A little over two years ago I started making predictions about what was going to happen to the world's economy and how that was going to affect cryptocurrency. I didn't know when the big changes were coming but I could not see the current system lasting more than another five years.
It was during that time that I predicted that within five years the price of SCR in USD value could possibly reach $100 or more. So here we are now some two years later and we are now witnessing the complete collapse of the world economy. Some people are saying that we are entering a recession that will be worse than in 2008. Others are saying that we are looking at another Great Depression possibly worse than in the one that happened in the late 1920s and 1930s. There are also rumors of rampant inflation, or possibly even hyperinflation. But, still, others say that instead of just inflation, it will be more like the Stagflation that we endured during the 1970s and '80s.
The voices that I have been paying most attention to are the ones that are talking about a complete economic reset into a totally new economic system based on a new economic model. The following is what I think may happen, and as you read this understand that I'm just a deep thinker and I have a vivid imagination that allows me the ability to sometimes project current trends into the future. But this means that if my assumptions are incorrect or if I have received incorrect information then this analysis will totally collapse and be completely false. I'm no financial expert and I have no formal training in finance, so this is just my personal thoughts and expressions and it is given here purely for entertainment purposes. If it turns out that I am correct then feel free to declare me a genius, and if I am completely wrong you can have a good laugh about Pete and his crazy fantasies.
What is a Recession?
"A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region. It had been typically recognized as two consecutive quarters of economic decline, as reflected by GDP in conjunction with monthly indicators such as a rise in unemployment. However, the National Bureau of Economic Research (NBER), which officially declares recessions, says the two consecutive quarters of decline in real GDP are not how it is defined anymore. The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."
What Is a Depression?
"A depression is a severe and prolonged downturn in economic activity. In economics, a depression is commonly defined as an extreme recession that lasts three or more years or which leads to a decline in real gross domestic product (GDP) of at least 10 percent. in a given year. Depressions are relatively less frequent than milder recessions, and tend to be accompanied by high unemployment and low inflation."
What Is Inflation?
"Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over some period of time. It is the rise in the general level of prices where a unit of currency effectively buys less than it did in prior periods. Often expressed as a percentage, inflation thus indicates a decrease in the purchasing power of a nation’s currency. *
Inflation can be contrasted with deflation, which occurs when prices instead decline."
What is Stagflation?
"Stagflation is a seemingly contradictory condition described by slow economic growth and relatively high unemployment, or economic stagnation, which is at the same time accompanied by rising prices (i.e. inflation). Stagflation can also be alternatively defined as a period of inflation combined with a decline in gross domestic product (GDP)."
Source: https://www.investopedia.com/
What is an Economic Reset?
Is a change in the negotiated agreement between major trading Nations for transacting international business and settling debts.
Example:
"The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained its external exchange rates within 1 percent by tying its currency to gold and the ability of the IMF to bridge temporary imbalances of payments. Also, there was a need to address the lack of cooperation among other countries and to prevent competitive devaluation of the currencies as well."
Source: https://en.wikipedia.org/wiki/Bretton_Woods_system
* This is the modern definition of inflation, earlier pre-1980 definitions for inflation included something along the lines of an increase in currency supply and or debt and said nothing about increasing prices. It makes you wonder why this has changed.
No matter what happens from this point on we can be certain that the normal flow of currency has already been severely disrupted and thus we can not avoid a turbulent economic future. The length and depth of this disruption are yet to be determined but what is becoming very clear is that the normal incomes of millions of households all around the world have been negatively impacted already and the shockwaves from that fact alone must now work its way through the entire system. The longer people remain out of work the worse the effects will be on the overall economy and greater will be the disruption in the flow of currency.
Every debt in the system that is defaulted on because of these disruptions is going to have causational secondary effects, I hear these effects referred to as an "Unwinding" events because all of the legal and monetary transfers must work their way through the courts and the financial markets until a final resolution has been reached. For every default, there are asset claims to settle and debt holding counterparties that now may not be able to meet their own obligations. These could involve many different financial and investment entities which then must absorb these losses while attempting to stay solvent themselves. It does not take that many defaults in the system to cause a major problem, and this is one of the reasons that I believe that we need a new system altogether, one that has not been corrupted to the point where a relatively small disruption can lead to a complete failure of the entire system.
Now it's time to start getting into what I think is about to happen, and as you can probably guess from the meme above, I believe that we are going to see some aspects of all of the above economic woes.
Recession/Depression - We are already in a recession so now the question is will it turn into a full-blown depression? I believe the answer to that question is decidedly yes in that this pandemic is going to continue for between eighteen months and two years before we are completely free from its effects on our lives, and the potential exists that it will become a permanent threat on our society requiring us to completely restructure our lives. I do not believe that COVID-19 caused the economic collapse, I am of the opinion that the economy has been on life support since the last recession allowing time for the construction of a new financial infrastructure that could support an entirely new economic system. So as we move forward I believe that the current recession will continue and deepen until it becomes a deep dark depression.
