August Will Be A “Hot” Month, Buy Bitcoin!

House prices are at all time highs yet demand for housing is crashing.  The Chinese chip makers cannot get chips to the US fast enough, and there is a large export tariff on them now.  Auto inventory is graphed below, all time lows:

Personal Consumption Expenditures are forming a hockey stick up since the pandemic began:

As the tweet below expresses, used cars are as expensive or more expensive than new cars, Click to view on twitter.

 

When the Fed will NOT raise rates while inflation is starting to get out of control.  What does that do to demand for automobiles, houses, real estate, boats, airplanes and any other big ticket item?  They begin to drop.  That reduction in demand as personal consumption is spiking ,will weigh very heavily on real estate and the stock market.  The Fed has been buying up treasuries and mortgage backed securities (reverse repo) at up to $1 trillion per day!  This in effect keeps liquidity in commercial banks and props up real estate, while keeping interest rates near zero.  Zombie stock market companies are created, who only buy back their own stock, thereby artificially raising stock prices.  It may look good on CNBC, but the reality is, this economy is just waiting for the right time to crash.  Stocks, real estate, banking, all of it.  Velocity of money was beginning to tick up but once the stimulus payments slowed down, that has reversed course:

The Fed has now doubled down on standing repo facilities to support money markets (liquidity for commercial banks).  See below:

Our view on this may be unpopular.  However, many main stream news talking heads are against the idea that inflation is NOT transitory or that Bitcoin IS a great inflation hedge.  Critical thinking skills are not too popular anymore either.  Yet, here we are at the end of the fiat currency cycle.  Central Banks worldwide will NOT be able to keep commercial banks alive indeffinently.  This is a “fourth turning” cycle.  Examples of this are: the Revolutionary War, The Civil War, The Great depression and then WWII, Covid 19 and then ______.  What will come next, that is the question, and the fight going on worldwide!  See the next graph to explain:

How does Bitcoin fit into all of this?  There is no true “money” that is as decentralized as Bitcoin is:

 

There is no true “money” that is as scarce as Bitcoin is:

Since Bitcoin is on a secure open ledger (the Blockchain) it does not exclude anyone from owning it based on their wealth.  Especially since 1 Satoshi is 1/100millionth of a Bitcoin.  Even though Bitcoin is volatile, it is a safer bet than Gold, Silver, Rare Art, Classic Cars which are popular inflation hedges.  If and when a deflationary crash in stocks and real estate does happen, Bitcoin will almost be guaranteed to serve as the flight to safety from other assets.  Gold, Silver, Art, and Classic Cars will also benefit.  Neutral ATM believes Bitcoin will benefit the most.  So start dollar cost averaging into Bitcoin.  If that Infrastructure Package is passed soon, inflation will certainly spike up even faster.  We are hearing the size of the package will be reduced.  Either way, don’t miss getting on the Bitcoin life boat!  We predict August will be “hot” because the geopolitical issues and headwinds we are facing will boil over next month.  We don’t know where that will lead.  We do know everyone will need a hedge to protect themselves, and their assets.