Part 1 – Cryptocurrency Series Introduction
The united states is in debt. Not a little bit of debt; a lot of debt. On January 19th, 2023, we exhausted our $31.4 trillion debt ceiling.
The united states is in debt. Not a little bit of debt; a lot of debt.
On January 19th, 2023, we exhausted our $31.4 trillion debt ceiling. You may have read news stories recently about the standoff between Democrats and Republicans in the House who are actively playing another game of chicken as we speak.
Here is the situation: Our government has run out of cash on hand to cover their debt. Just like failing to pay your mortgage and risking foreclosure, the government is in risk of defaulting on their debts. This is less than stellar news. Just the risk of the US defaulting on its debts sends markets into a free fall. Economists are projecting that if we do not reach a debt-ceiling agreement in the coming weeks, the economic impact could drive us into a recession.
If Republicans push the U.S. into default, the dollar would likely lose its position as the international unit of account (the worlds reserve currency). This is a very bad. The US enjoys the rare ability to pay its debts off in the form of its own currency: The Reserve Currency (US Dollars). This means that no matter how large our debt obligations become, we can print more money and pay our debts. Usually the government balances money printing with tax revenue and borrows even more money to pay the difference.
If the US does default on its debts, the most likely outcome would be a major loss in the value of the US dollar, followed by an abandonment of USD as the reserve currency, and a particularly nasty recession as the government prints more money to covers its expenses (which, if bad enough would lead to a hyper-inflationary environment). even if we do not default on our debts, the US is in danger of losing its reserve currency status in coming years.
Before you raid Costco for non-perishables and toilet paper, let me remind you that the government has played this game of chicken before. in all likelihood they will meet some sort of compromise and raise the ceiling. None of our government leaders are willing to lose their standard of living over a political squabble.
However, the truth remains that our country’s situation is dire.
The BRICs nations have begun talks to transact without the petrodollar, China brokered something of a peace treaty in the middle-east between Saudi Arabia and Iran (lifelong enemies not just for political reasons, but for religious ones), and our country is fighting over who has the biggest unpaid debts (us or the rest of the world, and we are winning by a landslide).
It remains to be seen if the US will pull itself together, or crumble under the pressure. There may be an American bubble that is on the tip of popping.
A Brief Explanation: Who is Connor?
My name Is Connor Norvell, I am a Realtor and Managing Member of a Real Estate Acquisitions and Holdings Company – Home Key Equity Group. I have been an active trader of crypto-currency and avid crypto investor for the last 8 years.
I believe that crypto-currency will prove to be a shield against economic instability over the next decade (with the potential to out pace the rest of your portfolio in the short term).
Long before I became a realtor I was first introduced to Cryptocurrency (and specifically Bitcoin) by an early Bitcoin miner (more on mining next week).
I met this man who told fables of magic internet money that would take over the world. At the time it sounded like some sort of nerd operated pyramid scheme, little did any of us know at the time that the price would rise from $300 to around $64,000 in 2021 and begin to revolutionize the world of finance.
For reference, had you purchased $10,000 worth of Bitcoin in November of 2015, you could have sold all 33.33 bitcoin for a grand total of $2,100,000 a short 8 years later, for an annualized return of roughly 2,600%. Sure beats the S&P 500.
But I digress…
After much back and forth, I was brought on board and invested my life savings in Bitcoin in 2015. This I attribute to luck more than a solid foundation of investment advice. Surely Dave Ramsey would have “knocked me upside the head”, or some other southern idiom to inform me I should “act my wage” and work 7 jobs instead of buying internet monopoly money. (No hate to the Dave Ramsey crowd, he offers conservative investment advice for the masses which is fine by me. However, crypto is by nature anything but conservative).
It was not all uphill from there, but this was a turning point for me financially and in terms of my economic philosophy. While I did make significant portfolio gains over the following years, I also lost double digit percentages of my portfolio many times. Along the way I have learned many lessons and principles for investing in not just crypto, but any asset class. I have learned these lessons while gaining and losing hundreds of thousands of dollars over the course of 8 years. And believe me: nothing makes you pay attention like life changing amounts of money being on the line.
These guiding principles have served me well, and have saved me from catastrophic losses.
I have lived and breathed the ecosystem for 8 years, and have found a balanced protocol in the process. One that has the highest likelihood of major profits, the lowest likelihood of catastrophic downsides, and one in which my hair will hopefully not prematurely turn gray and fall out from watching at my portfolio performance.
Crypto has allowed me to do many things in life I never would have dreamed of otherwise. I have traveled, lived in various places around America, and paid ungodly amounts of taxes.
It is not without its pitfalls. I plan to point them out for you.
There is a much more dire reason that I am writing this series now, rather than later: The Changing World Order (which you will learn more about in part 3).
The US Dollar will likely not remain the dominant reserve currency in coming years as China and others come to supplant it. And that has serious implications for your wallet, income, investments, and the Economy at large.
The future is anything but clear. There is no way to predict with 100% certainty what the outcome will be. Here lies my first investment principle:
Investing Should Be a hedge against everything.
I live my life and invest according to this principle. We cannot know what will happen. In all market conditions the best investment protocols give you options.
If you are working a 9-5 job right now, there is always a possibility that you are at risk of Being laid off. Just look at the recent tech layoffs of almost 150,000 people. These were the hard working employees who were told their careers were unkillable. We were all told these jobs were future proof, and then laughed at for believing it.