The Old Man’s Views
There is more action on the beaches than in the markets!
Another week has passed, and it seems more traders are on the beach than in their offices. There are lots of stories on LinkedIn, but most of them are just promotional.
I am spending much of my time arranging my Airbnbs and ensuring my guests have a decent holiday visiting Portugal.
Sadly, the same cannot be said for those who came here to establish exchanges in this once crypto-friendly location.
It amazes me that Licenced institutions in Portugal can get the rug pulled from under their businesses overnight, by a few bankers, who decide to change their minds.
Suppose you have bent over backward to fulfil the demands of government legislators and complied with every regulation imposed on your operation. Only to discover one morning that banks have decided they no longer want your business? Nasty!
It doesn't surprise me that much, because in a country the size of Portugal, bankers and politicians work "hand in glove" with each other. And we know most politicians are not fans of cryptocurrencies.
Moreover, with the ECB moving towards introducing CBDC, the last thing they need is a flourishing crypto industry operating within their domain.
We in LinkedIn land know the difference between crypto-currencies and CBDC. However, the vast majority of the population is too busy trying to put food on the table and fill their cars with fuel to concern themselves with what plans governments and central bankers have for us in the future.
If you are on holiday, try talking about the dangers of CBDC in the beach bar. Most people haven't got a clue, and most people don't care. They want another beer and to talk about the bird 20-yards away wearing the Brazilian bikini.
If you say anything about BTC, all they will offer is condolences for how much you have lost.
We can talk freely about the business and what we think will happen in the future among our own groups of crypto-enthusiasts. Still, the truth is that it is becoming more of an echo chamber than an attractive business. Indeed, an event like what happened in Portugal is not improving our industry's profile.
I am not being hostile toward the industry, and I see no reason why cryptocurrencies will not thrive when CBDC replace FIAT.
But there are undoubtedly a lot of unknowns concerning how the industry goes forward.
The bank of England is forecasting the current recession might last into 2024, which is in line with some of the forecasts coming from bigwigs in the crypto-world, who expect that is the year the bull market will resume.
Technically, we can make all kinds of forecasts: Think of a number, and draw a few lines to justify it. But the quality of technical analysis is not the question.
The question we do not know the answer to is what are our politicians going to do?
In the USA, the current regime is trying to redefine what a recession is.
In Europe, Christine Lagarde said she would print as much money as she deems necessary to ensure the Euro survives, (which is the most frightening thing I have read for a long time).
I have been around a long time, but I cannot remember a period when the future was so difficult to forecast.
My portfolio is diversified and I still have a lot of ammo available to employ if I see something in the markets of interest. But I do not see any reason to place long-term bets in the current economic and political environment, especially on financial instruments.
Whatever capital markets do over the rest of the year, I am sure there will be ample opportunity for investors and speculators to generate profits, especially over the short to medium term.
But we are going to need to be proactive and remain agile.
I don't like Europe or the Euro and prefer foodstuffs over non-ferrous metals. But I haven't pulled the trigger on any new trades, not yet anyway.
For those of you who have come into the world of speculation via cryptocurrencies, I strongly advise that you spend the next month or so examining other markets and instruments, to accustom yourself to how different markets work and move.
It will not be time wasted.
Regarding movement, I have to sign off now. The girls are playing beach volleyball, and I don't want to miss it!