Financial PlanningInvestment

Turmoil in cyber currency and beyond

Bitcoin has lost 80% of its value since I wrote this pessimistic prediction “Turned Sour on Bitcoin” a year ago. Last week the cyber currency market dropped $700 Billion.

Of course this does not happen in a bubble. The overall stock market appears to have peaked and may be entering an extended bear market. Real estate markets have suddenly cooled off. Money managers are now looking for value in overseas investments. A few investors, like me, hope to increase investment in high impact undervalued US infrastructure investments. Diversification in less glamorous but essential core industries like agriculture could offer stability.

What impact do these changes have on the overall economy and our near term micro-economic future? We have nothing to compare to this cyber currency issue. The tax planning issues we discussed earlier in the year for cyber currency holders appear to be mute now. We don’t know what effect gyrations in an alternate currency my cause in the primary currency markets. We can imagine a psychological effect, but how will that play out for us? On top of all this, the coming year will likely usher in the most divisive and dysfunctional government system of our lifetime. The impact of the dysfunctional tax system, healthcare threats and general governmental divisions are not good for the pocketbook of the ordinary citizen.

I expect this will be a challenging year ahead so it won’t be a surprise if the market is down, recession is looming and political infighting is at an all time worst case scenario. The only question in my mind is will it be an economic crisis year? The one thing all economic crisis events have in common is that most of us don’t see it coming.

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