It's been 7 years since the financial crisis of 2008 and many have begun to wonder when will the next correction take place, and what markets will be responsible. Subprime and predatory lending on mortgages ultimately led to the collapse of the housing market in 2008 and if we compare today's housing loans to that of 2007, we are in a much better position than we were. Banks are now more strict on who they lend money to and we don't see as many high risk loans being given out for mortgages. However, there are several fault lines paving the way for the next financial or geopolitical crisis.
Fault lines for the next global crisis:
- Household income is falling when adjusted for inflation
81% of the counties in the US have less purchasing power than in 1999, when Bill Clinton was president - Subprime lending is back
This time it's with auto loans. The New York Times’ Deal Book estimated that 27 percent of the auto loans issued in 2013 were subprime. - The national debt is approaching the $20 Trillion mark. Most of it is owed to China.
- Tensions with China, Russia, Iran, and North Korea are on the rise.
** China has been building artificial islands surrounding its coast with airstrips housing surface to air missiles since 2013. Only a fool would assume China is not a global superpower with a massive sphere of influence that is only growing. China is stronger than ever before in history and this fact isn't to be overlooked.
** With the steady buildup of NATO troops around Russia, the constant news coverage of Russian hacking, the deployment of Russian ICBMs in Kaliningrad, the buildup of economic sanctions, the expulsion of diplomats, and the proxy wars in Ukraine and Syria, one has to wonder what the hell is going on, and what is going to be the result of this.
** Iran has officially dropped the US dollar for foreign trade and they have been strengthening their economic and military ties with China, Russia, and India. It has been also targeted by numerous sanctions but shows no signs of bowing down to the western banking system.
** North Korea continues to develop its nuclear missile program despite a barrage of UN sanctions. North Korea is seen as the most imminent threat out of this list of countries and is now capable of striking deep into the mainland U.S. The last thing they need is a warhead that will fit their KN-14 missile. Military action has been put on the table for Donald Trump and we are likely to see something happen within 10 years, if not 5. The most recent UN resolution targets North Korea's primary exports, including coal, iron, iron ore, lead, lead ore and seafood. The sanctions also target banks and joint ventures with foreign companies. U.S. military exercises with Japan and South Korea are increasing.
Recession and inflation-proof currency
Whatever it may be that causes the next crisis, what role will cryptocurrency play?
Well, what have Greece and Venezuela done amid their economic crises? It isn't a surprise that many of their citizens have put their money into Bitcoin and have also been using it to obtain dollars or to store value. Some Venezuelan stores have made the switch to only accept Bitcoin and not even their national currency, knowing how volatile and useless it currently is.
Bitcoin has no regulation and governments simply cannot print more Bitcoin, so it is seen as a safe store of value and has proven to be a reliable investment.
Bitcoin has also made a surge in Nigeria and other developing nations.
But what about the U.S.? What will happen to Bitcoin and other cryptos when the world's largest economy is brought down to its knees? From what we've seen in Greece and especially Venezuela, it's highly likely the value of Bitcoin will soar while the value of the dollar decreases from inflation and early adopters will be gaining massive returns on their investment. The next collapse could be the beginning of mass adoption on a scale we have never seen before. Tech-savvy individuals will no longer be the only ones holding Bitcoin, but the common folk will be using Bitcoin to store value and make purchases. Businesses will undeniably be adopting to accept Bitcoin as a form of payment and some will favor Bitcoin over the dollar until the economy stabilizes. The ones who sell Bitcoin out of fear during a crisis will be the ultimate losers. They will be selling recession-proof currency during a recession!?
In conclusion, if you think it's too late for Bitcoin, you might need to step back and look at the big picture and think of the long-term potential. Remember, there can only ever be 21 million Bitcoins. $3,200 won't seem so bad when it hits $5000 and beyond. How much have you invested and how prepared are you should the dollar lose half of its value overnight?
-CryptoCouch
Sources:
http://www.offthegridnews.com/financial/5-warning-signs-an-economic-collapse-is-looming/
http://www.cnn.com/2017/08/05/asia/north-korea-un-sanctions/index.html
https://www.nytimes.com/2017/08/02/world/europe/trump-russia-sanctions.html
http://www.businessinsider.com/russia-placing-state-of-the-art-missiles-in-kaliningrad-2015-3
http://www.businessinsider.com/iran-is-ditching-the-dollar-in-foreign-trade-2015-1
https://www.reuters.com/article/us-venezuela-bitcoin-idUSKCN0HX11O20141008
https://www.forbes.com/sites/realspin/2017/02/03/why-venezuelas-currency-crisis-is-a-case-study-for-bitcoin/#27052b2d19b2
http://www.pymnts.com/exclusive-series/2015/the-greek-debt-crisis-and-bitcoin/
Excellent post! I too believe that as the dollar continues to lose value, the price of Bitcoin will skyrocket and mass adoption will rise!
This may be the new system put into place while our current one is collapsing.
Excellent summary of all the issues. Resteemed and upvoted.
Well thought out post, thanks! Now following, please follow back.
Congratulations @cryptocouch! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOPOnce the dollar dips and bitcoin raises in price, seems like when the fbi may start to unload its 490million dollars worth of bitcoins. Are there enough buyers to pick up such slack?