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How would a recession in 2021 affect xrp and Ripples strategy?

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30 minutes ago, Lamberth said:

I don’t think we should focus on the US debt or wait for the next full-scale recession to find this out. The FED is playing wait-and-see game and pushing back on Trump’s attempts to introduce Quantitative Easing for a simple reason - the ECB is in even bigger trouble and they need to find a new approach to kick-start the economy. According to Olli Rehn, the ECB "will announce a package of stimulus measures at its next policy meeting in September that should overshoot investors' expectations”. Overshoot or not, there are two interesting questions to answer:

1. Where will all those billions of euro per month from corporate purchases be re-distributed? (By no means I suggest it’ll all be in crypto)

2. What other options the ECB has if/when QE does not work this time? Bear in mind that current negative rates already brought the financial system of Europe to the brink of collapse. 

My guess - there will be an attempt to introduce a new asset class by European authorities in 2020, it’ll be connected to CBDC/DA/crypto and comes hand-in-hand with a new crypto regulation. If they are fast enough in this endeavor - we might see a huge inflow of new money. And by huge I mean HUGE. Otherwise crypto market will stay what it is (for a period of time) - manipulated pump and dump casino.

This is just pure fantasy. Sure that's where the government money is gonna to a highly unregulated asset so that whales and bagholders can benefit hahaha

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6 minutes ago, Cooliozxrp said:

This is just pure fantasy. Sure that's where the government money is gonna to a highly unregulated asset so that whales and bagholders can benefit hahaha

Where did I say that the government money will go into an unregulated asset?!

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I believe the likelihood of a recession happening in 2021 or sooner  is greater than it not happening. Most economist do though they don’t always have the best track record when making predictions. World Governments are beginning to launch countermeasures and equity markets are becoming volatile thanks in part to the trade wars. 

A lot of it still depends on regulation. While smaller retail investors might lose demand for crypto to keep money handy, institutional investment and fund managers will be seeking ways to reallocate their portfolios and if a definitive set of rules to follow with crypto investing were there, i can see them allocating a couple percent as a hedge. This would place major upwards price pressure movement .

 

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Debt is the killer here. There is a possibility that, as a fundamental driver for the next recession (and it must be assumed to be coming sooner rather than later), global debt may be addressed by freeing up capital locked in unproductive fx accounts. Globally that could be—cue Dr Evil—more than 1 million dollars put into circulation. I wonder whether there could be a solution for that to be developed within 2 years? Oh, wait, there is something.

If  necessity is the mother of invention, how are we related to ‘rapid uptake of something that already exists’?

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The economy is cyclic. 

Every recession that has started since the 1950s (specifically in the US... not sure about others) has been preceded by a decrease in residential sales. This makes sense since people are a lot less prone to investing their money into an uneasy economic structure. 

The cycle indicated that the next recession should have begun early this year, but some key policy changes have pushed past this. 
This will likely push us into an area of hyperinflation, which will ultimately lead to a larger correction (% based). 

There are many countries around the world that are in this same situation, and are already preparing for crisis recovery in the hopes that it's not as bad as the last recession.

I (much like everyone else) don't have a clue what the crypto market is going to respond with, but I'm very hopeful that I made the correct choice.

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12 hours ago, iLeeT said:

I think the narrative that BTC is digital gold and a safe haven might be pushing it a bit, e.g. when the yield curve got inverted all markets tanked, especially BTC, so at the moment it doesn't seem to act completely like gold.

I don't think the inverted yield curve is why BTC dropped 10% of its value. Rather, it was likely stolen BTC was being dumped in order to launder it into cash. Overall BTC has been reacting opposite the stock market. Esoteric Trading Solutions produced a video that goes into detail regarding this very question: 

 

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2 hours ago, mDuo13 said:

 (...) the company should tune out the noise and get to work (...)

Are we noise?

Early adopters enthusiasts and evangelists (like me since 2013) have been very disappointed with the distribution and market maker program the past year (price of XRP is the result)...and many messages have been sent regarding this issue without any feedback from Ripple.

If ever we're going into recession banks institutions etc. won't be more incline to "buy" at market price and if Ripple wants to continue the past years path of XRP distribution I'm afraid it'll be at a very discounted price.

I understand you're in a sensible position to answer but my question is only: do they know/feel/understand what we're saying or are we noise?

