I'm not sure if this administration is intentionally trying to get more folks to examine cryptocurrency, but spying on folk's checking accounts is likely to get some people looking beyond traditional banks.
Heck, maybe it will bring back the barter system or more people will use cash. I could even see it being a positive for gold and silver. One thing is for sure, when regulation goes too far, people will seek alternatives. While I don't think the measure of monitoring cash above $600 passing through bank accounts will see the light of day in the immediate future, that the possibility is even being floated is insane.
Not helping matters are these moves in commodities. Why? Well, the higher prices are showing more staying power than a transitory status. Oil continues to press to new highs. The good news is we aren't in driving season, but we are approaching the fall and winter holiday travel season. There's still a good six weeks before we hit that mark; however, we need to keep an eye on oil and natural gas. Airlines have already been crushed under the weight of COVID. Add in surging fuel costs and things could get bleak in quick fashion. Oil and natural gas at highs won't help consumers either as the cost to heat one's residence is going to eat into disposable income. The best part is we're combining this with an admission likely to hike taxes.
And we haven't even mentioned the backlogs in shipping and the higher costs in that sector weighing on retailers bringing in goods from overseas via cargo ship. It's not the debt or need for an adjustment in the debt ceiling that is weighing on equities in my view. It's the above factors. No traders care about the debt ceiling. I doubt any investors care either, but we do care about price action, gross margins, supply chains, and disposable income. Unfortunately, the negative impact on those for many consumers and businesses is growing. It's not on every person or every business, but nothing ever is.
Speaking of negative currents, I noticed some of the micro-cap and small-cap Financial Twitter Self-Appointed Gurus -- a.k.a. FURUs -- have taken it on the chin the past few days, especially Tuesday. Eventually, reality will catch up for every stock. That can be both a positive for undervalued companies and a big negative for those trading on pure hype. The latter have been the dominant force for the past 18 months. A time will come when the vast majority of traders see through the fluff and walk away. If the market continues to remain on edge, it's going to happen quite soon. Tread carefully if you are playing in that space.
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