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Hi Everyone,
It's difficult to explain all of the various moving parts that make up our global supply chain, but it's becoming increasingly clear that things are not working quite right.
From post-pandemic labor shortages to the semiconductor global chip crunch, the recent blockage of the Suez Canal, the ransomware hack on the Colonial Pipeline, and commodity prices that are off the charts, things seem more than a little off.
Adding fuel to the fire, a recent report from Bloomberg highlights that many manufacturers are now hoarding the supplies they need to produce their goods, very similar to the way we all went out and stockpiled toilet paper at the beginning of the pandemic.
Marc Bitzer, the CEO of Whirlpool, described a rather upside-down situation wherein they are now producing machines based on which raw materials are available, rather then what consumers are ordering.
"It is anything but efficient or normal, but that is how we have to run it right now," Bitzer stated. "I know there’s talk of a temporary blip, but we do see this elevated for a sustained period."
To me though, focusing on all of these minor blips in the system and one-off events constraining supply is rather short-sighted, missing the forest for the trees, if you will.
The root cause of inflation right now is all the new money in the system. We've been saying it for months, maybe now you'll say it with me...an infinite amount of money is competing for a finite amount of goods and services. |
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Fresh FUD
As bitcoin tests critical support at $42,000 per coin, there's a wave of new FUD to support the bears.
One major source of this FUD is the People's Republic of China, which has once again decided to ban bitcoin. Hello China, 2017 called, and they want their headline back. ... |
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The key difference between now and 2017, of course, is that Chinese crypto traders account for a much smaller portion of the overall volumes then they did back then.
Still, even those who have been responsible for the inflows so far this year are now going in the other direction, as bitcoin funds saw a record $98 million in outflows last week.
In addition, the latest Bank of America fund manager survey found that... |
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| The silver lining in all this is that even though hedge funds may think that bitcoin has already had its heyday, they are increasingly showing interest and moving money toward altcoins, which is why it pays to be diversified in this market. |
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Popping hot
So, many people are starting to think that bitcoin may have already had its run.
Obviously enough, the lower it goes, the more attractive it becomes as a long-term investment, but for now, it's clear that investors are looking for other assets.
Figures from DeFi Pulse and Defistation confirm that the total value locked (TVL) in decentralized finance assets has only retraced slightly when compared to bitcoin. Also, the NFT market is popping hot.
Please note that there will be no daily newsletter tomorrow, as I'll be out attending a wedding. We will have one for you on Thursday, May 20. Have a great evening. |
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Mati Greenspan Analysis, Advisory, Money Management |
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