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How prepared are you for a financial crisis in 2022?

Mike Novogratz is a Wall Street veteran and Bitcoin bull

“The economy is going to collapse,” Novogratz told MarketWatch on Wednesday, adding, “We are going to go into a really fast recession, and you can see that in lots of ways.”
Just before the Fed raised rates by 0.75 percentage points—the biggest rate hike since 1994—Novogratz, chief executive of crypto merchant bank Galaxy Digital, gave the interview. After the U.S. consumer price increase unexpectedly surged to 8.6% in May, the rate hike came five days later.
An economic slowdown seems all but inevitable, and a major mortgage guarantor says it might come sooner than expected. 
Novogratz cited signs of a recession in the cooling housing market and rising inventories following a two-year hot streak. 
GDP growth has already declined from 12.2% in the second quarter of 2021 to 3.5% in the first quarter of this year, proving this is already true. Although GDP growth is commonly cited by the Commerce Department as the annualized percentage change over one quarter, those numbers tend to fluctuate much more than the year-over-year figures. Nevertheless, both data points indicate that economic growth will slow down between 2021 and 2022.
Despite Russia’s war on Ukraine, the Fed appears largely powerless to stop runaway inflation. Moreover, soaring prices for food and fuel are contributing to the inflationary trend
 
Crypto Crash –
The analyst did not indicate when a recession would occur, but he drew parallels between the 1998 collapse of the Long-Term Capital Management fund and the current bloodbath in the crypto market.
After being exposed to the 1997 Asian financial crisis and the 1998 Russian financial crisis, Long Term Capital Management lost $4.6 billion in less than four months. Global markets were shaken by the fall of the investing giant, which led to a bailout of $3.6 billion.

A decline of about 30% for Bitcoin on Wednesday marked the ninth straight day of losses for the crypto king, which has fallen more than 30% this month. After Powell’s announcement, it rallied to $22,900, but it has since fallen back to $21,015.
 
Are you prepared for the next financial crisis?

Karen Mika

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