Fed Watch is a weekly podcast with Bitcoin Magazine's Podcast Editor CK and Historian/Economist Ansel Lindner of Bitcoinand Markets.com. Ck and Ansel interview the best analysts, traders, and thinks in both Macro economics and Bitcoin as well as give the audience their takes of important news and press conferences in the macro space. This is the perfect podcast to learn about and stay on top of Bitcoin, Macro Economics, and the world at large.
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Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / RSS Slide deck for episode Our podcast feed is changing to the Bitcoin Magazine feed! Subscribe here! Fed Watch is a macro podcast like no other. We question narratives and schools of thought, trying to form our own understanding. Each episode we use current events to question mainstream and bitcoin narratives across the globe, with an emphasis on central banks and currencies. In this episode, CK is back with us for a huge week in macro. We cover all the big events of the week like the Federal Reserve's FOMC meeting and Chairman Powell's comments, the US CPI data released on Tuesday, and finally, the big decision out of the European Central Bank about their policy changes. Of course we cover bitcoin as well, along with some other macro charts. Join the Bitcoin and Markets telegram (link) for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com (link) to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Episode specific links NEW PODCAST FEED after this episode https://anchor.fm/bitcoin-magazine-po/ Ansel Lindner https://twitter.com/ansellindner CK https://twitter.com/ck_snarks Slide deck: http://tiny.cc/3732vz Bitcoin & Markets Telegram: https://t.me/bitcoinandmarkets Powell press conference: https://youtu.be/Ho2iJXlcmR8 CPI data: https://www.bls.gov/cpi/ ECB policy changes: https://www.zerohedge.com/markets/hawkish-ecb-hikes-50bps-will-begin-qt-march-raises-inflation-expectations If you enjoy this content please LIKE, SUBSCRIBE, REVIEW on iTunes, and SHARE! Written by Ansel Lindner
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / RSS Slide deck for episode Fed Watch is a macro podcast like no other. We question narratives and schools of thought, trying to form our own understanding. Each episode we use current events to question mainstream and bitcoin narratives across the globe, with an emphasis on central banks and currencies. In this episode, I'm joined once again by Nolan Bauerle, new host of Bitcoin Magazine Live. We spend a good amount of time going through my macro charts for the week, you can find them in this week's slide deck. Next, we discussed the BIS report of the missing $80 trillion in some detail. Lastly, we reviewed China's latest economic data and discussed the state of global shipping and where we think China is going. Join the Bitcoin and Markets telegram (link) for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com (link) to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Episode specific links Ansel Lindner https://twitter.com/ansellindner CK https://twitter.com/ck_snarks Slide deck: https://tinyurl.com/4vcy9av9 Bitcoin & Markets Telegram: https://t.me/bitcoinandmarkets BIS report: https://www.bis.org/publ/qtrpdf/r_qt2212h.pdf China trade shrinks: https://apnews.com/article/business-china-asia-global-trade-economy-4d316f787cf4123981d47a3f5c78da7f Global shipping shrinks: https://www.cnbc.com/2022/12/07/freight-rates-from-china-to-west-coast-down-90percent-as-trade-falls-rapidly.html If you enjoy this content please LIKE, SUBSCRIBE, REVIEW on iTunes, and SHARE! Written by Ansel Lindner
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Slide deck for episode Fed Watch is a macro podcast like no other. We question narratives and schools of thought, trying to form our own understanding. Each episode we use current events to question mainstream and bitcoin narratives across the globe, with an emphasis on central banks and currencies. In this episode, I'm joined by Nolan Bauerle, new host of Bitcoin Magazine Live. Our main topics of discussion are Jerome Powell and his Brookings Institute speech, and the growing conflict in Turkey. I had prepared some charts (you can see them in the linked slide deck above), but was not able to get to them due to time constraints. It's a wide ranging discussion about societal signaling, monetary policy and even demographics. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. THIS EPISODE'S SPONSORS: Bitcoin 2023 Miami - https://b.tc/conference/ Bitcoin Magazine - https://store.bitcoinmagazine.com/ Bitcoin Magazine Pro - https://bitcoinmagazine.com/tags/bitcoin-magazine-pro Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store!
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Slide deck for episode Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I celebrate Thanksgiving by telling what we're thankful for in Bitcoin. Our main topics include the bitcoin chart and review of the FTX and GBTC story. Next, we drill down on the Fed's recently released FOMC minutes, mixed messaging from board members and likelihood of policy direction. The last topic for the day is China, starting with the riots at Foxconn and then a general discussion about their demographics. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. THIS EPISODE'S SPONSORS: Bitcoin 2023 Miami - https://b.tc/conference/ Bitcoin Magazine - https://store.bitcoinmagazine.com/ Bitcoin Magazine Pro - https://bitcoinmagazine.com/tags/bitcoin-magazine-pro Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store!
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Slide deck for episode Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I cover our reactions to the FTX debacle, the latest CPI numbers out of the US, the new CBDC pilot by the Federal Reserve and banks, and touch on the G20 meeting in Bali. We run out of time at the end and don't cover it as well as I'd like to, but perhaps I'll remedy it with a supplemental episode before next week. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Link mentioned in the podcast: Jason Choi's definitive FTX thread THIS EPISODE'S SPONSORS: Bitcoin 2023 Miami - https://b.tc/conference/ Bitcoin Magazine - https://store.bitcoinmagazine.com/ Bitcoin Magazine Pro - https://bitcoinmagazine.com/tags/bitcoin-magazine-pro Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store!
