The Way Forward

You may have heard of Michael Hudson, author of the book "…and forgive them their debts". If you have not I encourage you to take a look at his website to get an idea of what it's about. Debt cancellation is apparently a common staple in the case of once-in-a-lifetime events. What does it do? What it did was to get the US back from the 1929 crisis. This has been well documented in the following book.

Currency devaluation gives the government free money to repay all the debt. The currency is worth less than it was before, but it instead of being all sucked into the financial system, it allows the economy to restart. It's as if the bar gave the village drunk a blank slate. Of course he'll get wasted again and will fail to repay but he'll be good to go for a while. Same with investment banks, the ultimate welfare queens. The single mom struggling to get by with her child support and welfare check is not the problem, she is at the complete opposite side of the spectrum.

What the devaluation means is: deflation ends, debts get repaid. Banks start lending again. Prices increase, there is inflation. Hard assets become significantly more valuable than they were before the devaluation for a simple reason: you can't create more precious metals or more Bitcoin out of thin air. You can do that with currency tho. Which is why considering hard assets may be worth doing. You may have seen their price decline sharply in recent days. That's what happens in the deflation phase. The one preceding the inflation phase. I don't know how lower hard assets will go before bottoming. The key is to think long term. Hard assets should not be bought for short term, they are not meant for that. Their purpose it to get you through events like the one going on right now. Ideally, buy low and sell high. But if market timing is not your forte you may want to allocate a little bit of money, depending on your finances, on these assets. Bitcoin has the advantage of being harder to confiscate. What FDR did during the 1933 devaluation was confiscate gold so if your parachute gets taken away by the government then it's no use. Therefore Bitcoin is a superior form of hard asset. It is however essential to understand that this asset requires proper storage, which means having your coins on your own wallet with your own encryption keys. This can be a little complicated for the less tech-savvy but efforts were made to make the technology accessible to everyone. The simplest one I can come up with is a website called flote.app. You sign up with an email and a password, it gives you an account like facebook, but with your own bitcoin wallet. It's worth checking particularly if facebook gives you some concerns. Back to rare metals: silver is lower than it's ever been compared to gold, in 5000 years of history. The VanEck Vectors Gold Miners ETF (GDX) is at its lowest since 2016. These two would present a research opportunity regarding their potential, if you are a financial professional.

Another way of hedging on high uncertainty is by looking for a dual citizenship. Maybe your family has a few people here and there. It's worth checking because you never know. When things go from bad to worse only those who stay get the worst. Now you'll notice we've got a nice Coronavirus that's closing all borders everywhere. In other words, we're gonna get it big time unless we're prepared. That leaves fewer options on the table, as our forefathers from the 30s could relocate abroad. But hey they didn't have Bitcoin. It's around 5k. There's a halving coming up around May 2020. Another asset worth monitoring closely given the circumstances.

I don't provide financial advice, I can only bring your attention on some assets that are considered to be hard assets, as they become very relevant in case of major financial crisis. Please take the time to do your own research before investing.

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