steps during this critical times and preparing to make big money in the coming months. Central banks are showing their power by injecting more and more stimulus , will it help?
Nobody really knows where market is going and where it will be in a month time, but one thing is for sure all world leaders are taking serious action to save their economy from any catastrophe. We can see unemployment entering into freefall more strong. There is no question we are into a recession right now but are we entering into a depression zone? This should be avoided at any cost, people cannot make decisions and are looking for less riskier investments. Are we going to recover in Easter as Trump stated that everyone will go back to work? Will we see a V shaped recovery? If the S&P will fall again this will cause fomo and panic. The FED is taking already very strong measures , is there any limit how much the FED will pump more? Will it avoid any crash in the markets? This is excellent news that the FED is pumping so much into the economy as small medium and large businesses will be able avoid a catastrophe in their business and have better rates for their loans. Eventually business will open again and the world will take control over the deadly virus and there should be strong rebounds but the question remains WHEN, nobody knows! The economy in the US and all around the world have been performing well with the US having record jobs and record stock market, was it all too good to be true? You always get more for your money with stocks then Bonds, buying and holding for the long term is something which everyone should be thinking of if he knows what’s his doing. I am expecting all economic activities and business to go down more and recover eventually in the second half of the year , question is, how well will we handle the virus. Will the FED run out of bullets soon? Should they have raised more when the Economy was in a good shape? What about if I lose my job , is there anything the FED can do to help me? Slashing the interest rates to 0 is a good step and other policies can take place to support the economy.
Now we will talk about the best asset in the world - BITCOIN , are miners losing so much money that they left the business completely? Any miner can still enter the market freshly and start mining with profits its all a question where is he doing that.
We see lately that the hash rate is dropping very strongly and it takes more and more time to get blocks which is a clear signal that bitcoin is becoming more expensive to mine.
Bitcoin is lately hand in hand correlated with Gold and S&P , we see a complete collapse in stocks and yet Gold is holding steadily and so is Bitcoin.
If you make the calculations we should be trading with Bitcoin currently at 3K but instead we are above 6K and the conclusion is that Bitcoin is a hold and specially before halving which is in a month from now.
If you do not have high risk appetite then you should consider buying in small parts every dip and keep holding Bitcoin as its the best asset in the world.
I wish you best and may we see better days for all of us!