The market is going down, but I would say this is a good entry time. If you read my old post, you will know why. But let me tell you the reasons for the current dip in the market. I believe very few people would tell you this.
The whole world relies on one single currency, which is the USD. Even all countries keep USD as foreign reserves. This gives America ultimate power to control the whole world’s economy.
But unlike other countries, America cannot print USD as much as they want. Although printing money benefits America. For example, America bought 1 trillion dollars' worth of gold from other countries. Now, if they start printing money, the value of the USD will reduce. Let’s say a 20% inflation happens, and now America, if they sell the gold, they are making a 20% profit.
The issue is, they cannot do this. They cannot print money without any valid reason. They do this when a crisis happens, like War, Pandemic. If there is no significant event, then they keep the inflation around 2-3%. This is one of the major reasons we see a sudden pump in all markets during specific events.
Now, you may ask, if people of America know there is 2-3% inflation happening every year, why would they even save their money in flat currency (a.k.a. bank deposit)?
That’s why the American government previously announced bonds, where they provided the same amount of interest matching with the regular inflation. All banks mostly kept their money in bonds and provided the Americans with 1.5-2% interest per year. But as America is getting involved in many ways and facing economic crises and there are trillions in national debt, they changed their approach and now started printing money aggressively.
People of America, who save their money in banks, aren’t happy about this. So, now America is deciding to increase the Bank interest rate up to 9%. (So, if 10% inflation happens, the person saving money on bank will lose only 1%).
Now this will neutralize the inflation effect. That is why after the news, we noticed a big dip in the crypto and commodity markets.