I don't want to spook you since you're almost the only Ripple employee posting anymore...so if you ignore the question it's ok! Cheers :hi:

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What suggests that "we" are noise, when there's so much junk written in this new space as a whole, on virtually every little aspect of everything having anything to do with crypto; especially the price?  I absolutely LOVE what he's saying, as it tells me that they're laser focused on their objectives and not on how people perceive their progress. Case in point: "The market price of XRP, of stocks, whatever else, will fluctuate due to expectations and hype and whatnot. Underneath that, we'd like to improve the fundamentals for the company, the XRP Ledger, and the world as a whole so that money can move faster, benefit more people, enable more types of work that people want to do..."  

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@WuWei Ripple will do well...and probably change the world...but we supported them for 6+years now and since there was no way to buy Ripple stocks we bought XRPs...and Ripple took quite many profit for that fact...beside some private investment most of the cash came from selling XRPs to "us"...so yes I feel I can say something even though I'm not a "shareholder" I've been an evangelist/supporter/investor long enough.

By ignoring "us"...my question remains: are we noise?

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I've got no problem in saying that yes, for the most part, we are just noise and should only be considered as such. I want Ripple to focus on their vision, and to not be at all distracted by what Joe Schmoe little me is feeling over here in some forum, having believed in them enough to lay down some decent cash.  Nobody at Ripple needs to expend any unnecessary energy on appeasing my a**,  as I want them to focus every bit of it on bringing this all to fruition. In the end, this will erase most of the complaints that XRP holders can come up with.

  

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Bad accounting and cooking books might be the downfall of many of those "too big to fail" players. I hope Harry Markopolos is wrong about General Electric cooking their books and that they are fine but if he is right, then we are about to see a downfall that would eclipse Enron. 280,000 employees are about to go down with it and pensions included. 

Personally for Ripple, they wouldn't be affected. In fact, I believe a recession would be the perfect time for Ripple to flourish. Banks could potentially save billions getting rid of most of their I.T. budget and jumping to Cloud and DLT based solutions. The lower error rates in settlements also improved KYC/AML checks will save them money by automating the processes instead of having entire departments dedicated to those tasks. 

PS: For the General Electric fiasco, I'm referring to this:

 

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Posted (edited)
1 hour ago, GrayFox said:

Bad accounting and cooking books might be the downfall of many of those "too big to fail" players. I hope Harry Markopolos is wrong about General Electric cooking their books and that they are fine but if he is right, then we are about to see a downfall that would eclipse Enron. 280,000 employees are about to go down with it and pensions included. 

Personally for Ripple, they wouldn't be affected. In fact, I believe a recession would be the perfect time for Ripple to flourish. Banks could potentially save billions getting rid of most of their I.T. budget and jumping to Cloud and DLT based solutions. The lower error rates in settlements also improved KYC/AML checks will save them money by automating the processes instead of having entire departments dedicated to those tasks. 

PS: For the General Electric fiasco, I'm referring to this:

 

I agree that banks will want to cut costs drastically during a recession and that a negative economic outlook might cause them to take steps that were forever procrastinated before. However, Ripple is not operating in a vacuum, of course. Swift is handling far greater volumes per day and is looking to innovate and enhance its services, too. In contrast to Ripple, they are already cooperating with a large number of banks on a routine basis and not just in the context of some loose partnership, test-run or similar arrangenement. I have no idea about the schedule for Libra, but I would feel rather confident that if and when regulatory hurdles are overcome, Facebook will do a thorough job and won't waste much time.

Competition for Ripple is fierce, and for all inents and purposes they have failed to achieve a breakthrough during one of the longest bull-markets in the post-war period. If they did not get things up an running during such benign circumcstances, what are the chances that they will succeed, and that banks will discover and really opt to use their revolutionary products, when the going gets tough, I am wondering. If Ripple's products are so advanced and practical for banks, why haven't they been adopted by a much greater number of actors in the financial sector by now? What pieces are missing in this puzzle and continue to prevent Ripple and its products from really taking off - now, not in some nebulous future-  some seven years after XRP was created (back in 2012)? I don't know the answer to these questions, but the price chart seems to be indicating that I am not the only one who has concerns about what the future holds for Ripple and their project.

Thus, in a nutshell, while I am not saying Ripple can't succeed, I believe it is dangerous for XRP holders/buyers  to assume that a recession automatically implies that Ripple's fortunes will improve.

(1. Sorry for any typos. 2. English is not my mother tongue.)

 

Edited by Bystander

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50 minutes ago, Bystander said:

I agree that banks will want to cut costs drastically during a recession and that a negative economic outlook might cause them to take steps that were forever procrastinated before. However, Ripple is not operating in a vacuum, of course. Swift is handling far greater volumes per day and is looking to innovate and enhance its services, too. In contrast to Ripple, they are already cooperating with a large number of banks on a routine basis and not just in the context of some loose partnership, test-run or similar arrangenement. I have no idea about the schedule for Libra, but I would feel rather confident that if and when regulatory hurdles are overcome, Facebook will do a thorough job and won't waste much time.

