Imminent ‘storm’ in crypto, stocks as Fed smashes markets – Clem Chambers

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As the Federal Reserve continues to raise interest rates, investors should expect a break in the markets, said Clem Chambers, CEO of Online Blockchain.

Whether [The Fed] really wants to chase inflation, something has to break, he said. If they really mean it, there will be an almighty crash.

Chambers claimed that equities and crypto, assets that have seen significant declines in 2022, are in the midst of an impending storm ahead of a major crash.

Everyone remembers the big drop in 2008, but there was a bear market in 2007, which was an impending storm, he said. I think what is happening now is potentially an impending storm.

Chambers spoke with David Lin, presenter and producer at Kitco News.

Investing in Bear Markets

Some analysts have suggested that stocks and crypto are experiencing a bear market. Chambers claimed that, as a hedge, he took a cash-heavy position, despite his assets being eaten away by the butterflies of inflation.

I’d rather have my money in Benjamins than in Facebook, he said, implying that cash would lose less purchasing power than stocks.

He said his strategy is to wait for markets to bottom and then build up, using cash reserves to buy assets at bargain prices.

Rather than trying to surf that downward slope, let it rest, he said. Save some money, let it sit, then pile it to the bottom.

However, he suggested that if investors want to go long on certain assets, they invest in high-risk companies.

Take some money out of your pile and set it aside and [invest in] high-risk things, he explained. You need to look for special opportunities.

Inflation and stocks

Inflation peaked in 2022 at 9.1% in June, before falling back to 7.7% in October. Chambers said inflation is fundamentally caused by excess money.

Inflation is driven by the money supply, he said. If you keep printing more money because you have a giant sized budget deficit, you have to feed that deficit If you print another $1 trillion every year to fill your government deficit, you will get underlying inflation at average scale of 4, 5 or 6%.

While loose monetary policy can lead to asset bubbles, that’s not always the case, Chambers said.

Some people will say it’s inflation, so a Microsoft stock will be worth 11% more if you have 11% inflation, he explained. It didn’t work in the 1970s, the last time we had high inflation. The stock market has really suffered because everyone [thought] it was a scary environment.

For Chambers’ secret investment advice, watch the video above

Follow David Lin on Twitter: @davidlin_TV

Follow Kitco News on Twitter: @KitcoNewsNOW

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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