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Slide deck for episode Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I cover Jerome Powell and the FOMC policy decision in depth, quoting the Federal Reserve itself, Powell, and other financial experts. Of course, we give our own opinions on the matter, as well. After Fed Day content we move onto charts, starting with bitcoin and the dollar, and moving onto Treasury securities rates. Lastly, we discuss the diesel shortage brewing on the US east coast. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store! https://store.bitcoinmagazine.com/ Check out the Bitcoin Magazine products presented during the Podcast: Bitcoin 2023 Miami - https://b.tc/conference/ Bitcoin Magazine - https://store.bitcoinmagazine.com/ Bitcoin Magazine Pro - https://bitcoinmagazine.com/tags/bitcoin-magazine-pro
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Slide deck for episode Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I cover extremely important updates for the future of the global economy. First, we talk about the Bitcoin breakout. Then continue rolling through several more macro charts, including currencies, US Treasury yields, European natural gas prices, and finally freight rates, both bulk dry and container rates. Lastly, we listen to several clips from a China expert on what happened at the 20th Party Congress, and what it means for the future of China. Here is the original video source of the clips. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store! https://store.bitcoinmagazine.com/
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Slide deck for episode Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I cover a large chunk of the ongoing macro news. First, we update the situation in the UK Gilt market. Then swing over the China to cover developments from the 20th Party Congress, the real estate market, and the general investment climate. Lastly, we discuss the European energy crisis and current storage situation. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store! https://store.bitcoinmagazine.com/
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Clipped down episodes: Fed Watch Clips YT Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Slide deck for episode Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I cover a large chunk of the ongoing macro news. First, the NY Fed's Williams speech on inflation, then the UN report demanding central banks change course, and finally the OPEC+ decision to cut quotas by 2 million barrels per day (mbd). Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store! https://store.bitcoinmagazine.com/
Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I got the privilege to sit down with David Lawant of Bitwise to discuss macro and its relation to Bitcoin. We cover Bitwise and David's take on the current Bitcoin market, price, and ETF likelihood. On the macro side, we cover the UK emergency monetary policy change and China's pivot on the Belt and Road lending practices. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Special guest: David Lawant Slide deck for episode
In this episode, CK and I got the privilege to sit down with Andreas Steno, editor at Real Vision, co-host of the Macro Trading Floor podcast, and author of Steno Signals substack. Our discussion centers around the energy situation in Europe, but we start with talking about the Federal Reserve's FOMC rate hike. Andreas has extensive knowledge of Bitcoin and his podcast Macro Trading Floor is hosted through Blockworks, which means we also got to pick his brain about his thoughts on the Bitcoin market. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store! https://store.bitcoinmagazine.com/ Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Special guest: Andreas Steno
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Watch this Episode: YouTube / Rumble Slide deck Fed Watch is a macro podcast, true to bitcoin's rebel nature. In each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I get down and dirty in the August CPI data, some shocking Chinese economic data, and we talk about bitcoin and Ethereum prices. Join the Bitcoin and Markets telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report.
Hosts: Ansel Lindner and Christian Keroles Watch this Episode: YouTube / Rumble Slide deck Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I examine the current state of the Bitcoin market, the state of panic in Europe including some myths about the EU/Russia conflict, and finally read through an article about how China is really a Marxist country and proud of that fact. Join my telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report. Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store! https://store.bitcoinmagazine.com/
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Watch this Episode: YouTube / Rumble Slide deck Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I break down some charts, including bitcoin, the dollar, European energy, and US gasoline futures. Next, I read through a couple articles and address the complicated financial situation in China. Lastly, we examine what the big deal is with Zoltan Pozsar's latest dispatch about “Chussia”. Join my telegram for constant updates on bitcoin and macro, and go to bitcoinandmarkets.com to sign up for my free weekly newsletter the Bitcoin Fundamentals Report.
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Watch this Episode: YouTube / Rumble Slide deck Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I revisit the Pakistan problems, check out the bitcoin chart and currencies, discuss what's coming up for the Federal Reserve, and then dive into the European Central Bank's most recent report on CBDCs. Don't forget to check out the Fed Watch Clips channel on YouTube. Liking and sharing YT and Rumble videos is the best way for us to reach new people. Thank you!
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Watch this Episode: YouTube / Rumble Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I dive into the surprise rate cuts by the People's Bank of China (PBOC) and read through some of Jamie Dimon's recent leaked comments about the global economy and geopolitics. Audio listeners can follow along with the slides here. Don't forget to check out the Fed Watch Clips channel on YouTube. Liking and sharing YT and Rumble videos is the best way for us to reach new people. Thank you!
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Fed Watch is a macro podcast, true to bitcoin's rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode of Fed Watch, CK and I go through several charts, giving market updates on bitcoin, the dollar (DXY), and the Hong Kong dollar. Next, we examine the deteriorating situation in Pakistan, and ask the question, is it the next Sri Lanka. Lastly, we discuss the Taiwan - China situation and I read several important snippets, one from Chinese foriegn minister Wang Yi and the other from think tank expert Wang Wen. Audio listeners can follow along with the slides here. Don't forget to check out the Fed Watch Clips channel on YouTube. Liking and sharing YT videos is the best way for us to reach new people. Thank you!
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Fed Watch is a macro podcast, true to bitcoin's rebellious nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode of Fed Watch, CK and I go through several charts, using them to springboard into different topics. We cover the bitcoin chart, the dollar, the Hong Kong dollar, US Treasury yields, and energy charts like oil, gasoline and natural gas. Audio listeners can follow along with the slides here. All images are sourced to bitcoinandmarkets.com. Don't forget to check out the Fed Watch Clips channel on YouTube. Liking and sharing YT videos is the best way for us to reach new people. Thank you! Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store! https://store.bitcoinmagazine.com/
Hosts: Ansel Lindner and Christian Keroles Guests: Q_liketheletter and Chris Alaimo Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Fed Watch is a macro podcast with a true rebellious bitcoin nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, I'm joined by Q and Chris of the live stream crew to talk about the recession vs not-a-recession vs depression debate. I also dive into understanding the temporary effects of fiscal spending by governments and the brick wall facing the global economy, demonstrated through yield curves. We finish up with a Q & Ansel (Q&A) with questions from the guys and my community. Don't forget to check out the Fed Watch Clips channel on YouTube. Liking and sharing YT videos is the best way for us to reach new people. Thank you! You can find the slide deck for this episode here.
