Quote from: leetlezee on October 24, 2018, 08:22:27 PM

Quote from: The Pharmacist on October 24, 2018, 05:41:21 PM

Quote from: theymos on October 24, 2018, 05:29:27 PM

a long-lasting global recession doesn't seem far off.

Really? We just got done recovering from the 2008-09 disaster, which to me doesn't seem that long ago. I'll admit that I don't exactly have my finger on the pulse of the global economy, but what signs are pointing to another recession? The stock market has been due for a correction, and a lot of stocks have dropped quite a bit lately, but that's ultimately healthy for the market. Stocks have been booming ever since 2009 and there hasn't been much in the way of a crash or correction.

The question of what happens with bitcoin if a "great recession" happens is an interesting one, since it hasn't been tested yet. I have a feeling that if a global meltdown occurs and mass unemployment is a component of that, people are going to sell bitcoin en masse and the price will probably fall significantly--and all of the altcoins that people are now hoping to get rich on today? They're going to fare even worse.

I don't see bitcoin as a safe-haven asset like gold or silver. It's way too volatile for investors looking to preserve the value of their money when markets go haywire, and if we do get an economic disaster a-knockin' at our door my bet is that metals will start rising again.

I would probably mostly agree with Pharmacist here. I did do a little bit of research to try to determine the narrative that is calling for a global recession. My references are at the bottom, but the narrative ranges from fears of any global tightening (aka rising interest rates) putting too much pressure on the global 247 trillion dollar debt burden, which includes massive consumer debt (1).

CNBC warns of global growth slowing combined with trade tensions putting a strain on the global economy, citing in particular the latest trade deals and negotiations by the US. (2)

Washington Post addresses the lack of real change in the banking space after the last mortgage meltdown in the US, combined with increasing deregulation, increasing risk of large-scale cyber attacks, and a lack of good crisis-management systems. (3)

Highly cited Economist article warns that although the US had a good year in 2017 and so far a good year in 2018, which has had a ripple effect across the global economy, if growth slows as the US implements tightening (increase in interest rates), that could start a global downturn, especially in combination with the trade deals Trump has completed and is currently negotiating. (4)

So in essence, the narrative is that the "good times can't last", and I believe it is coupled with (or perhaps based on) fear about what Trump will do next (5), especially if the midterms go to the Republicans and he has the next two years with a favorable Congress and a conservative Supreme Court. Whatever you believe about the US, whether you like it or not, at the moment, the US does have a big impact on the global economy, so really, your belief about if a global recession is coming has quite a bit to do with whether you think the US (or Trump, if you rather) is moving in a direction that will help or hurt the economy.

To wind up, I couldn't really tell you which way I think the Bitcoin market would go if we experienced a global recession. I think this new generation probably doesn't place as much stock in gold and silver as previous generations, and perhaps may feel like crypto is their "recession savior" (as sort of a anti-establishment move). On the other hand, I could also see people saying, "so THIS is why grandpa always told me to buy gold and silver".

So I voted "largely unaffected" as my statement of indecision. Wink

(1) https://www.express.co.uk/news/world/1021696/global-recession-financial-crash-economic-crisis-great-depression
(2) https://www.cnbc.com/2018/07/02/global-recession-risk-has-significantly-increased-strategist-warns.html
(3) https://www.washingtonpost.com/news/theworldpost/wp/218/10/09/recession/?noredirect=on&utm_term=.133bbcb5cd79
(4) https://www.economist.com/leaders/2018/10/11/the-next-recession (alternative summary for those without access to the economist): https://www.marketplace.org/2018/10/19/world/economist-warns-coming-recession-its-world-economy-report
(5) https://www.afr.com/markets/markets-could-trigger-the-next-global-recession-pimco-20181016-h16owx

I agree with the largely unaffected. Bitcoin moves by the beat of its own drum. I think the type of people that would sell Bitcoin in the middle of an exponential bull run to buy in when the stock market crashes are the type of people that won't have bitcoin in the first place. Also since most bitcoin owners are young, i think they'd be much more willing to change their circumstances if they get hit by losing their job in a recession as compared to someone older who has a family and a house and stuff and can't make changes so easily, than sell what they are probably expecting will be a huge windfall for them in the years to come.

There is a reason why people are saying the good times can't last. In the US we were expanding at a moderate pace and steadily until 2016, with deficits falling for the most part drastically from the high enormous deficits of the great recession. Under Trump we have an overheated economy and stock market built up on tax cuts, deregulation, and massive expansion of the money we're borrowing the past two years. The good times can't last because is based on a house of cards and nearly a trillion dollars of borrowed money annually, while allowing banks and corporations free reign to in light of the deregulation. Before 2017 the US had a good strategy of moderate and steady continuous growth with regulations in place to keep things from going crazy, then Trump and Republicans came to pull out all the stops to get the short term gains and sacrifice the viability of the economy. Down we will go. They key right now is if you have stocks, sells them and buy bitcoin at the bottom right now. In a couple years when Bitcoin peaks again sell Bitcoin and buy back the stock market for a year while Bitcoin crashes and stocks are heading back up following the stock crash. Then when bitcoin hits the next bottom sell stocks again and buy back for the next bitcoin run.