It has become apparent with the latest Consumer Price Index (CPI) report that cash is a liability. The new CPI report has inflation at a crazy 9.1%. I still don’t believe this is accurate based on how some metrics are calculated to suppress the nominal rates. Many experts say the nominal inflation rate is closer to 20% than 10%.
It is imperative to pay attention to what the federal reserve decides to do in the coming months to tackle this problem as it only seems to be getting worse. Currently, they have been extremely hawkish with monetary policy, pulling billions of dollars of liquidity effectively from the markets using a quantitative tightening “soft landing” approach. Stocks, real estate, crypto, and even businesses are struggling through this sudden shift in the FED’s monetary policy to increase interest rates periodically throughout the year. The baby boomers may be the most affected by this as they see their retirement accounts decrease regularly. All markets are suffering, not just crypto.
To make matters worse, many companies are laying off workers as they can no longer obtain cheap debt to keep operating as usual due to the Fed’s stance on a gradual increase in interest rates. Companies like Peloton, which saw exponential growth over the past few years, have laid off thousands of workers. Even the big MAANG (Meta, Amazon, Apple, Netflix, and Google) companies like Netflix are laying off employees because of the current macroeconomic environment.
There's no place to hide really. Cash might be the safest short-term bet, but you still lose around 9-20% annually on your purchasing power holding cash. You run the risk of the FED reversing their policy, beginning quantitative easing again, and missing out on asset appreciation. If you look closely, there are plenty of opportunities to put your money into assets that at least cash flow while you wait for equity appreciation. In the crypto world, you can mine, stake, yield farm, and become a node operator to earn passive income and not have to use much risk capital during these volatile times. In our investment research group and advanced course, we teach you proper strategies to still capitalize during volatile, contractionary bear market periods while still having full sovereignty of your assets.
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