Economic experts like Jim Rogers and Peter Schiff are predicting a bigger bear market and higher interest rates for the US economy ,which is quite bullish for Bitcoin and cryptocurrencies. Let’s look into their prediction for the US economy and how this could propel the rise of Bitcoin.
Jim Rogers Predicts Bigger Bear Market
Jim Rogers is an American businessman and a financial commentator. He has also written many best-selling books like “Hot Commodities” and “Street Smart.” His financial commentary and his economic viewpoint are mostly based on Austrian School of economics. In his recent interview, he has predicted that there will be an extreme bear market coming within next two years. This is quite bullish for Bitcoin and other cryptocurrencies since people will try to move their wealth to safe havens like gold and Bitcoins.
Jim Rogers is a businessman and investor living in America. Investors listen to him and also follow his advice since he is considered to be quite experienced and knowledgeable on investment and current economic trends. He said in his recent interview that everything starts small, while everyone seems to be too busy to notice it. For instance, in 2008 Iceland went bankrupt and no one took note of it since it is a small country. This led to the systematic collapse of the banking industry, and finally, we entered the bear market with the fall of the Lehman Brothers.
The bear market doesn’t happen suddenly overnight, but it forms slowly, and only those who don’t see it coming are surprised. Jim Rogers is also of this opinion and says it may take a year and he adds that he can see it coming and points out that there are a number of companies that are going bankrupt in China. Also, the banking system in the republic of Latvia collapsed recently. There are all indications that the bear market could be right around the corner.
Roger says that there might be several reasons that might trigger the next recession and says he is not yet sure if the current trade war, real war or any other reasons will trigger the next economic collapse. But he is confident that if the next bear cycle comes, it will be the worst in his lifetime. The primary reason for it is that the debt of many countries has skyrocketed. His final advice to the public is that they should only invest in things that they understand and stay away from investing in things that they do not know anything about.
Peter Schiff Predicts Interest Rates About To Shoot Through the Roof
Peter Schiff is a famous American stockbroker and financial commentator like Jim Roger. He is the Chief Operating Officer of Euro Pacific Capital Inc. Schiff also voices his strong support for the Austrian School of economics. Peter Schiff in his recent speech in a conference titled “Calm Before the Storm” has also emphasized that the current US economy is at the edge of recession and interest rates are going to shoot through the roof.
Peter mentioned that the US stock market hit its peak in February 2018. He also said the US dollar had the worst January in 30 years that triggered the stock market sell-off. He added that the US government predicted 5.4% GDP growth in first quarter of 2018 but ended up getting 2.2%. This scared the stock market investors and led to the sell-off.
Peter also pointed out that the US government introduced the tax cuts and at the same time passed the spending bill. Increasing the spending but decreasing the earnings has taken a toll on the US economy. At present, the US is running at a deficit of $100 billion dollars a month. This puts the deficit at $1.2 trillion deficit a year. Peter notes that the borrowing is much higher than the last time when previous president Obama borrowed during the 2008 financial crisis to revive the economy. In short, he means that president Trump is spending a lot more money than Obama did even during the worst economic situations. Also, he revealed some more shocking news that the US government will be spending $5 trillion in the next fiscal year. The trade deficit is also at an all-time high due to the rising oil prices, which will add more pressure on the US economy.
He said that oil prices rising at the same time when the US dollar is rising will increase the trade deficit for the US and is not at all good for the economy. He further added that the rising oil prices, record trade deficit, budget deficit and increasing interest rates all put together took a toll on the bond market. The yield on the 10-year bond market spiked to a new high and almost reached 3.1%. The stock market should resume its downfall from now since the bond market is at an all-time high.
So because of all the above reasons, Peter thinks that interest rates are going to rise much higher than anybody can ever imagine. He predicts that the interest rates are going to keep rising due to the record deficit and the inflation that has been building up over the years. This rising interest rate will have a depressing impact on the economy due to the debt-based economic model followed in the US. Anything that is a function of credit like housing or the auto market will be majorly impacted, he added. Below is his video
How US Economic Collapse will Help Bitcoin Adoption
It is not only Peter Schiff and Jim Rogers who are predicting the collapse of the dollar and US economy, but many experts point to the economic slowdown and fall of the dollar. Already Iran, Russia, and China are planning to move away from transacting in US dollar due to sanctions. The US economic collapse and the dollar’s fall could fuel the price rise of Bitcoin and other cryptocurrencies.
This is because of the fact that in the last recession people were struck by economic difficulties such as job losses due to the US government’s bad monetary policy. But this time there could be an alternative such as buying Bitcoin, which is not yet fully dependent on the performance of any traditional asset or store of value. So buying Bitcoin and other cryptocurrencies is a wise decision now to potentially circumvent any losses due to a (possible) economic collapse. Bitcoin will also rally during the next collapse due to the fact that people will start moving their US dollar to what might be considered a safe haven at that time, like Bitcoin and gold.