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Fed Watch is a macro podcast with a true rebellious bitcoin nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I catch up on the week, go through an update on the evolving Chinese financial crisis, talk about why “fiat” money today should rightly be called credit-based money and the side effects of that fact, and lastly, we dive into the bitcoin chart and so forth. You can access this episode's slide deck of charts here or below, depending on the medium where you are viewing these show notes. Please check out the Fed Watch Clips channel on YouTube, subscribe and share. China First up, is the situation in the Chinese economy. They are facing some major issues in their real estate market, economy and banking system. Currently, 28 of the top 100 real estate developers have defaulted on or restructured their debts. There is a growing “mortgage boycott”, where purchasers of unbuilt housing units in projects that are now delayed due to the pandemic, developer financial situation, and zero Covid policy, have refused to pay their mortgages. It started with 20 projects and has since grown to 230 projects. The boycott accounts for roughly 100,000 households refusing to pay their mortgages. This amounts to 0.1-0.5% of all outstanding mortgages and 1% of outstanding mortgage value. The rhetoric around this mortgage crisis is eerily similar to that in the US in 2007. Excuses like it is a small number of mortgages, effects are contained, and others are being used. As a result of the developer and mortgage problems, small and medium-sized banks are running into solvency issues. Chinese banks have $9 trillion in exposure to real estate and it accounts for 20% of bank assets. You can see if there were a problem with perpetually falling home prices, it could very quickly cause a solvency issue for banks as well. Indeed, that is exactly what we are seeing. Lower your time preference and lock in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023 Use promocode: BMLIVE for 10% off everything in our store! https://store.bitcoinmagazine.com/ #bitcoin #bitcoinmagazine #money #btc #crypto #cryptocurrencies #cryptocurrency #cryptonews #buybitcoin #shouldibuybitcoin #fedatch
Hosts: Ansel Lindner and Christian Keroles Guest: Joe Carlasare Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Fed Watch is a macro podcast with a true rebellious bitcoin nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, I sit down for an interview with commercial litigator and co-host of the Inside Bitcoin podcast, Joe Carlasare. Joe is a no nonsense analyst of bitcoin, the bond market, and monetary dynamics. He is known for saying that all our models for bitcoin are dead, and I thought this would be a good opportunity to get him on and hash out some new narratives for bitcoin, especially being that we see eye-to-eye on many things in macro. Joe is also appearing in an upcoming series with Bitcoin TINA and CK about the future path and new models for bitcoin valuation, which should be out very soon on Bitcoin Magazine. Joe and I start by breaking down the yield curve and the importance of the recent inversions. With the 10-year US Treasury yield falling under the 2-year, the curve is “officially” inverted, and signals that the deepest most sophisticated market in the world is pricing in an economic downturn. In other words, there is a landmine in the near future that we can glimpse by looking at the yield curve. We also discussed the impotence of the Federal Reserve and cult-like mythology surrounding the Federal Reserve. Joe is an adherent to the Eurodollar framework of the financial system, and as such does not believe the central banks are central to their economies. What we have today is a bank centered system, and the mechanism of central bank policy is through expectation management, not cold hard supply and demand as the mythology would have us believe. We have a wide-ranging discussion on commodities, the future path of QE and CPI, Japanification, and the dollar shortage. We finally arrive at trying to form some new narratives in bitcoin that will be sustainable in the monetary reality we are experiencing. This is a great episode and I hope to get Joe back on so we can dig down deeper into these new narratives. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE! Written by Ansel Lindner
Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I go through what's coming up for the Fed, tons of macro charts, the spike in Credit Suisse CDS, BIS news about making bitcoin a reserve asset banks can hold, and take some Q&A from Twitter. You can access the slide deck with charts here. Enjoy. We will be back to our regular time next week, Tuesdays at 3:00 P.M. Eastern time on the Bitcoin Magazine YouTube channel. Mark your calendars! Links More details BitcoinandMarkets.com/fed102 Slide deck with charts https://docs.google.com/presentation/d/1Kz6NiwJaI9fhRN6vnLPnf3uNVEgQ3ssSx2h_zW3sdvo/edit?usp=sharing That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE! Written by Ansel Lindner
Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, I tackle a question CK put to me in FED 100, namely, why does the Euro face fragmentation risk and the dollar doesn't? My answer on the last show was sub-par, so I thought I'd take it up again, this time with more nuance. When evaluating the dollar's fragmentation risk, we can look at it from an internal perspective of fragmentation within the 50 States, or an external perspective of a fragmentation of the global dollar system. I answer the question in this episode from both angles, and also explain how bitcoin becomes a “must have” money in the future. We livestream most of our shows on the Bitcoin Magazine YouTube channel on Tuesdays at 3:00 P.M. Eastern time. Mark your calendars! Links Here is some further reading on internal differences: Academic paper https://sci-hub.ru/10.1257/aer.103.3.125 Associated LSE blog post https://blogs.lse.ac.uk/europpblog/2013/08/26/the-us-may-show-the-eu-the-way-forward-on-fiscal-integration/ Historic defense/security costs https://eh.net/encyclopedia/military-spending-patterns-in-history/ Fiscal politics in the Euro Area https://www.imf.org/-/media/Files/Publications/WP/wp1718.ashx That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE! Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Charts for episode can be found on BitcoinandMarkets.com/fed100 Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I cover developments in Japan in regards to Yield Curve Control, in the US in regards to growth and inflation forecasts, and in Europe in regards to the concern about fragmentation. At the end of the episode, we celebrate the 100th episode of Fed Watch by reviewing some of the guests and calls we have made throughout the show's history. Big Trouble in Japan The economic troubles in Japan are legendary at this point. They have suffered through several lost decades of low growth and low inflation, addressed by the best monetary policy tools of the day, by some of the best experts in economics (maybe that was the mistake). None of it has worked, but let's take a minute to review how we got here. Japan entered their recession/depression back in 1991 after their giant asset bubble burst. Since that time, Japanese economic growth has been averaging roughly 1% a year, with low unemployment, and very low dynamism. It's not negative GDP growth, but it's the bare minimum to have an economic pulse. To address these issues, Japan became the first major central bank to launch Quantitative Easing (QE) in 2001. This is where the central bank, Bank of Japan (BOJ) would buy government securities from the banks in an attempt to correct any balance sheet problems, clearing the way for those banks to lend (aka print money). That first attempt at QE failed miserably, and in fact, caused growth to fall from 1.1% down to 1%. The Japanese were convinced by Western academic economists, like Paul Krugman, who claimed the BOJ failed because they had not "credibly promised to be irresponsible". They must change the inflation/growth expectations of the people by shocking them into inflationary worry. Round two of monetary policy in 2013 was dubbed QQE (Quantitative and Qualitative Easing). In this strategy, the BOJ would cause "shock and awe" at their profligacy, buying not only government securities but other assets like ETFs on the Tokyo stock market. Of course, this failed, too. Round three was the addition of Yield Curve Control (YCC) in 2016, where the BOJ would peg the yield on the 10-year Japanese Government Bond (JGB) to a range of ±10 bps. In 2018, that range was expanded to ±20 bps, and in 2021 to ±25 bps, where we are today. The YCC Fight As the world is now dealing with massive price rises due to the economic hurricane, the