The Price of Easy Money Now Coming Due | Wolf Street

the market capitalization of these cryptos reached $3 trillion, trillion with a T, about a year ago, and then when the Fed started raising its interest rates and started doing QT, the whole thing just blows up. Companies go like POOF, and the money is gone, and whatever is left is stuck in bankruptcy courts globally possibly for years. Cryptos themselves have imploded. Many have gone to essentially zero and have been abandoned for dead. The granddaddy, bitcoin, has plunged by something like 73% from the peak. The whole crypto market is also down about 73%.

In San Francisco, for example, one of the formerly hottest and most expensive housing markets in the US, house prices peaked in March this year at over $2 million median price for a single-family house. Then prices began plunging. In November, the median price was down by 21% compared to a year ago, and down by 27% from the peak in May. That’s a huge drop in a short time.

There’s other crazy stuff that came out of the money-printing and interest rate repression era. And all of them are now coming apart, some slowly like the racket by the Swiss National Bank, and some more rapidly, and some have already imploded like a thousand US stocks and a gazillion cryptos and crypto companies.

These 13 years of free money have turned out to be very costly afterwards, as we can now see. But on the positive side, this process provides a much-needed clean-up of the mind-boggling messes created by free money.

The Price of Easy Money Now Coming Due | Wolf Street