So, there is good news and bad news...
We've all heard that the next recession is around the corner, but with so many economic and political events around the world, it's not really clear what exactly might cause it and when, and how to protect yourself from it.
The upcoming "retirement event" of Baby Boomers cashing out their pension plans might well be a major contributing factor to the next recession.
That's the bad news.
We've had housing crises and banking crises before, and it looks like now we're due a retirement crisis. The clip below breaks this down in detail and makes a lot of sense to me.
If you don't have 48:51min to watch this, let me give you my notes (I've watched it twice :))
I had to watch this twice, because crypto is my "alternative pension plan". It's the whole reason I got interested in the first place, and it's why my clients and friends are investing in cryptocurrencies: protection from a recession and a plan B for retirement.
This video confirmed my intuition and decision. It talks about the fact that the baby boomer generation (average age 64 at the moment) is going into retirement now in very large numbers, and what impact that will have on the economy as well as our own retirement in the future.
While the statistics in this clip focus on the U.S., the general topic and future development can be applied to any other Western country.
- The fact that so many people will leave the workforce at once and cash out their retirement plans (=sell the stocks in them), will impact the stock market.
- The fact that so many people will watch their spending and consume a lot less from now on, will impact the economy.
While market up's and down's are normal, this time it's different because there's such a large number of people retiring all at once - over a few short years - and the younger generations won't be able to balance things out, so the recovery will take a lot longer.
One of suggested solutions (besides starting your own business): invest in cryptocurrencies.
This doesn't only go for the baby boomers of course. The younger generations need to find alternative investment opportunities, too, because the freelance gig economy, which is spreading, comes without company sponsored retirement plans of course.
And the very same technologies that are a good investment right now (Blockchain, AI, etc.) will not only take over the world, but also take their jobs away. So they will also have a harder and harder time planning for retirement in traditional ways.
Besides gold and silver, cryptocurrencies are the necessary alternative, with the highest potential.
Because decentralized crypto assets like Bitcoin exist outside the system that will fall into a recession, meaning many people will use them as a "store of value" to bring their money to safety. When the demand for a certain asset increases, the price of that asset increases as well, as it becomes more valuable.
So the value of cryptocurrencies might go up, while everything else is going down.
Yes, they are considered a risky investment, but we're at a point where we don't really have a choice but to include high risk assets in the mix, if we want a higher chance for financial wellbeing in the future.
Plus, this is not an unfounded prediction, as we have seen the same behavior in crisis ridden countries and regions - most prominently in Venezuela. Even things like Brexit have an impact on Bitcoin prices, as people tend buy into Bitcoin when they lose trust in their government or local currency.
To finish on a positive note for crypto investors: indirectly, the baby boomers might cause a crypto boom!
That's the good news.
While we never had such a large part of the population cash out their pension plans, we also never had an alternative before.
Never before did we have a way to protect ourselves from a financial crisis - not even as recently as 2008. Because Bitcoin was only invented in 2008 as a response to that latest crisis.
The more people will realize that, the more people will buy Bitcoin and other crypto assets as Plan B. This is why we will very probably see a "crypto boom" happening in parralel to the recession.
So there's no need to be scared. But there's a need to get prepared.
Protect yourself. The sooner you do it, the more you will benefit in the long run.
Just like with a pension plan :)
Anja Schuetz helps absolute beginners to become confident crypto investors. She also consults as a Customer Communication & Operations Manager for blockchain start-ups.