Mike Novogratz says the economy is going to collapse

[Hydrogen]

While many economists agree a recession is likely coming in 2023, Wall Street veteran and Bitcoin bull Mike Novogratz has just given one of the most dire outlooks yet.

“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.”

Novogratz, chief executive of crypto merchant bank Galaxy Digital, gave the interview just before the Federal Reserve raised rates by 0.75 percentage points—the largest rate hike seen since 1994. The rate hike came five days after U.S. consumer price increase unexpectedly surged in May to a 40-year high of 8.6%.

Novogratz pointed to the housing market, which is finally cooling down after a two-year hot streak, and inventories piling up as signs of a recession looming on the horizon.

“There are layoffs in multiple industries, and the Fed is stuck,” he said, adding that the central bank is in a position where it has to “hike [interest rates] until inflation rolls over.”

Novogratz accurately predicted in the interview that the central bank would lift rates by 75 points and that the market would rally on the news. After Fed chair Jerome Powell announced the rate hike, the Dow Jones Industrial Average rose by 1%, while the S&P 500 advanced 1.5% and the Nasdaq rose 2.5%.

Novogratz also predicted there would be a stock selloff in the next coming days, which happened right on cue. At 8 a.m. ET, S&P 500 futures were trading 2.2% lower, wiping out yesterday's gains and plunging the benchmark further into a bear market.

“They are hiking into the popping of a bubble,” Novogratz said.

Recession looms

The U.S will officially be in a recession when the National Bureau of Economic Research (NBER) finds a significant decline in economic activity that lasts over an extended period of time—usually two fiscal quarters.

According to a new survey of 49 U.S. macroeconomics experts conducted at the start of June by the Financial Times and the University of Chicago’s policy research center Initiative on Global Markets, this is likely to happen in 2023.

Nearly 70% of the economists surveyed believe the NBER will make the call at some point in 2023, with 38% predicting a recession will start in the first two quarters of 2023, and another 30% forecasting an official start in the second half.

The Fed appears largely powerless to stop runaway inflation, which is being driven up further by the soaring prices of food and fuel brought on by Russia's war on Ukraine.

In his announcement of Wednesday's rate hike, Powell signaled another large rate hike coming at the July FOMC meeting—in the 50- or even 75-basis-point range—with the Fed expecting weaker economic growth and higher unemployment.

Crypto crash

Novogratz didn’t give an indication of timing of when a recession will happen, but drew parallels to the 1998 collapse of Long-Term Capital Management fund and the current bloodbath that is happening in the crypto market.

Long Term Capital Management was a highly leveraged fund that lost $4.6 billion in less than four months from its exposure to the 1997 Asian financial crisis and the 1998 Russian financial crisis. The fall of the investing giant sent shock waves through global markets and led to a $3.6 billion bailout.

https://twitter.com/novogratz/status/1537036311613382656

On Wednesday, Bitcoin came very close to falling below $20,000. The crypto king has fallen more than 30% this month, and its decline on Wednesday marked the ninth straight day of losses. While it also rallied on the back of Powell’s announcement to $22,900, it has since fallen back to $21,015.




https://www.yahoo.com/video/wall-street-vet-bitcoin-bull-122037650.html

....


They've been saying this for so many years. Its hard to believe it is possible.

If a recession did occur in our lifetimes. What would be the best approach to rebound and recover from it. The typical approach for many, will be to do nothing and expect God or the government to save them. But what if God and the government aren't saving people this decade. They're taking this decade off to go on vacation. What do we do then.

Rampant consumerism has been encouraged for so many years. I think we would need a shift from consumption in consumerism to a greater emphasis on production and manufacturing. Providing credit and funding for these initiatives would be difficult under negative economic conditions. The shift from city living to off grid self sustainability could be advantageous and a model to pursue. Unfortunately is not affordable for all.

Jobs are the traditional means of earning wealth and security, perhaps a shift could occur towards entrepreneurial pursuits and freelance work.

If recession sets in, how can we best dig ourselves out from under it.

[1713525104]

1713525104

[Oluwa-btc]

Frankly, I found it irksome seeing Government. Like Fvck the Government  Government taxes you when you bank, when you shop and also when you die - Robert Kiyasoki. They should have prioritize teaching financial freedom if they really cared, this should have been taught not only at homes but at schools. Truthfully, not all grown up's knows how to make money work for them ands been a major disturbance in this turbulent times. Also, job's are traps, I hope alot of people get to realize that, people fear for not having money makes them jump into all of these jobs, they might build you wealths but I think they're traps and illusional.

In depressed time's like this, I think it's the best time to make investment, when others are simply scared to do. ( I'm no expert at this though ) We should try to look out for the bigger picture ( opportunities ) and not focus only on recession. Frightening for me to think about food scarcity coming .    Investors, Big Business owners and self employed will be greatly backed in these times.


I hope GOD does hears our plight, cause crazier things will happen.

[adaseb]

I agree with some of his points. Inflation at 8.6% is crazy high. So is record low unemployment rates along with high commodity prices. All this points to stagflation and a recession.

