Nope. It's interest rates (hear us out)...

Do you ever feel like your interests are starting to differ from those of your friends and family?

When all they want to talk about is the real estate market, mortgage rates, and rising gas prices - all you want to talk about is the ebbs and flows of the crypto world.

If you're feeling this drift, don't stress - we're here to join the dots of your common interests and bring you back together.

The common factor here is interest rates.

Interest rates are the through line that'll connect your differing curiosities, no matter where your financial interests fall.

Confused? It goes like this...

Real estate valuations, mortgage rates, and the fluctuating prices of crypto have all been affected in some way by inflation, over the past few years.

It's a two-pronged effect:

The more money that is printed and made available → the less scarce it becomes → the less valuable it becomes → the more of it businesses ask for in exchange for goods & services.

At the same time...

The more money that is printed and made available → the more people have to spend → the more they buy → the more demand there is for...well, everything → the more expensive things become (from food, to houses, to crypto).

Combine these two forces and you have a 'perfect storm' of inflation.

And we're feeling the results of it now. E.g. something that might have cost $5 in 2020, may now cost $7-10 (depending on the category).

'Right, right, right - but where do interest rates come into it??'

Fair point, let's land this plane.

Interest rate hikes are used by governments to fight inflation.

When they increase rates, it makes it expensive to borrow money, which makes money harder to get, which means there's less of it floating around for people to spend.

The less people spend → the scarcer cash becomes → the more valuable it becomes → the less of it businesses ask for in exchange for goods & services.

The idea being that interest rate hikes will eventually lead to an overall reduction in the cost of living.

(At least that's the aim - the desired effects haven't taken hold just yet).

Point is: these rate hikes are felt across the board.

Whether it's higher monthly mortgage repayments for some, or less cash flowing into crypto markets for others.

It's all connected (and your interests aren't all that different).

Now - who's ready to join hands and belt out a few verses of 'Kumbaya, My Lord'?

...anyone?

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