Competition for Ripple is fierce, and for all inents and purposes they have failed to achieve a breakthrough during one of the longest bull-markets in the post-war period. If they did not get things up an running during such benign circumcstances, what are the chances that they will succeed, and that banks will discover and really opt to use their revolutionary products, when the going gets tough, I am wondering. If Ripple's products are so advanced and practical for banks, why haven't they been adopted by a much greater number of actors in the financial sector by now? What pieces are missing in this puzzle and continue to prevent Ripple and its products from really taking off - now, not in some nebulous future-  some seven years after XRP was created (back in 2012)? I don't know the answer to these questions, but the price chart seems to be indicating that I am not the only one who has concerns about what the future holds for Ripple and their project.

Thus, in a nutshell, while I am not saying Ripple can't succeed, I believe it is dangerous for XRP holders/buyers  to assume that a recession automatically implies that Ripple's fortunes will improve.

(1. Sorry for any typos. 2. English is not my mother tongue.)

 

It is difficult to answer some of these questions. If Ripple is bound by Non disclosures then we will never know the true extent of its adoption. Ripple is privately run and not publicly traded so they do not need to reveal anything to us and certainly NDAs don't help this matter at all. 

SWIFT is for the banks, by the banks and of the banks. Central Bank money used to be exclusive to just banks. This is changing to create an even playing field. Take the Bank of England for example opening its doors to non-banks which is an incredible moment where you no longer need to go through HSBC, Barclays and their ilks to get to BoE. 

The price chart for XRP should not be an indicator to Ripple's success and adoption. After all, blockchain and DLT pose some fundamental questions, are they technologically advance enough to force us to rethink our entire monetary system and financial markets or do these systems simply provide enough advancement that they only need to plug and play with the current system. Do they complement or do we need to rebuild? 

I'm in XRP because I believe Interledger Protocol will affect the XRP price in the future and that future could be 10 to 20 years down the line and I'm happy to stay. If DLT is asking us to rebuild or rethink our financial system for the internet age, then it's not something that will take under 5 years. 

I believe there are other factors that may affect the future growth of the crypto market. Take for example, Africa's advancement in Mobile money and their free trade agreement. They demand interoperability for this to succeed. This may take years to build and incorporate the whole continent into a single market.

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On 8/16/2019 at 8:59 AM, NightJanitor said:

I guess that I find it to be an incredibly huge question with an inordinate amount of supposition and therefore find it to be one of those questions that certain types of teachers say do not exist:  the mythical "stupid question."   (This could just be because I have some sense of the scale and scope of the three tiny areas for which you want a forecast...)

Frankly, also, it annoyed me that when I didn't go along with your "a recession is imminent" bit, you changed the question by proclaiming that "predicting a recession is a fool's game" --- but, hey, let's predict what the entire market, banking sector, and then Ripple would do, you know, in the event of one.

Idjit.

Wow, you're a ****.

The guy asked if a recession would negatively affect XRP, using the most reliable indicator of past recessions.

I think if you're a "it's different this time" or 1928 Irving Fisher kind of guy, hey, more power too you, we need people like you to offload our portfolios. But we'd all be better off if you just didn't post a reply, honestly. 

Anyway--the yield curve inversion is caused by the Central Bank pushing up short term interest rates, as there is no natural tendency for the short term rate to rise for a sovereign borrower like the US, instead the opposite is true: rates fall as the supply of credit expands. Higher short term rates puts pressure on borrowers with short term liabilities, and the number of short term borrowers with speculative or ponzi investments increases as credit increases from bank lending. As short term rates rise, the profitability of bank lending is reduced, which reduces the number of loans that are issued, which reduces the money supply. Less money means it's harder for short term borrowers to borrow--there is less credit money available, and the rates they have to pay are higher. The result, eventually, is an increase in defaults, which reverses the cycle and sets off deflation. 

Concurrently, the US has created a rather laughable problem stemming from their use of tax breaks. By reducing taxes and increasing the deficit, the US is about to convert nearly all the excess reserves in the USD system to bonds. This may lead to a liquidity problem, which would cause the Fed to restart QE as soon as (or if) the problem is detected. More QE means the banks will simply convert bonds back to reserves, and the asset price bubble will continue. Again, whether or not asset prices fall significantly depends entirely upon how long the Fed permits short terms to be high, how long they permit the curve to be inverted, and how quickly they restart QE.    

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