government bond yield curve in Japan is pressing upward, testing the BOJ's resolve. As of now, the ceiling has been breached several times, but it hasn't completely burst through. The BOJ now owns more than 50% of all government bonds, on top of their huge share of ETFs on their stock exchange. At this rate, the entire Japanese economy is going to be owned by the BOJ soon. The Yen is also crashing against the dollar. Below is the exchange rate, how many yen to a US dollar. Federal Reserve DSGE Forecasts Federal Reserve Chairman, Jerome Powell, went in front of Congress this week and said that a US recession was not his "base case", despite nearly all economic indicators crashing in the last month. Here we take a look at the Fed's own DSGE model. The New York Fed DSGE (dynamic stochastic general equilibrium) model has been used to forecast the economy since 2011, and its forecasts have been made public continuously since 2014.The current version of the New York Fed DSGE model is a closed economy, representative agent, rational expectations model (although we deviate from rational expectations in modeling the impact of recent policy changes, such as average inflation targeting, on the economy). The model is medium scale, in that it involves several aggregate variables such as consumption and investment, but is not as detailed as other, larger, models. As you can see below, the model is predicting this year's Q4 to Q4 GDP to be negative, as well as the 2023 GDP. That checks with my own estimation and expectation that the US will experience a prolonged but slight recession, while the rest of the world experiences a deeper recession. In the below chart, I point out the return to the post Great Financial Crisis (GFC) norm of low growth and low inflation, a norm shared by Japan by the way. European Anti-fragmentation Cracks Only a week after we showed watchers and listeners of Fed Watch ECB President Christine Lagarde's frustration at the repeated anti-fragmentation questions, EU heavyweight, Dutch Prime Minister Mark Rutte, comes through like a bull in a china shop. I read parts of an article from Bloomberg, where Rutte claims it's up to Italy, not the ECB, to contain credit spreads. What's the big worry about fragmentation anyway? The European Monetary Union (EMU, aka Eurozone), is a monetary union without a fiscal union. The ECB policy must serve different countries with different indebtedness. This means that ECB policy on interest rates will affect each country within the union differently, and more indebted countries like Italy, Greece and Spain will suffer a greater burden of rising rates. The worry is that these credit spreads will lead to another European Debt Crisis 2.0, and perhaps even political fractures as well. Countries could be forced to leave the Eurozone and/or the European Union itself over this issue. Lookback on 100 Episodes The last part of this episode is spent looking back at some of the predictions and great calls we've made. It didn't go according to my plan, however, and we got lost in some weeds. But overall, we were able to highlight the success of our unique theories put forward by this show in the bitcoin space. Strong dollar Bitcoin and USD stablecoin dominance US's relative decentralization makes it a better fit for bitcoin Bearish on China and Europe We also highlight some specific calls that have been spot on, which you'll have to watch the episode to hear. I wanted to highlight these things to show the success of our contrarian views, despite being unpopular amongst bitcoiners. This show is an important voice in the bitcoin scene because we are prodding and poking the narratives to find the truth of the global monetary system. Links More on Japan's YCC trouble https://archive.ph/zcIOW Federal Reserves DSGE model https://www.newyorkfed.org/research/policy/dsge#/interactive Mark Rutte on fragmentation https://archive.ph/K6nHI That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE! Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple / Spotify / Google / Libsyn / Overcast / RSS Charts for episode can be found on BitcoinandMarkets.com/fed99 If you enjoy this content please SHARE, LIKE, SUBSCRIBE, and REVIEW on iTunes if you listen! Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, CK and I listen and react to highlights from this month's two central bank press conferences, Federal Reserve Chairman Powell and ECB President Lagarde. Central banks are one of the most misunderstood institutions in our modern world. Many analysts simply tell you what the Fed or the ECB thinks and what they do to disrupt the global economy, but on our show, we like to give you primary source material from which you can start to form your own educated opinion. We live stream most of our shows on the Bitcoin Magazine YouTube channel on Tuesdays at 3pm eastern. Mark your calendars! Federal Reserve Chairman Powell's highlights and reaction Chairman Powell's comments were highlighted by a few narratives. These are simply what they say they are doing, not our analysis. Their primary concern is inflation fighting They will be adaptive to new data A tight employment market threatens to exacerbate inflation They cannot affect the supply side, so they will tamp down demand to bring down prices The main metric guiding the Federal Reserve's course of rate hikes is CPI and “inflation” expectations. There are several ways to measure this, the Fed uses consumer surveys. This is a critical distinction between surveys and market-derived expectations, because surveys will not distinguish sources of price increases where the market-derived measures will do that. Below is the Fed's survey of inflation expectations. You can see, the median prediction is above 8%. However, the market-derived data, namely the 5 and 10-year Breakevens and the 5y-5y Forward, are showing inflation expectations around 2.5%. What accounts for this huge difference? It is because the market-derived data is measuring actual money printing, or in other words, actual inflation. The survey data on the other hand is measuring generic price increases which are much more highly affected by supply shocks; in this case, self-imposed supply shocks. ECB President Lagarde highlights and reaction We also listen to a few clips of President Lagarde's press conference. Here we get a flavor for the ECB's formative narratives. Inflation is the fault of Covid and Putin Their governing council has expertly formulated a journey to normality They will begin to raise rates and tighten their balance sheet in July They are dedicated to “anti-fragmentation”, or in other words, avoiding a European Debt Crisis 2.0 and keeping the Eurozone together They have all powerful tools The ECB faces a different challenge than the Federal Reserve. The ECB must raise rates with some more indebted countries, already with anti-Euro parties growing, facing uneven effects, as we can see with credit spreads in Italy for example. Links Powell's speech https://youtu.be/IojU0hD3A_A Lagarde and the ECB https://youtu.be/d_utpAxGMYo Reuters article https://www.reuters.com/markets/europe/ecb-hold-unscheduled-meeting-discuss-market-rout-2022-06-15/ That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE! Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currency matters. In this episode of the Fed Watch podcast, I get to sit down with Tone Vays, a true bitcoiner and long time price and macro analyst in Bitcoin. Our discussion ranges from the current conditions, to Bitcoin cycles, to broader macro topics including the state of Europe, Euro, and US politics. You can follow Tone on Twitter, instagram and YouTube. You can find the charts for this episode on BitcoinandMarkets.com/fed98. And watch the live stream on Bitcoin Magazine's channel. Current Bitcoin Market Conditions In the first segment of the podcast, Tone talks about the psychological state of the Bitcoin market. Paraphrasing: “I was around for the last two bear markets. 2013 was the classic bubble chart, you were mentally prepared for what's to come. 2017, again, the ICOs, it was an unreasonable exponential rise, so you were mentally prepared. I wasn't mentally prepared for this one. Because, when the top came in April 2021, we had an incredible amount of good news. Michael Saylor, Elon Musk, Jack Dorsey leaving Twitter to go all in on Bitcoin with Square (Block), El Salvador, then El Salvador buying bitcoin. “That turned into a sell the news event. 