So this year is proving to be rather interesting. We are witnessing the end of the petro dollar and quite possibly the beginnings of a hyperinflation event. Additionally, we are starting to see food shortages in the US, particularly in meat products. This is reflected in reduced availability, increased prices, and buying restrictions that have popped up long after the "COVID-19" measures were implemented back in March. It's also worth mentioning that consumer staples are generally the LAST products to be affected by inflation, which means you're less likely to notice any discrepancies during your weekly grocery store visits. Don't get caught with your pants down, and don't assume this bubbling of the stock market represents any kind of value-add to the economy. Shares are likely increasing only due to the rapidly eroding buying power of fiat.
Because of this, I no longer think it's wise to track Monero prices in USD or other fiat currencies. Moving forward I'm only concerned with its value measured in precious metals or maybe soft commodities like coffee or cotton. We've sat around for the last two years waiting for some action in the crypto space but this year we're in for a hell of a lot more than we bargained for.
My short-to-medium-term prediction is that stocks and precious metals will continue to rise due to the eroding USD and shaky market confidence, respectively. Many investors will continue to remain in cash, but as businesses begin to reopen it will become painfully clear how much the purchasing power of their fed notes has deteriorated. Further, surviving businesses will likely be in considerable debt with lost time to make up for, and will pass on the costs of these obligations to their customers. This will lead to a transition of capital into the precious metals market, with silver seeing the bulk of that movement, perhaps even returning to its historical 1/15th price ratio to that of gold. Savvy investors looking for other opportunities to side-step the inflation will see crypto currencies as the natural "location-independent" alternative to precious metals.
Monero is currently traded at roughly 4X the spot price of silver. I see that ratio doubling to 8X by end of year or sooner. That would put us at around $480 if we see silver hit $60 in the coming months, but again I expect fiat prices to become increasingly meaningless.
And here we go. As I said previously, don't be distracted by crypto prices measured in USD. Fiat is meaningless at this point. For example, take a look at the current silver chart:
Do you think everything is really going "up" or is something else happening? BTC is "rising" in lockstep with precious metals... XMR is lagging a bit behind, but we know how that story goes by now. So far we haven't seen drastic price increases for general goods, but I don't imagine things will stay that way for long. In the end, I'll continue to measure XMR's value in terms of the things I'd wish to exchange it for.
One more thing. There is currently a coin "shortage" in the US which is conveniently pushing businesses away from accepting cash. This sudden disappearance of cash leads me to believe we are headed towards a bail-in or some similar form of wealth trap that would otherwise result in a bank run. Our emergency exits are quietly being eliminated, and I would be very concerned about any funds resting in a checking/savings/brokerage account.