Inflation/deflation - We are already seeing price inflation that has been somewhat dampened so far by the process of limiting the purchases of goods that are in short supply (Covert rationing). But as the supplies of needed everyday items dwindle more and more then things will necessarily revert to a more pure supply and demand structure and the prices for these hard to find items will soar. The Federal Reserve is also basically handing out helicopter money through many of these bailouts, not all of the money that they are creating gets into the real economy, but enough of it does to drastically increase the money supply. When you couple an increasing money supply with an ever limited supply of key resources you are definitely going to get inflation as an outcome.
On the other hand, there will be a huge glut of other items. Imagine how many used vehicles there will be available for purchase during the next two or three years. Millions of overpriced vehicles will be repossessed from owners now unable to make those huge monthly payments, companies will go out of business and millions of vehicles will come in off of lease with nowhere for them to be stored and there will no longer be any demand for them.
I can not predict what items will be inflated in value and which ones will suffer major deflation in value because it will be different in different geographical locations. But for the most part, you can think about anything that your country does not produce and is an essential item for life and comfort and suspect that the cost of those items will rise dramatically. Luxury items that can no longer help put food on the table or are useless to people under the current living conditions may drastically deflate in cost. Also, items that are typically financed when purchased like vehicles that I've already mentioned and things like vacation homes will also become plentiful at greatly reduced prices.
For most of us, these economic problems are probably going to cause a marked decrease in our standard of living. I believe that most people that currently have shelter, energy, food, and water will continue to have access to these things until a reset happens and the economy begins to get back on track. But the struggle for necessities might mean giving up most of the luxuries and freedoms that you have enjoyed up to this point. For instance, those who are jobless may receive enough from the government for basic sustenance, but not enough for anything else. If you are fortunate enough to find work or keep your current job you will probably earn much less than you did previously, and unions will have little power to negotiate when there are thousands of qualified people available and begging for a job like theirs.
Is there a solution available for those who are facing a loss of income situation like this? Is there a way right now for someone who is out of work but who still has some cash flow to position themselves online so that they can start earning an income? I say that there is and that it has already been staring them in the face for several years now!
Most of the people that I know who have heard of blockchain technology and cryptocurrency only see it as a possible risky investment, they have never thought about it for it's earning potential. There are already several ways to earn cryptocurrency and there now are easy ways to spend what you earn by using any one of the readily available crypto debit cards. I have completed customer surveys from two different crypto debit card providers and both asked for suggestions on how they could improve and grow their business moving forward. I advised both of them to onboard every blockchain-based social media platform's cryptocurrency as well as any other site where cryptocurrency can be earned. If they will do that now and have everything already set up and established then when these platforms begin to receive mass adoption they will be ready for a huge cash flow boon.
Scorum is a great example of this concept, imagine what your income here will be like when SCR reaches $1 each, investment-wise that is a very short distance away. In fact, if only 150,000 of the world's nearly 8 billion people joined Scorum and tried to purchase 100 SCR on average at market price then the value would surely go past $1 per SCR. Considering that Steem gained over one million members during the last crypto bull market when we were not even in a financial crisis, then I'm pretty confident that Scorum can gain way over 150,000 new members looking to earn some SCR that is gaining in value daily!
Now, what if you were taking that new higher SCR income and spending it for the products that you and your family needed using one of those new crypto debit cards? The debit card platforms would have access to a large group of eager crypto earners, and they would be leading the drive for more people to join social media sites like Scorum and start earning cryptocurrency for themselves. It would produce a win-win situation with the more people who joined blockchain-based social media the more cryptos there would be available to spend using the debit cards.
How much would SCR be worth if there were a million members signed up on Scorum all looking to build an account and earn some extra money to survive on? How fast do you think someone would ditch Facebook if they couldn't pay their bills and put food on the table but they had a cell phone and they found out that they could earn some cryptocurrency on Scorum talking sports instead? If there are a million members on Scorum earning really good money talking about a subject that they love and that they know a lot about, then how long would it take to gain a hundred million members? There are 370 million Americans and probable 100 million of those are sports fans. What if this coming depression showed them why they need to get involved with blockchain projects like Scorum?
My theory from the very first time I joined a blockchain-based social media site (Steem) is that the reason people have not yet flocked into these products is that they have stayed with the familiar and because they don't have any need for cryptocurrency right now. But what if the situation has changed? What if they and everybody they know is suddenly in a situation of need or they are fearful that they may need extra income in the near future? What if they lose trust in their fiat currency and decide to go back and give cryptocurrency another look? What if the stock markets take another drastic fall, they start to see bank failures on the evening news, and at the same time, they hear reports that Bitcoin is mooning? If that were you wouldn't you now see the need and wouldn't you start to take a more serious look at cryptocurrency?