50% correction, no big deal. Everyone was mentally fine with it. Then, this is where it's all about your mental state. When we went back and broke that top, in November, that was THE breakout. Everyone thought we were going higher, I thought we were going higher. That fakeout in November was mentally brutal. We crashed back the $30,000 low, broke down to $20,000, and over the last 3-6 months people have been very very concerned. “This prolonged move has made people tighten their belts. Mentally, they feel like they were cheated and don't think bitcoin should be at these lows. Bitcoin was built for this world we are seeing right now with all the uncertainty. They are stealing bank accounts from not just individuals, like in Canada, but from sovereign countries. Bitcoin was built for this, but the price keeps going down. People are starting to throw in the towel. Everyone is saying lower, lower, lower. This is where I have to believe that the majority is always wrong.” Bitcoin Cycles I asked Tone about bitcoin valuation models and 4-year cycles, whether they are all broken and if we need to find a new model. He says he thinks models always fail. Stock-to-flow is theoretically correct in Tone's mind, but it cannot be successfully used as a technical indicator. As for the 4-year halving cycle, Tone believes that it is partly due to hype and partly due to actual supply shocks. That is my position here on Fed Watch as well. It has its own hype cycle, completely separate from the overall bitcoin hype. Kind of similar to how altcoins try to hype their hard fork upgrades, bitcoin accomplishes that naturally through the halving. However, I think the hype is lessening with each cycle, along with the supply shock aspect. That is why I now believe we have a 2-year cycle of sorts. A smaller effect from the halving, but which still causes an echo a couple years later. Tone insightfully points out that there is much less of a clear distinction between bull and bear markets. Price action in the years 2020 and 2021 do not lend themselves to a clear dividing line. Going forward therefore, it will become harder to delineate these cycles. Europe Crisis and Global Macro We started running up on our hard time limit before we got into the juicy stuff. So, hopefully we can have Tone back on in a few months to continue this discussion. But we did get Tone's opinions on Europe and the Euro. Paraphrasing again: “I will say that I have a very low opinion of Western Europe. It's nice, you go there it's safe, you can walk around the street, you feel fairly safe. It has remnants of collapsing capitalist society, as they hand over all power to the World Economic Forum. I believe that the WEF is too liberal socialists organization. They have too much control over politics. To quote Klaus Schwab, “we have penetrated the cabinets.” And they have. I think the path of the WEF is a very very dangerous path, and I short the future of Western countries that buy into its power. That's why I'm very bearish on Europe. I think the common currency will break up.” We talk about so much more, from bitcoin's correlation to stocks and altcoins, to monetary policy. This is one of my favorite episodes we've ever done on Fed Watch, so it is definitely a must listen. Check out Tone's twitter and YouTube channel. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE! Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
Supply Chains by the Numbers - FED 97 If you enjoy this content please SHARE, LIKE, SUBSCRIBE, and REVIEW on iTunes if you listen! Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currency matters. In this episode of the Fed Watch podcast, I discuss supply and demand, demand destruction, supply chain bottlenecks, shipping and inventory in the US. I take a look at a few representative charts you can find below, including lumber futures, lithium futures, Baltic Dry Index, 40-foot container rates, US inventory glut, and others. Demand Destruction The below simple graph shows supply versus demand during a supply shock and follow on demand destruction. What we are about to see in the US is a huge spike in demand destruction, so the demand curve will shift to the left. This will cause a dramatic lowering of prices and shrinking of the economy. Don't be worried though, because most people can't afford to keep the economy (demand) at current levels, and a lowering of demand will allow people to reallocate and get into a better place. Supply Chain Charts These are a few charts I use to show the relaxation of supply chain problems, and to demonstrate that prices will normalize. Lumber is coming down. Lithium is a market that combines many disparate aspects of the economy right now, all unique affected in this crisis: supply chains since it is mined mainly in Australia, Chile, and China; semiconductors since batteries are used in electronics; and electric cars whose demand is affected by oil prices and globalists agendas. As you can see, lithium prices are coming down for the first time in over a year. The Baltic Dry Index ($BDI) is the rate for bulk raw materials like steel and coal. It too, is coming down, and far past the peak of mid-2021. Freightos is an index for 40-foot container shipping rates. It is falling off a cliff, despite the China lockdowns in Shanghai and Beijing. Inventory Glut The following charts can be found in a recent post by Jeff Snider on Alhambra Partners blog. It shows the unprecedented increase in inventories that has occurred in the US over the last 6 months. It is already starting to affect retailers like Target, who this week announced stopping purchasing orders and slashing prices to fight glutted inventory. What happens when demand softens (as it has been) and inventories start to get liquidated. Prices will fall dramatically. This was the largest and fastest increase in inventories on record in the US. Compared to other periods of big inventory gains, like 2003-2005, which was a 7% increase over 20 months, this spike is 11.5% in only 6 months. Lastly, I read through an article from FreightWaves which details the armageddon that is faced right now by shippers. “This steady decline in volumes from China to the U.S. has also put significant downward pressure on spot rates from the demand side. As capacity remained relatively consistent in the first few weeks post-lockdown (March 28 onward), the drop in volumes caused a decline in both the Freightos Baltic Daily Index and the Drewry World Container Index spot rates from China/East Asia to the U.S. West Coast (down 41% per FEU month-over-month [m/m] – $9,630), as well as from China/East Asia to the U.S. East Coast (down 36% per FEU m/m – $11,907).” Those numbers should perk anyone up, 41% month-over-month. Recession is coming, meaning tightening by the Fed is closer to the end than the beginning, and easing is just around the corner again. That is very good for bitcoin. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE! Links US Import demand is dropping off a cliff https://www.freightwaves.com/news/us-import-demand-drops-off-a-cliff Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
In this episode of the Fed Watch podcast, Christian and I sit down with Dylan LeClair, Head of Market Research at Bitcoin Magazine Pro. Each week, he and Sam Rule, write nearly daily updates for subscribers, and once a month they release a large bitcoin market report. That is what we are covering for the most part in today's episode, Bitcoin Magazine Pro's May 2022 Report. You can find the slide deck we use for this episode here, or you can see all the charts at the end of this post. Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currency matters. Market Cycle Before we get into the awesome charts brought by Dylan, I want to get an idea of where he sees bitcoin in its market cycle timing. I ask, somewhat facetiously, if we are in a bear market, because we are definitely not in a typical 80-90% drawdown. Dylan responds by saying we are in a classic bear market, not necessarily a classic bitcoin bear market. He points out that the upswing of this cycle didn't have the classic parabolic blow-off top we've seen previously in bitcoin, as well as there being more technical and fundamental support in the mid-$20k's up to $30,000, so drawdown pressure will also likely be limited. LeClair also adds that the Average User Cost Basis was hit by the wick to the recent lows. All in all, there is significant support under the price, and it remains to be seen if there is enough bear momentum to break to new lows. Lastly, on the market cycle timing questions, Dylan points out a very underappreciated market development, that being the collateral type on exchanges has mostly switched from bitcoin in previous cycles, to now being stablecoins like Tether and USDC. In other words, the dominant trading pairs and cash deposits on exchanges have changed from bitcoin to stablecoins. In the past, the most important trading pair for any altcoin was versus BTC, that has changed to being versus a stablecoin like USDT. This is a monumental shift in market dynamics and will likely lead to much more stable prices for bitcoin, because less bitcoin will be forced to