Storm Clouds Are Gathering - That Could Be Good For Crypto
I've been watching the economic burps going on in every corner of the world the past few weeks, including the crypto community and of course here on Steem. I've watched these burps for a very long time (yes I am really old) and I don't pay much attention to most of charts and inverted curves and all the crystal ball gazers who predict economic rises and falls. I've learned to look at one indicator that has never failed me. My small business clients.
Even though I've technically retired from helping small business create a successful online presence, I am still in touch with many of them as they have often become friends over the years. My phone has been ringing almost every day with reports of sliding sales. In the last crash - what did they call it? - the Great Recession, the 2008 Economic downturn - whatever euphemism they tacked on, every small business I worked with had the bottom drop out along about July or August. The "real" crash didn't make itself known until October and November, but by then my clients were in hunker down mode "I sure hope we survive this thing".
What I'm hearing is a slowdown, not the drop off the cliff they experienced in 2008. A worrying slowdown at the time of year most retailers make about 35% of their annual sales. This is worrisome. Most of the economic gurus focus their attention on bond yields and major corporations and market segments. I have always felt that this wasn't the way to go.
Many things make up an economy, many things that can't be measured with little ticks and graphs and sage talking heads mumbling about inverted yield curves and long term interest rates. People make up an economy. Common, everyday, people. Not moguls in glass walled office space sitting high above the bustling crowds.
When people go to the grocery store and find that the things they bought last month now take more money to purchase, they don't care about trade agreements, political maneuvering, or what the sage talking head is spouting on his cable news appearance. They know one thing - the money in their pocket isn't going as far this month as it did last month.
They reprioritize their buying decisions. "Hey, we can wait a little bit for that new stove. Let's not go all out for Christmas this year. We can probably get another 1000 miles out of those tires if we're careful." There are only two ways to make a budget balance - bring in more money or cut spending. Most people haven't been able to bring in more money in decades. So cutting is the only option. And that cutting doesn't affect the big boys right away. Their Christmas purchase at Amazon is a microscopic part of Amazon's bottom line - but it can be a percentage point or more for that small bed and bath store that sells Christmas themed sheets and towels.
Thus, my small business clients feel the pain of the coming economic storm long before it's made itself known through the "indicators" that most high paid money watchers pore over every day.
This will be the first global downturn that crypto has gone through. Is it possible that crypto markets are also a canary in the coal mine for predicting widespread economic woes? Does the crypto market have a large number of small investors who are now cashing in Bitcoins and Etherium and even Steem because they need that money to buy shoes? I've watched Bitcoin not react to NYSE sneezes. I'm not seeing the price of gold rising dramatically - a sure sign in the past of coming problems.
Is it possible that the crypto market has an opportunity to become a true alternate means of trade? Bankrupt countries seem to think so. Argentina and Zimbabwe are toying with the idea of using crypto as a means of exchange. While any ICO those corrupt leaders might come up with would make me rn for the hills, it does raise an interesting question. Are we in a position where crypto is not going to go through a long and deep crypto winter, but rather might be poised for a crypto spring? Where the PEOPLE, the one true economic indicator decide enough is enough and move to the only viable global means of trade that exists.
While I personally think that we are headed towards a very ugly global economic meltdown, I also think this could be the opportunity for crypto to fulfill its destiny as a major part of the global economy. Only time will tell, but as a denizen of the world, I much prefer to watch and listen to "the common man" rather than perusing yet another performance chart. And I know that while Steem and Bitcoin and Etherium and all the rest are pretty low right now, I can't help but think what they might be worth in the coming months. This could be the last gasp of a rotten system with the new kid on the block ready and able to take over the reins of global currency exchange.