The rate hikes in the past did nothing, we still got a huge 1% CPI print from the month prior. Inflation should be 2-3 % for entire year not month.

Something needs to break and it will. Lay offs and hiring freezes are already starting. And consumer confidence is shot.

[stompix]

Novogratz didn’t give an indication of timing of when a recession will happen, but drew parallels

Seems like he has learned his lesson faster than Roubini and Zerohedge, if you call it in 2018, in 2020, and again in 2022 you might start to look like the broken clock that has maybe 30-100 years till it finally gets it right.

Novogratz pointed to the housing market, which is finally cooling down after a two-year hot streak, and inventories piling up as signs of a recession looming on the horizon.

Two years hot streak? But, but, in 2020 we were going to enter a recession  
https://decrypt.co/26340/michael-novogratz-this-is-bitcoins-moment

[Lucius]

Mike has moved on to the dark side and should not be relevant in any speculation, especially since everyone with a little brain understands that the big ones played the gods, and now the small ones, as always, will pay the price for it. His opinion is as important as the project that pulled the whole crypto market down, and he promoted it and maybe earned a few million in the process.

Now it's easy to talk about the collapse of the economy, and then say "well, I told you it would happen".


Source

[Husires]

Hyperinflation is not a problem, but rather how to manage the economy. The current inflation is not an economic problem. Therefore, its solutions will not be purely economic, and some problems will need political and executive interventions such as supply chains, Covid-19 crisis, the global energy crisis, the oil crisis, and the crisis of the Russian-Ukrainian war.

Therefore, economic solutions usually will not be the way out of this crisis, but rather start solving all these problems independently and interconnectedly, in order to reach a controlled inflation.

[hugeblack]

Personally, I no longer listen to the opinions of those who present themselves as "economic experts" or people with experience in economics and technical analysis for two reasons:

Either they are academics who deal rigidly with the economy as if it were mathematical equations, or they are biased where the institutions that employ them control any of their investments in their words, so do not build any analytical strategy based on what these “experts” say.

That guy's support for Luna is enough to make you ignore what he says in the future.

[coolcoinz]

Mike has moved on to the dark side and should not be relevant in any speculation, especially since everyone with a little brain understands that the big ones played the gods, and now the small ones, as always, will pay the price for it. His opinion is as important as the project that pulled the whole crypto market down, and he promoted it and maybe earned a few million in the process.

Now it's easy to talk about the collapse of the economy, and then say "well, I told you it would happen".


Source

I was looking for this in the comments after reading OP.

Mike is not someone who you'd want to listen to since in early 2018 he made a bitcoin price prediction of $50k by the end of that year and instead of going to 50, bitcoin went to $3k.

Novogratz didn’t give an indication of timing of when a recession will happen, but drew parallels

Seems like he has learned his lesson faster than Roubini and Zerohedge, if you call it in 2018, in 2020, and again in 2022 you might start to look like the broken clock that has maybe 30-100 years till it finally gets it right.

Novogratz pointed to the housing market, which is finally cooling down after a two-year hot streak, and inventories piling up as signs of a recession looming on the horizon.

Two years hot streak? But, but, in 2020 we were going to enter a recession 
https://decrypt.co/26340/michael-novogratz-this-is-bitcoins-moment

Don't forget about Burry. He came out of his closet this year to again warn us about the recession and an upcoming stock market crash.
The truth is, at some point it's going to happen and then they'll all say "we told you so".

[teosanru]

If you see it in a way all the economic indicators clearly indicates coming recession you can easily the amount of money that has been printed lately, you can easily see the rates of inflations around the world right now, you can see the war situation as well and how there has been a big bull run since past few years. Any fool can tell there is going to be a recession. But how are we going to keep ourselves safe from it is really an intriguing question, i think best way is to create multiple sources of income and also make sure you create such a position for yourself at the workplace that you become really irreplaceable. I think these are the only two things you can do on income front.

[Abiky]

They've been saying this for so many years. Its hard to believe it is possible.

If a recession did occur in our lifetimes. What would be the best approach to rebound and recover from it. The typical approach for many, will be to do nothing and expect God or the government to save them. But what if God and the government aren't saving people this decade. They're taking this decade off to go on vacation. What do we do then.

Rampant consumerism has been encouraged for so many years. I think we would need a shift from consumption in consumerism to a greater emphasis on production and manufacturing. Providing credit and funding for these initiatives would be difficult under negative economic conditions. The shift from city living to off grid self sustainability could be advantageous and a model to pursue. Unfortunately is not affordable for all.

Jobs are the traditional means of earning wealth and security, perhaps a shift could occur towards entrepreneurial pursuits and freelance work.

If recession sets in, how can we best dig ourselves out from under it.