liquidate in the hyper-speculative shitcoin bubbles. Bitcoin Magazine Pro Charts “This is Coinbase spot volume, being the dominant American exchange, and the Perp [perpetual futures] volume aggregated over a bunch of different derivatives exchanges. What we can see is various volume spikes. Historically, when bitcoin is trading hands in that size, signals some sort of market top or bottom, some significant change in market structure.” - Dylan LeClair The next chart shows the difference in market structure due to stablecoins. Back in the summer of 2021 sell off, Dylan says that 70% of the derivative market was still collateralized by bitcoin, today, it is much much smaller than that. Therefore, we should expect there to be fewer liquidations in bitcoin when shitcoin bubbles pop, and that's exactly what we see. What is great about the Bitcoin Magazine Pro newsletters is they not only look at the bitcoin market but also how macro could be affecting bitcoin. The next two charts are about CPI and interest rates. Dylan does a great job breaking these down during the podcast. I ask Dylan the required question about his thinking on Fed monetary policy, and he focuses his analysis around real interest rates. He says real rates will have to say negative in order to erode the massive global debt burden. Therefore, if the Federal Reserve hikes even to 3.5%, real rates will have to stay negative, meaning the CPI will have to stay above that. Next up is CK's favorite indicator, the Mayer Multiple, or the 200-day moving average price divided by current price. When the price is below the 200-day, this ratio is below 1, and has historically been a good way to time the market. One of the most dense informational charts on Bitcoin Magazine Pro is up next, and that is Reserve Risk. “The Reserve Risk chart basically weighs Hodler conviction, whether strong or weak, with price.” Our last chart for the day is Realized Price, and this is Dylan's favorite. It is a great way to strip out much of the noise and volatility of the bitcoin price, and concentrate on the trend. “One of the cool things about the transparency of this network is, we can see when every single bitcoin has ever moved, or was ever mined. We can also [assign each UTXO a price of when it last moved] to come with what we call Realized Price. [...] We can see when everyone is underwater on average.” Bitcoin Regulation from Senator Lummis At the end of the show we wrap up with a discussion on the recently proposed draft legislation by Senator Lummis, that outlines a new framework for bitcoin and what it calls “digital assets”. In fact, they don't use the term bitcoin at all in the draft, or Ethereum, Blockchain, or even cryptocurrency. Suffice it to say, we tease out some opinions from Dylan and we go back and forth with the live stream crew, but you'll have to listen to get that whole insightful discussion! We dive into the effects on the bitcoin market, exchanges, and a future bitcoin spot ETF! That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE!
In this episode of the Fed Watch podcast, we focus on important macro charts. We cover Bitcoin's chart, currencies like the dollar, the euro, the Hong Kong dollar, and gold, and energy commodities. We don't have time to get to all the charts I prepared, because the live show has time constraints. I will attempt to get a Part 2 out this week, to cover the rest of my commodity charts, as well as supply chains and shipping costs. You can find the slide deck of charts here. Other topics covered in today's episode include Biden and Powell's meeting yesterday, where I try to flesh out the importance of this Wall Street (Powell) vs Globalists (Biden) showdown; and we get into a couple of things from Davos last week, particularly the Kissinger comments about Ukraine. Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currency matters. Currencies First currency up is Bitcoin. I discuss the recent pop in price on Memorial Day in the US, and how it is simultaneous with a growing bullish divergence in the indicators. However, I also go back in time to roughly one year ago, when there was a very similar situation. In June 2021, there was a bullish divergence in these two indicators and a breakout of a descending wedge. That move was a fake out, cut short by the Grayscale (GBTC) unlock wave in July. The current situation is similar on the chart, but not similar in the fundamentals. I just wanted to point out a previous example where a breakout like this week failed. I make an effort to dislodge the bitcoin rise = dollar collapse false narrative here. The dollar and bitcoin can rise together due to deflationary pressures pushing people to cash and away from counterparty risk. Next up is the dollar. On the live stream, I show the following chart and discuss how we could be headed for a new higher range on the dollar. Perhaps, we see another 5-7 years of the DXY in a range of 100-110, kind of like how it jumped into the 90-100 range in 2015. For many who don't like the DXY because it is too narrow (Euro 57.6%, Yen 13.6%, and Pound 11.9%), I provide a chart of the trade-weighted dollar that includes 30+ currencies including Yuan and Mexican peso. In the below chart, we see the same consolidation beginning, but the high that the dollar achieved (excluding the corona crash highs) is a new high. I think this symbolizes a stair step function higher for the trade-weighted dollar as well. Remember, a strong dollar is the Fed failing and it also provides massive stress to the rest of the world's economy. Source: FRED The Euro is nearly the inverse of the DXY. It also shows a recent breakout, but in this case downward. If the dollar rally is to consolidate before heading higher, the Euro is going to consolidate before heading lower. One thing is for sure, the Euro has broken its two decade support trend line, it's in big trouble of crashing much lower. The next two charts are of the Hong Kong Dollar versus the US dollar. There is a peg in place that is plainly obvious on the first chart; it is a range between 7.75 and 7.85. Recently, the exchange rate has raced to the top of this pegged range, signaling massive dollar pressure in the Asian economies like China, Hong Kong, Taiwan, Japan and South Korea. The dollar squeeze rapidly set in starting this year. The second chart of the Hong Kong dollar is a close up of the daily timeframe. The peg was defended successfully this time, by the authorities selling US dollars and buying HK dollars, but the big question is do they have enough reserves to continue defending this peg for the rest of the year, like in 2018? The HK authorities publish their reserve data, so we can get a clue to the severity of their predicament. At the end of April, prior to the peg experiencing its greatest pressure, their reserves stood at $465.7 billion, $16 billion less than March. The last currency we look at is part currency and part commodity, gold. It has been hard being a gold bug for the last 11 years. Currently, the gold price is below the 2011 high of $1920, sitting at $1840 at the time of recording. Imagine, holding for 11 years and losing money despite the narrative of money printing. Your choice at that point would be either abandon your faulty inflation dogma or go crazy on conspiracy theories. That sums up the gold community at this point in my opinion. Energy Commodities Moving onto commodities, on this episode I only have a chance to cover two charts. The first is Brent crude (UK crude price in orange) and WTI crude (US crude price in blue). They often are extremely correlated, with a slight premium on European Brent. I wanted to cover this chart today, because of the headlines about the 6th round of EU sanctions on Russian oil. It is an absolute joke. As you can see on the chart, the orange line actually drops on the day the theatrical sanctions were announced. My thesis for oil prices is as follows. Global demand is collapsing faster than oil supply. Recent elevated prices starting in March are due to the Russia/Ukraine situation causing market uncertainty, and are very overbought. The price of oil will begin to fall soon, lowering prices and CPI, and coinciding with a growth slowdown. This is not a stagflation scenario, it is a deflationary depression scenario after a temporary spike in prices. Natural gas futures in Europe (TTF1!) support my conclusion. They have been radically elevated, far above rational market fundamentals apart from sanctions on Russia. They have refused to be affected by successive rounds of sanctions, telling us that these price levels are mainly due to people's worries, not market fundamentals. Once those worries go away (the end of the Ukraine situation becoming more clear) prices will adjust downward quickly. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE!
