By Chris Black
After having a very bad day yesterday, the market, the US dollar, crypto et al are back with a vengeance. Buy the dip, you know the drill. It’s time to pump it again, to the moon. So the entire market,with thousands of components worth trillions of dollars trades in unison.
We’re living in clown world folks, and nothing is real.
Does anyone honestly think humans are trading $110 billion in bitcoin per day?
Crypto has been taken over by the big bank algorithms. The market goes where the algos say it goes. That means you can be up 30% one day and down 50% the next for no reason at all.
You are playing online slot machines. As in, you can invest in the market, cryptos, commodities, etc. However, you aren’t investing in anything real and are just along for the ride, at the whim of a computer simulation.
Getting back to “fundamentals”, all year you couldn’t get foam for products because nearly all vinyl went to making PPE, 90% of that was just wasted on things that were never going to be used. If you want bottles of hand sanitizer or disposable gloves, there are warehouses that will pay you to take them.
But if you need foam like vinyl nitrile or EVA for your product, you are out of luck. The backlog for production is hitting a two year wait.
Yet, it gets even worse. Enter the crypto frenzy.
Nvidia is now making consumer video cards with drivers that will not allow them to be used for crypto mining. That is because every single video card is snapped up by bots purchasing them for mining farms. People who actually want to use the video card for gaming or productive work can’t get one unless they are willing to pay 6x the retail price for one on EBay.
Since Nvidia doesn’t want to lose the quick cash they get from selling cards to crypto miners, they are making mining cards without video outputs. These cards are cheaper to make and sell for more.
The company thought they might get $20-30 million in orders. They got $160 million.
The volume of crypto cards is so large, that there will remain a shortage for the consumer market since the base chip is used for both.
Antminers and other crypto rigs are also contributing to the massive silicon shortage. The cards and rigs need power supplies, capacitors, memory chips, materials for the boards, etc. These rigs also all need to be replaced every few months, instead of the few years like normal work computers usually last. When an antminer or other ASIC system is out-dated, there is no other use for it.
The ripple effects of the crypto craze go way further than just the computer industry.
If I started a company that burns millions of cow hides every month, this would cause huge problems for any industry that uses leather. Prices for leather would also go through the roof. Let’s say that my business of burning cow hides is so profitable that I begin buying up wholesale steer by the millions and just throw the beef away. I don’t need the beef, just the hide.
What would that do to the food industry? People don’t care because Wall Street is throwing billions of dollars into my company every day, and my investors are getting rich.
Crypto is the greatest waste of resources on the planet, unless you are the creator of the SHIBA coin that is worth a few billion dollars for no reason other than it uses the same dog MEME as DOGE.
People claim the power usage of crypto isn’t a problem.
Energy is a finite resource. Anything that is using that energy is taking some of it away from someone else. This cause prices to rise, so that some people use less, and those that can afford to pay the higher price will use more.
The entire world is fucked right now. Nothing is working the way it should.
You can’t book freight unless you shell out a few extra thousand dollars. When you do get a container booked, the lead times are an extra 30-60 days. For small companies that actually need to make a profit to stay in business, there is no profit to be made.
The publicly traded behemoths don’t care about profit, only the optics. They are paying $8000 over the spot price for container shipments, effectively shutting out anyone smaller than them who can’t afford to do so.
The bankruptcies seen during the “pandemic” are nothing compared to what is going to come over the next few years.
The bulk of the business failures from the 99 Dotcom crash didn’t happen in 1999, they happened between 2003-2006, while Wall Street was doing the next happy dance.
Prepare for dark times ahead.