The economy was long predicted to collapse due to ever-rising national debt from countries worldwide (especially the US). Now that COVID-19 and the Russia-Ukraine war took the world by storm, the economy has been deteriorating at a fast pace. Constant government spending and higher inflation rates will lead us to a recession very soon. Crypto was once thought to be a safe haven against Fiat (especially Bitcoin), but it proved us wrong as now all cryptocurrencies are in the "red zone". What will happen during the remainder of the year is a mystery to all of us.

Unless COVID-19 disappears and Russia stops the invasion, we won't be seeing any economic recovery anytime soon. Maybe a global reset will happen, paving the way for CBDCs to take over existing Fiat (paper money)? Just my thoughts

[blockman]

I think that we're having all of those opportunities and will use every resource that we have if that hits us too badly. Right now, it's hard to do everything in hand especially if you're doing this limitedly and the same as your funds. You can't diversify into other investments that might help you someday when the economy of most has collapsed already. Like us, we're thinking of ways how we can at least mitigate the effect to our lives. But I'm more worried about those people that seemed to be on a joyful day of their lives not thinking about what could happen if this comes by tomorrow.

[Darker45]

This is nothing new. I'm referring to Bitcoin or crypto bulls predicting an economic collapse or criticizing government financial, monetary, and economic steps. This has been going on all the time. In a way, they're already a broken record.

The issue here is that their analyses could hardly be construed as objective because they are naturally biased against fiat, central banks, governments to a certain extent, the current economic model, and so on. One set of economists think that there is a need to print more money, implement QE and stimulus and relief, raise debt ceiling, and then increase inflation rate beyond normal, lift interest rates, and so on. Another group, which probably includes Novogratz, is against every single one of them.

Rampant consumerism has been encouraged for so many years. I think we would need a shift from consumption in consumerism to a greater emphasis on production and manufacturing.

Unfortunately, production and manufacturing are largely driven by consumerism. They all belong to the same equation. You remove consumerism, a large part of production and manufacturing will crumble.

[Gyfts]

This is nothing new. I'm referring to Bitcoin or crypto bulls predicting an economic collapse or criticizing government financial, monetary, and economic steps. This has been going on all the time. In a way, they're already a broken record.

The issue here is that their analyses could hardly be construed as objective because they are naturally biased against fiat, central banks, governments to a certain extent, the current economic model, and so on. One set of economists think that there is a need to print more money, implement QE and stimulus and relief, raise debt ceiling, and then increase inflation rate beyond normal, lift interest rates, and so on. Another group, which probably includes Novogratz, is against every single one of them.

Rampant consumerism has been encouraged for so many years. I think we would need a shift from consumption in consumerism to a greater emphasis on production and manufacturing.

Unfortunately, production and manufacturing are largely driven by consumerism. They all belong to the same equation. You remove consumerism, a large part of production and manufacturing will crumble.

The economic collapse is already here though. USD is at it's highest inflation rate in 4 decades, and the federal reserve hiked interest rates to slow down inflation. Inflation was already high for USD prior to the Ukrainian war -- problem is that supply chain shortages and post-COVID lockdown economic strain has caused the EUR to increase too. Nearly every market is down and major companies are hiring fewer people or laying off staff.

You don't need to be a top economist to predict an economic collapse. It's a guessing game as to how bad it might be.

[KingsDen]

As the crypto space is characterised by volatility, so also is the economy characterised by inflation and recession. By design, all countries are in the lane of recession. You wouldn't know because the graphs and the spectators have not said it yet. Immediately they announce it, you will begin to feel the effects.
Lols...it doesn't mean you have not been feeling the effects, but you were too strong to deal with it, not until it was announced to you what you have been doing and you'll become weak.

Some say there will be food scarcity, is there no food scarcity now? You will not notice because you  an afford 3 square meals. Wait until it is analysed that there will be food scarcity starting from 25 December, 2022. You will be surprised that you wouldn't have to eat on that day, then you will panic and likewise everyone and the food scarcity will start manifesting immediately.

Bitcoin wants you to be independent, all the information they feed us is manipulated and influenced. Be wise!

[NotATether]

Mike Novogratz says the economy is going to collapse

Wow! Another useful and important piece of information. I just wish I wasn't posting through lynx, because I wanted to put a nice clapping GIF right in this area.

But seriously though...

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.

Recessions don't cause economic collapse (just ask Russia and Asia).

Novogratz didnt give an indication of timing of when a recession will happen, but drew parallels to the 1998 collapse of Long-Term Capital Management fund and the current bloodbath that is happening in the crypto market.

Long Term Capital Management was a highly leveraged fund that lost $4.6 billion in less than four months from its exposure to the 1997 Asian financial crisis and the 1998 Russian financial crisis. The fall of the investing giant sent shock waves through global markets and led to a $3.6 billion bailout.

If you are investing in a highly leveraged fund in really bad marketing conditions then you almost deserve to lose your investment thanks to your dull thinking that you'd make a leveraged profit in bad conditions.

Fortunately for us, Bitcoin is not a leveraged currency. The worst that will happen is the ameteurs who banked up a lot on Binance Futures and similar markets will get liquidated (which hopefully will serve as a lesson for them not to buy with leverage).