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Key signs of every financial boom and the coming (crypto) crash

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@gogreenbuddy
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What are the characteristics of a financial boom in history? The nice thing about history lessons is that it teaches you those things We had many booms and I will focus on ''Modern'' crashes since 1920 and see if we again are doing the same thing.

                       Some famous crashes 

Depression of 1920-1921

  1. The return of veterans from WW1, the huge number of veterans needed all jobs & healthcare.
  2. The economy had to switch from a war economy to a peace economy where you make different goods. The government had no solid reason to keep going into big debt every year as the war was won.
  3. The Spanish Flu costing tens of millions of lives.
  4. the reduction of jobs, the increased production capacity from factories after the war, and the loss of millions of peoples brought prices down so much that there was serious deflation.

All in all this one was one of the last crises not ''created'' but a result of other events.

''The great depression happened in 1929-1930. I view this one as the first artificially created modern crisis.

  1. The stock prices crashed more and more averages joes invested for the first time in an exchange and they keep making big profits between 1920-1929. One of the first good rules when ''everyone'' suddenly is interested in investing then you've got your first warning light.
  2. A severe drought hurt the USA economy the western world was now connected and USA dragged other nations down into the crisis.
  3. People got ''hurt'' by the stock prices and stopped spending resulting in overcapacity of factories, unemployed and lower prices of goods.

The Asian Crisis of 1997 This crisis is less known in Europe and the US but it was mainly caused by ''Hot Money'' from the west. Since the 90's the west re-discovered Asia and saw its gigantic potential. They were not wrong but the money flow into those countries was way too big. A big artificial bubble started to grow and most of the investments were made in USD, not in the local currency. A repeating big problem in economies is debts in foreign currency. This is a serious risk and should always bring a warning light. Most Asian countries couldn't sustain the huge growth numbers and their local currency started to decline making the debt unpayable. Indonesia & Thailand & Malasia lost almost half their economy.

Sidenote in 1998 Russia had the exact same situation as it had huge growth after the fall of communism. The growth couldn't be sustained (as it never can) and Russia also defaulted on its debt making the Russian ruble crash.

Another big lesson '' huge growth'' for many years is never ever sustainable and it will always come down. Let's say any economy or stock or coin above for example 5% will have to make a crash to come back to reality.

Dot-Com bubble Now we're finally getting more recent yes the internet! The internet was everything and would dwarf every other industry. Every concern was answered by ''this is the internet!''. Does the company make a product? , Do we need the product? , Why is a cheese company suddenly worth 500% when it adds a website?

Things didn't need to make a product, profit, have an idea, or anything to become valuable. Start to recognize this? Keywords of this crisis: IPO's, Paper Money, Big Fast, FOMO, Venture Capital everywhere. Nobody lost money. Even the survivors & strongest companies in hindsight like Amazon & Cisco got butchered in this crisis, most companies just disappeared.

I'm gonna skip the real estate bubble as I lost every Millenial already by talking about crashes instead of instant gratification. Nobody lost money in real estate, Big Fast, nobody cared how or what because of profit blablabla.

The current bubble. I'm going to call it the current bubble as we tend to give it a name after it bursts. Humans are funny right? I never named my dog after it died but ok.

So what makes me such a fucking grinch.

  1. Are we pumping money in something like monkeys? Check
  2. Are we printing money like monkeys? Check (even though the printing isn't so terrible the printed money is allocated almost completely to avoid a direct debt crisis.
  3. Blinded by profits and we don't care what we invest in? Check
  4. Are there things that get insanely big without making a profit or a product? Check
  5. How long are we growing fast, All-time highs, everyone makes insane profits? check
  6. are inflation/deflation or interest rates doing something unusal? check

The good thing is this time it's different, but it never is.

Am I saying you should sell your coins? No, partly because this time EVERYTHING is in a bubble from real estate, stocks to fairytale coins like USD and Doge:D.

Does it make sense to start looking in the coming 3-6 months for the strongest crypto coins that probably survive a crisis? Sure :) Are their very safe investments to reduce the big risk of your crypto portfolio? Sure, look into water rights, wetlands, farmlands, (Mid) and East-European Real estate, profitable personal skills, Solar Panels, and Classic cars etc. Those investments won't crash and you can easily ride out a crisis especially in a Porsche 911 :).

The Last option is to disconnect from the internet and any other media source for 2 years. Then the crisis is forgotten and most prices are restored like it never happened. The paws required for this are mummified paws...

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