If we are witnessing the beginning of an economic depression and if that depression is going to culminate in a complete systemic failure of the current economic system, then where will investors and wealthy people put their money to keep it safe and to earn any returns on their investments? Where will all of the out of work people go to make any extra money? I believe that what we are actually seeing is what blockchain technology was designed for and why Bitcoin was introduced to the world in the first place. In my humble opinion, we here at Scorum are already living in the beginning of the new economic system and we are part of the beginning of Internet 3.0. I believe that both money and people are soon going to flood into blockchain like a tsunami!
After living through the last recession and reading about what almost happened and how close the world came to an economic disaster way back then, I started looking for alternatives to that system and ways to protect my own family if it happened again. I was all over precious metals and I was trying to set up a way to buy some silver every month and safely store it away for an emergency. I joined Steem without even knowing what it was, my account just sat there for six months earning nothing. Then I saw Bitcoin on the news and they were talking about cryptocurrencies and blockchains and I said: "Hey wait a minute, didn't I join a blockchain-based social media site a few months ago." Sure enough, I went back to Steem and found out that those 50 free coins that I had been given when I joined were now worth $50 and all that I had to do to earn more was to be active on the platform!
I realized right then that this was my answer, Bitcoin was what I needed to be investing in and Steem is where I could start earning cryptocurrency while doing something that I enjoy. That was in 2016 and since that time I have done a lot of research on the subject of blockchains and what they mean for the future. I realized back then that there was an opportunity to establish blockchain-based social media accounts that could supplement my income when the financial collapse actually did happen. But now, because of the crypto bear market, I have had the opportunity to establish an account large enough to possibly replace all of my current income in case I lose it in the coming financial reset.
So I hope that you can see that I have been thinking about and studying this problem for several years and I have been waiting for and expecting this very time that we are facing, minus a pandemic of course. Now it is time to find out if my theory is correct, I have chosen Scorum over all of the other blockchain social media sites because I believe that it has the very best economic model and I'm convinced that the use cases and value of SCR as a utility coin will skyrocket in the months ahead of us.
I have not talked to Vlad or any of the team members lately so I have no idea what the plan moving forward is other than what has been written in the update blog and what is in the roadmap that has been for all intents and purposes put on hold for over a year now. I suspect that the team will be net buyers of SCR at least until the price gets above $0.50 on the market. Then they may become net sellers above that point for any investors coming into Scorum.
I never intend to power down for the purpose of selling my current level of SP, I will probably hold at the 100K level and start selling my earnings above that point after SCR moves above $1 on the exchanges. As people and investors begin to join Scorum there will be more advertising money coming in and the value of SCR will continue to climb, especially after development gets back into full swing again. I am still sticking to my original prediction of $100 SCR and I still have almost three years to get there.
Whether the crypto debit card platforms take my advice or not I'm still continuing to get myself positioned for the months ahead. I now have two working crypto debit cards in hand and there is a third one in the mail. I received my first card through Coinbase and used it for about a year before they discontinued that partnership. Since then I have received and have been using a Blockcard, and after ironing out a few initial bugs it has worked great for me. I also received my Uphold card a couple of weeks ago and there is a wide range of assets that you can hold or spend using that account including gold and silver. I found out about them because of my use of the "Brave" browser. All of the BAT tokens that I have earned so far are in my Uphold wallet ready to spend using this Uphold card when needed. Besides cryptos I also have some silver in my Uphold wallet that is available for spending if needed. I'm pretty sure that Silver is about to moon at about the same time that cryptos begin to take off on their bull run.
Lastly, I should be receiving my crypto.com card in the mail soon. I believe that in the future, having one of these debit cards may be just as prestigious as some of the higher-end credit cards. I'm pretty sure that crypto.com will be one of the first and best blockchain-based banks on web 3.0 and I'm very excited to be among the first customers to get started on something that could one day be a major international financial institution.
Besides Scorum I also have an account on Steem and on Hive. I also have several other social media accounts that I have not really developed yet. But one of the newer social media sites called Uptrennd was brought to my attention by another Scorum member and I'm very impressed with it so far. Their web site is not really on a blockchain yet but instead, they are using conventional centralized servers for posting blogs and comments while paying out rewards to individual wallets with an ERC-20 token called 1UP. I did decide to take the time to build an account on Uptrennd because of their unique economic model that is too complicated to explain here so you will just have to go and take a look for yourself. They do hope to one day make the leap to their own blockchain and if they do this will become an interesting project indeed.
I am also staking coins using a couple of POS blockchain wallets, hopefully, one day these coins that I've earned through this crypto winter will prove worth the effort.
Here is my Blockcard affiliate link: https://dashboard.getblockcard.com/i/WuYwVnlx
here is my crypto.com referral code: 3fnj7ef5gg (everything is done from their cell phone app)
Here is a link to Uphold
I know that this blog has been long and I appreciate all of you who took the time to read about my thoughts on the matter and I would love to hear what you think in the comments below or in your own blog. I wish you all well and I pray that the days ahead will be full of wonderful blessings for you all.
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