DXY, Tapering & Fiat Money

Since 2008, the recovery of global economy has been shown as great enough to forget the crisis. However, the immediate actions taken on these days have affected the whole global ecosystem deeply. When it comes to today's conditions, the fiat currencies are non-stop losing ther purchasing power with no sign of recovery.

While the fiat money is associate with the total production of a country and the number of the people etc, they have never been measured properly since the departure from gold standard back in 70's. At that point, we are the ones who are dealing with the dust hidden under the carpet. The burden of the years pushes for a paradigm shift.

D X Y is coming.

Obviously, USD is still the reserve money that is accepted all around the world. While measuring the performance of any other fiat money, it is supposed to be compared to the performance of DXY to be able to assess the positive growth that realized.

For the developing countries, the winter is going to be harsh; maybe the worst.
The FUD waves of new Covid Variant, Tapering and the escape from stock market may turn the scale upside down.

While there are 3 major narratives to convert any fiat into $USD, the climate change and its observable affect will also push the prices of commodities test higher levels. For most of the fiat currencies, the winter has just begun.

Tapering - Effects on Stock & Crypto

I associate tapering to coin burn in crypto in terms of its application and short term effects. Now that the supply will be re-adjusted and the rationale behind this action is to bring the circulating USD to get its value back, there is no way that the other fiat currencies can outperform USD in any timeframe.

What to do?
I choose to convert the fiat currency into digital dollar (USDT, USDC, BUSD, HBD & USDN) and put them into stablecoin liquidity pools until I feel satisfied with the point DXY index reaches. For now, the upside move is still in accumulation mode.

While DXY is going upside, stocks will be the first assets that will be affected deeply. Besides the immediate affect, I expect to see a long downside movement until the bubble bursts. Meanwhile, I assume that crypto will also lose its capitulation before the new so called mega bull-run* comes out. When crypto is compared to stocks, the downside movement in crypto will be felt like a correction (healthy one).

A Life without Fiat Money?

It is not an option for the majority of the crypto enthusiasts even if they die for it. The mass adoption is taking huge steps thanks to #GameFi, #NFTs, Smart Contracts and De-Fi but it is still not achieved.

If you have to rely on crypto for living, it's better to minimize the total amount in fiat. IF possible, allocate the majority of the portion to USD but for the part that is for expenditures. In this process, rely on De-Fi as long as there is no limitation from the govts.

Extra Uncertainty from Governments
Am I the only one who thinks that politicians lost their minds? I can hardly rely on any of my crypto investment to be reached by me without the restriction/inspection of the governors. To be frank, I always have a doubt against the silence of the governments while money is flowing into crypto. If you share a similar doubt, would it be better to realize some money and hold it in fiat (USD)?

At least, precious metals are there to protect the purchasing power against the inflation rate of fiat currencies. Even if the bullish case for DXY comes true, the precious metals will be major assets that will recover asap. Thus, Gold, Silver, Platinum can be under the radar.

TL;DR

If you rely on fiat money in your bank account, you may assume that you are holding an ice cube in a summer day...

The Risks: 📈 Upside movement from DXY indext
🤏 Tapering
🌡 Climate Change
🦠 New Covid variant + Politicians as bonus.

Less Risky Solution: Minimize fiat hodling (turn into USD if possible)
Diversified USD stablecoin Pools + HBD interest
Precious metals.

Hive on!

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