E Tuesday Talk: Market Bubbles And Global Troubles

shallow focus photograph of black and gray compass

Just under a week into the Biden administration, the stock market seems to be staying the course. Yesterday the Dow Jones Industrial Average (DIA) closed down 37 points at 30,960. On Inauguration Day last Wednesday, it closed up 116 points at 30,930. The closes for the S&P 500 (SPX) and the Nasdaq (NDX) on Monday were 3,855 and 13,635, respectively. The S&P gained 14 points and the Nasdaq gained 93 points. Currently, futures for the 3 indices are trading light green with a twinge of red. Concern regarding COVID-19 globally and in the U.S., uncertainty regarding Biden's stimulus package and US-China trade tensions are some of the issues weighing on market makers this morning.

Another issue on the mind of TalkMarkets contributor Raymond Matison is the state of the U.S. Dollar. Writing in USD Has Crossed The “Event Horizon”, an exclusive for TalkMarkets, Matison says:

"(The) unrelenting growth of national debt, which is the basis for currency creation has reached a global inflection level such that the value of fiat currencies across the globe, with several notable country exceptions, are drawn into a whirlpool of decline that will ultimately result in its near-complete loss of value." 

Matison in his long and detailed article cites several examples of just why he believes this to be the dollar's fate (UDN). A contrarian to much we have been hearing elsewhere he believes that, "The virus pandemic will continue to depress economic activity, employment, incomes, and social stability for the next several years."

Much of what Matison writes may seem alarmist, but against the backdrop of a hot stock market it can't hurt to listen to other voices. In the end he is an advocate for blockchain currency as the asset to get the world out its current currency conundrums. Below are some of his concluding thoughts:

"It is now clear that the period of “The American Century” is passing, and the torch of the U.S. dollar’s global currency is about to be handed to its next recipient. Over the last seven-hundred years, this global currency torch has been passed from Portugal to Spain, to the Netherlands, to France, to Britain, and to the U.S. – so while the passing of this torch to the next recipient may traumatizing, it is historically quite common."
The next recipient of the global currency torch may not be a single country, but it could be a group of countries.In addition, because computer technology quite unintentionally is solving the Triffin dilemma, it is possible that no country takes on the role of a global fiat currency, but that a tokenized/computerized bridge currency is adopted for all nations.This technological development would free any single country or group of countries from the responsibility of issuing the global currency with its attendant historical burden of debt and currency emission to serve global needs. Acceptance of a blockchain-issued digital currency for settling cross-border payments that is inclusive to all the citizens of the world...would be a giant step towards a globally better future for all humanity...However, we must first survive the Greater Depression of 2020."   
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Old Time Investor 1 month ago Member's comment

Thanks for linking to Erik Conley's article in this excellent round up. I had not known of him before today, but his article was quite interesting and I've added him to my follow list.