This morning, I woke up and realized something horrendous. Right now I am $30K+ poorer than I was this time last year. That’s a lot for me. I could have built my first Bulgarian property empire with that money. I could have bought 2 full-time wives from Kazakstan. Or I could have bought a small houseboat in the UK, and started living rent-free on quaint canals surrounded by picturesque scenery.
Sadly, I didn’t do any of the above. Instead, every day I looked at my investments dwindling in value and I said to myself, “I’d be stupid to sell now.” Yes, these are the greedy voyages of your average cryptocurrency investor. There is good news, though.
Because I bought Bitcoin way before coins even reached $1,000 in value, I’m actually still over 1000% up on my original investment. In fact, I’ve done everything right as far as investing in crypto is concerned. I bought in early. I diversified my investments across coins which today are still holding strong, despite widespread catastrophe, and I never panic sold or let fear of missing out, spur me to invest more than I could afford to.
Of course, all of the above means nothing, After all, I’m still minus gains I could have realized, not to mention my imaginary Kazakstan wives. As surprising as it might sound though, I’m still very confident about cryptocurrency. For this reason, I’d advise anyone reading this who has $100 to spare, to seriously consider investing in a few crypto coins. Not just any coins. Specific coins like Ripple XRP, DigiByte, Cardano, and Litecoin.
I can’t list all my reasons for flagging those coins in particular. There are far too many to detail and I know that most people here won’t understand most of them. I also can’t guarantee that these coins will ever realize significant returns. What I can say, is that if you ever wanted to invest in cryptocurrency as a kind of long-term $100 lottery ticket, those are the coins to think about. Buy em, learn how to store them offline, then lock them away for 10-years and forget about them.
And now for a short lesson in real economics.
As for why I think getting hold of some crypto now is a good idea, I’m sorry, but the economic world you live in at present is a lie. Think matrix level lie.
In the UK and Europe since 2008, we have had ‘Austerity’ pushed on us. This is explained to the man or woman on the street, as cutting back government spending to pay off old debts. This makes the public imagine governments as households who have overspent on their credit cards. To make things right, those households need to cut back on luxuries and maybe even downsize so they can pay off their balance.
Sadly, this isn’t what austerity is. In every case, governments embracing austerity have spent less year on year on public services, in order to borrow more. When Austerity was introduced in the UK in 2008, government debt to GDP levels stood at 76%. Today dept rest at approximately 90%. This debt level keeps rising faster each year, and as it rises it becomes completely unserviceable. This is a domino.
The next domino is the global housing market. Everybody considers property a safe investment. Once your home is yours, it is yours. However, in Europe, the property market is a train wreck happening in slow motion. Where I live in Malta, there is a surplus of 70,000+ newly developed apartments. These started being built around 2001 and initially sold at a price of $40K - $50K, to predominantly overseas buyers. In 2008, overseas buyers stopped buying up property. However, developers didn’t stop building. Moreover, why this was is simple.
Need for new construction is intrinsically tied to economic growth. If Malta stopped building because of decreased demand, the wider economy would suffer. For this reason, the government started subsidizing new developments, while realtors started simultaneously overvaluing existing property. Today, the same empty property which was priced at $40K in 2001 (and didn’t sell), is valued at $200K+, and still doesn’t sell.
Of course, at some point, developers stop building for the sake of building. However, in Europe, EU member countries have a very interesting way of fiddling the books. Every year in the town where I used to live, the local government would demolish the promenade in November, before rebuilding the whole thing behind a big blue sign saying "development / regeneration / ecotourism development sponsored by the EU.
This isn’t a Malta specific problem. In Spain, they do the same. In Hungary, they build random libraries and resort areas in places where they aren’t really needed or ever put to use. It’s all a bit like a scaled down version of the Chinese ghost cities initiative.
The end problem is that local people are priced out of the property market. Endemic overvaluation means that locals know better than to invest anyway, and the longer properties stand empty, the further they fall into a state of disrepair. Moreover, this problem isn’t specific to the Med.
In places like Miami, Vancouver, Germany, Singapore, and a hundred other areas, similar property bubbles exist. Everything looks sleek and shiny as you are driving by, but the architecture out of the window might as well be a house of cards standing in the middle of tornado country. This is domino number two.
The third major domino waiting to fall after the two already mentioned concerns big government. I would love to have my own business. Once, I and my ex were even on the cusp of opening our own restaurant. However, I noticed something back in 2010. Specifically, that before the UK hospitality company which I was then working for could open for business each year, we had to pay £5K-£10K, just to cover our behind as far as health & safety and food hygiene was concerned.
As strange as it will sound to people like Americans, upward social mobility is starting to hit a brick wall. Remember that lemonade stand of yesteryear? Well, that ain’t possible anymore. You need a license now. In the F&B business, you need annual gas safety checks, fire safety inspections, environmental health inspections, the list goes on. The same is true for retail and this is why modern entrepreneurs usually fall into one of two categories. They either buy property to let or move to the Internet to sell whatever they are capable of.
There are fewer generation owned restaurants in the city where you live. Instead, there are specific multi-national brands which can afford the high rents and ever-increasing annual costs of doing business. The rent is higher in the surrounding area because of the presence of big brands and the increasing inability of people to afford housing. That’s okay though because you have the online entrepreneurs. The thing is you don’t.
Since GDPR was introduced in May this year, investment in new startups in Europe has dropped by 80%. Big brands can afford to comply. Startups can’t. And like a contagion, new startup pessimism is reaching non-EU shores. 2018, if you like, is the year where doing business online became as risky for startups everywhere as opening a real-world store.
The downfall of the small to medium-sized business is domino number three. However, there are hundreds of other economic dominos which will eventually start falling. - And they will fall.
As for crypto, nope I’m not deluded enough to think it will be the savior of the economy. It will be that for a while though. The end is coming. Don’t go full freak Bitcoin investor. Just get your $100 lottery ticket (if you can afford it) and wait. - Or don’t. Up to you. I might be wrong, but I consider people here my friends and this is a personal piece of advice which I think could be of benefit. Just don’t put in more than $100 and especially don’t if you can’t afford it.