In this episode of the Fed Watch podcast, we get interactive with the livestream team, talking about the history of Davos and the World Economic Forum, as well as getting into some Q&A about my Federal Reserve predictions. This week was a slightly slower news cycle in macro and bitcoin, so I took the opportunity to begin a new series of discussing the history of important international institutions, like central banks, the IMF, and this week the World Economic Forum. The history portion take up about 50% of the show this week, and the rest is the probing Q&A mentioned above. Fed Watch is the macro podcast for bitcoiners. Each episode we discuss current events in macro from across the globe, with an emphasis on central banks and currency matters. Beginnings of Davos and the World Economic Forum Davos is the name and place for the yearly meeting of the World Economic Forum. Originally called the European Management Forum, it was founded in 1971 by a business professor in Geneva, the infamous Klaus Schwab. That should be a familiar year to bitcoiners, because it is the same year President Nixon took the US off the remnant of the gold standard. At first, Davos was a small conference of European businessmen discussing Klaus Schwab's ideas of “stakeholder capitalism''. Compared to unbridled capitalism, this new stakeholder idea expanded the ethical duty of the corporation from serving customers and shareholders to also serving employees and suppliers in a socially responsible way. Schwab took this idea further down the slippery slope outlining an ethical duty to the community and “society”, as well. Shareholder capitalism is simply a subtle way to make capitalism more socialist. In 1987, the European Management Forum changed its name to the World Economic Forum and its yearly meeting to Davos. Achievements of Davos One would expect an institution as famous and well-regarded as the World Economic Forum would have many achievements to its name. However, it is a very short list, even after 50 years! It claims a hand in stopping a Turkish/Greek war in 1987, a role in German reunification, and helping to end apartied in South Africa by hosting a handshake between Nelson Mandella and Frederik de Klerk in 1992. And that's about it. Recently, they have claimed some victories on the environmentalism front, too. Then what has the WEF been up to all these years? This is where it gets interesting. In 2004, Klaus Schwab created the Forum of Young Global Leaders. It is a program that graduates roughly 100 rising young leaders from around the world who are destined to high offices, either in government, business or culture. The program boasts 1400 alumni that include Presidents and Prime Ministers, along with some of the wealthiest, most influential people in the world, like Elon Musk and Mark Zuckerberg. These young leaders are indoctrinated into the WEF's brand of Marxism, which you will commonly hear called “globalism”, the modern incarnation of stakeholder capitalism. You know something is pushing a global Marxist agenda when you hear terms like, “socially responsible”, “global governance”, “climate action”, and “management” of all sorts. Covid and The Great Reset Covid-19 gave the World Economic Forum and Klaus Schwab the break they were waiting for. He rapidly released his new book called the Great Reset, making headlines around the world. If you didn't know about the WEF prior to Covid, you do now. The Great Reset is a call for a complete remaking of our world along the lines of stakeholder capitalism and the WEF's brand of Marxism. Its famous marketing tagline is, “You will own nothing and be happy.” Yet again, a conspiracy theory becomes a conspiracy fact. “As we enter a unique window of opportunity to shape the recovery, this initiative will offer insights to help inform all those determining the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons. Drawing from the vision and vast expertise of the leaders engaged across the Forum's communities, the Great Reset initiative has a set of dimensions to build a new social contract that honours the dignity of every human being.” - WEF Ideological Connections Klaus Schwab has a deep Marxist past that starts with Father Câmara from South America. He was invited to speak at the 1974 meeting of the then European Management Forum, and in that speech, Father Câmara called for wealth distribution in very clear language. He also became the first in a string of ‘Liberation Theology' priests to speak at the meeting over the years. Câmara was a well-known revolutionary Marxist and persona non grata to many governments, but also the person whom Schwab called his ‘spiritual father'. His influence was much more broad than just the WEF. Câmara also mentor to Paulo Freire, author of Pedagogy of the Oppressed, the third most cited book in the social sciences and underpins modern ‘Identity Marxism' that has infiltrated Western schools. A third disciple of Câmara is Pope Francis, known in some circles as the Marxist Pope. “If one person lacks what is necessary to live with dignity, it is because another person is detaining it. [...] the right to private property can only be considered a secondary natural right, derived from the principle of the universal destination of created goods.” - Pope Francis, emphasis added What we have here is the World Economic Forum playing a role in a large scale Marxist attack on our society. The three disciples of Câmara, one being Klaus Schwab, play major roles in education, religion and business. World Economic Forum on Stablecoins Before we move on to the Q&A segment of the show, I outline a few times the WEF has spoken about bitcoin. They are very much against bitcoin mining and often have levied attacks against it. In November of last year, they produced a series of white papers about stablecoins and CBDCs. These halfway steps are of course the WEF's preferred way to appear to embrace bitcoin's revolution, while not really embracing anything new. CBDC's in particular are a wonderful way for the WEF and likeminded globalists to co opt the bitcoin revolution and use it to increase their own power and influence. Q&A To wrap up the show, the guys from the livestream team, Chris and Q, ask several questions about the Federal Reserve and the US economic outlook for the next few months. It's a great segment and allows me to flesh out my macro predictions. You'll have to listen to find out! That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, REVIEW on iTunes, and SHARE!
