Prices Will Get Even LOWER

I will try my best to summarize everything in a few paragraphs as this is very complex and is quite a lot. I also previously made posts about this topic and you can check previous posts for further info. Most of the sources are also included. Other sources are on previous posts.

As a general reiteration, virtually all countries around the world are struggling to fight inflation as well as being hit hard by the effects of climate change. There is high single to double-digit inflation in almost every country you look at. There are massive floods, droughts and high temperatures that are crushing economies, by drying up some of the most key waterways in the world such as the Rhine in Germany, the Yangtze in China, the Danube in Western Europe and the Colarado River in the US. Entire sections of these rivers have dried up that are causing companies to decrease or outright halt operations.

Russia has stopped pipeline flows of natural gas to Europe, having provided 40% of Europe's energy pre-war. They say flows will not resume until Europe lifts sanctions meaning that they have lost almost half of their energy from a cheap and convenient energy source. Neither of the sides are likely to bend to the either, meaning that Europe is about to face winter while having their main source of heating and energy cut off. It is to the point that classrooms in Normandy, France have begun arrangements to heat their classroom with wood. French companies have to submit plans to reduce their energy usage by 10%. German energy bills are set to increase by around 500 euros a year while Germany is expected to lose 225 billion over the next two years if gas flows stay halted. OFGEM, the UK energy regulator, has already increased energy price caps by 80%, with room for further raises if necessary as UK energy bills a projected to cost twice the monthly wage in 2023. Similar stories continue across Europe. EU states have agreed to cut energy usage by 15%, a measure that will suffocate the economies across Europe.

China, the worlds largest exporter, is going through a Lehman Crisis moment as youth employment is almost 20%. There was a theft of 6 billion from customers through the banking system and there are now widespread protests and customers are refusing to pay mortgages and effectively defaulting as real estate companies are themselves heavily overleveraged and out of cash. Two real estate companies have begun what is expected to be a wave of defaults. Meanwhile, China continues its mass lockdowns at any hint of COVID. There have now recently been arrests of dozens of individuals related to the banking theft. There are now reports of banks restricting withdrawals to only a few hundred yuan(few dozens USD). In the crypto space, we all know what withdrawal restrictions mean.

A recent industry-wide issue has now just occurred that European energy companies face 1.5 trillion euros(same amount in USD) in margin calls. How this occurs is that companies generally hedge their business operations in case of some systemic risk like floods for an agricultural company. This means that even if there are floods you have bought some sort of insurance so you don't lose everything if your business is heavily affected. Basically, all your eggs are not in one basket. However, since Russia has cut off gas flows the companies that provide this insurance have in effect raised the premium and energy companies have to pay more for the insurance. In a time of massive inflation and high rates by banks these energy companies have to find even more funds. And as usual, all these costs get passed right back onto the consumer, the little guy. So the already terrible energy bills are going to go even higher. This can be mitigated if the governments decide to spend millions to subsidise citizens, but then we know that game. All the money governments spend to help citizens come right back to bite them through inflation, at a time of already super high inflation rates. There is no way out of this.

All of this meanwhile countries continue to struggle to feed themselves as grains, that account for 45% of the world's diet, and around 25% of which comes from Russia and Ukraine. Food supplies are further reduced by the aforementioned climate and environmental issues where temperatures are either too high or too low as well as the effects of drought causing crop failures. This is sure to affect developing countries.

Another factor for developing countries is a lack of foreign exchange. Fed is continuing interest rate increases and the dollar is still skyrocketing in value and so further reducing supply. Developing economies need forex to survive which is precisely why they are called developing. The manufacturing and production are weak and most economies work by simply buying goods from foreign markets and selling them locally. But forex is needed to buy the foreign goods initially, forex that is very low in supply.

The US has already shown weakness and signs of recession from asset prices, to lay-offs to the unemployment rate and the rise of multiple job-holders and continued Federal Reserve rate increases, massively increasing consumer debt levels and loan default by prime borrowers. I dove into these already on previous posts. I called the crash from around ~$25,000 in these earlier posts as well.

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Open interest in top tokens has also surged in anticipation of the merge. Exchanges are seeing record short interest in top tokens.

I am not calling anybody out. I am not insulting anybody. I am just saying that while yes markets might be a casino, at this point this ain't a game anymore. At this point, if you know you can't afford to lose what you have in, take out what you must from the market. Where we are right now, things look bad and have much room to get worse. If you are into shorting tokens you may have a good time, but otherwise, the signs look downright catastrophic.

Sources:

https://www.reuters.com/business/energy/wide-demand-reduction-only-feasible-solution-europe-energy-crisis-equinor-2022-09-06/https://www.dw.com/en/dry-rivers-traffic-backed-up-on-rhine-as-engine-failure-worsens-woes/a-62838900https://www.aljazeera.com/news/2022/9/5/russian-gas-flows-halted-until-europe-lift-sanctionshttps://atalayar.com/en/content/drought-and-alarming-declines-river-flows-threaten-global-economyhttps://www.reuters.com/business/energy/german-energy-bills-rise-by-another-480-euros-year-under-gas-levy-2022-08-15/https://www.nytimes.com/2022/09/05/business/russia-gas-europe-france.htmlhttps://www.cnbc.com/2022/05/24/goldman-sachs-expects-more-china-real-estate-defaults-switches-to-bear-case.htmlhttps://www.bloomberg.com/news/articles/2022-08-15/china-youth-jobless-rate-hits-record-20-in-july-on-covid-woeshttps://blockworks.co/investment-products-shorting-bitcoin-see-record-inflows/