In this episode of the Fed Watch podcast, due to popular demand, I welcome Tom Luongo back on the show! Tom is one of my favorite writers due to his entertaining prose and deeply refreshing insight on global macro, geopolitics, and currency markets. He is also a long-term bitcoiner, discussing it for many years in his writing and podcast. Fed Watch is the macro podcast for bitcoiners. In this episode, we start by getting a big picture view from Tom on the global situation, then dive into some specifics about Europe, the US, the Federal Reserve, Ukraine, and much more. We wrap up the show talking about what Tom sees for the US in the short to midterm, so, the next 3 to 24 months. Below, I'll provide a little more detail on what was said, but this is a MUST LISTEN episode! The Sick Man at the Table The first question I ask Tom is, is he as bearish as everyone else? It seems everywhere we look people are screaming about bear markets and collapse, from macro to geopolitics to bitcoin. However, I think this collapse narrative is overdone, especially for the United States. I ask Tom to give us his broad picture of the state of the markets. He starts in by identifying the sick man at the table, that being Europe. Europe is hit the hardest by the forces that have been unleashed right now, rising commodities prices, rising inflation, loss of confidence in institutions, et cetera. As Europe struggles and begins to cannibalize itself, all that capital in investment portfolios in Europe will eventually have to flow somewhere, and it'll flow to the United States. The conflict that has started in Ukraine is on Europe's doorstep, and specifically on the doorstep of the best economy in Europe over the last decade, Poland. Tom asks rhetorically, “is Warsaw or New York closer to Ukraine?” As investors realize that this new conflict is not going away, and to fight it with economic weapons as they have been, they must destroy their own economies, money will rapidly flee Europe to the US. I'll add, it will also flow into bitcoin. The Federal Reserve is Serious I ask Tom if he thinks the Fed will go through with uber-hawkish rate hikes. His answer eloquently lays out that Powell's plans to raise rates back in 2017 was interrupted by Covid, and now, Powell is going scorched earth to raise rates to break the back of every other central bank and rival currency. The reason the Fed will do this according to Tom Luongo is that the Fed, owned by Wall St banks and US monied interests, is trying to wash out the decade of malinvestment that's built up since the GFC. He also frames it as a fracture in the relationship between US monied interests and the globalists in Europe. We can't understand the Fed without understanding the Davos crowd's intent to rule the world or burn it down. According to Tom, the Federal Reserve will raise rates continually until 2024, to break the back of Davos and the radical globalist/communist objectives. I tend to agree with him, perhaps I wouldn't put it as colorfully as Tom does, but the globalists are “global communists” and will burn the global economy down before they admit defeat. Bitcoin and US Fates are Intertwined The last part of the episode, I ask Tom about my theory that, what is good for the US economy is good for bitcoin, at this moment in time. A majority of the bitcoin supply is likely held by US entities, the US has the largest share of mining, the largest share of bitcoin interested people, the most venture capital money, and some of the most lacks regulation. So, if bitcoin is to thrive in a major economy, it will be the US. Tom tends to agree with me on this, but breaks it down in more detail, saying there is a segment of Wall St that likes bitcoin, and those are the same people fighting Davos. They are planning a SWIFT replacement, and are friendly to Proof-of-work coins because they have money in it now, with mining taking off in the US. I can't cover all his comments in detail, because what is great about Tom Luongo is he takes threads from many different topics and weaves them together into a refreshing perspective. After the above exchange, we get into bitcoin's future in regards to Europe. While we both are relatively bullish on the US economy over the next 10 years, and that will be good for bitcoin, we are also both very bearish on Europe, and that too, will be good for bitcoin, as it gives European capital a reason to flee into bitcoin. Again, this is a MUST LISTEN episode, with deadly serious topics mixed with Tom's entertaining storytelling ability. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
Market Mayhem and Calling the Bitcoin Bottom - FED 92 Keywords: Hosts: Ansel Lindner and Christian Keroles Listen To This Episode: Apple Spotify Google Libsyn Overcast If you enjoy this content please SHARE, LIKE, SUBSCRIBE, and REVIEW on iTunes if you listen! In this episode of the Fed Watch podcast, CK and I, along with the livestream crew, discuss macro developments relevant to bitcoin. Topics include the recent 50 bps rate hike from the Federal Reserve, a CPI preview (recorded live on Tuesday before data release), discussion on why Owner Equivalent Rent is often misunderstood, and wrap with an epic discussion of the bitcoin price. This could be a pivotal episode in the history of Fed Watch, because I'm on the record that bitcoin is “in the neighborhood” of the bottom. This is in stark contrast to the mainstream uber-bearishness in the market right now. I rely heavily on charts in this episode that didn't always line up during the video. Those charts are below with a basic explanation. You can see the whole slide deck I used here. Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. Federal Reserve and Economic Numbers for US On this first chart, I point to the Fed's last two rate hikes on the S&P 500 chart. I wrote in a blog post this week: “What I'm trying to show is that the rate hikes themselves are not the Fed's primary tool. Talking about hiking rates is the primary tool, along with fostering the belief in the magic of the Fed.” Remove those arrows, and try to guess where the announcements were. Same goes for the next chart, gold. Lastly, for this section, we looked at the Bitcoin chart with QE and QT plotted. As you can see, in the era with “No QE”, from 2015 to 2019, Bitcoin experienced a 6000% bull market. This is almost the exact opposite of what one would expected. To summarize this section, Federal Reserve policy has little to do with major swings in the market. Swings come from the unknowable complex ebbs and flows of the market. The Federal Reserve only tries to smooth the edges. CPI Mayhem It's hard to write a good summary of this part of the podcast, because we were live the day prior to the data dropping. Basically in the podcast, I cover Eurozone CPI going slightly higher to 7.5% in April year-over-year (YoY), with a month-over-month rate of change dropping from a staggering 2.5% in March, to 0.6% in April. That is the story most people are missing on CPI, month to month changes rapidly slowed in April. I also covered CPI forecasts for the US on the podcast, but now, we have hard data for April. US headline CPI dropped from 8.5% in March to 8.3% in April. Month to month change was from 1.2% in March to 0.3% in April. Again, a big decline in the rate of CPI increase. Year-over-year CPI can be very confusing. This chart looks like inflation in April was measured at 8.3%, when in fact, it was measured at only 0.3% (second chart below). Year-over-year CPI Month-over-month CPI Source: FRED Next topic we cover in the podcast is rent. I very often hear total misunderstandings of the CPI measure on shelter and specifically Owner Equivalent Rent (OER). For starters, it's very hard to measure the impact on consumers of increases to housing costs in general. Most people do not move very often. We have 15 or 30 year fixed rate mortgages that are not affected at all by current home prices. Even rental leases are not renewed every month. Contracts typically last a year, sometimes more. Therefore, if a few people pay higher rents in a certain month, that does not affect the average person's shelter expenses, or the average landlord revenue. Taking current market prices for rentals or homes is a dishonest way to estimate the average cost of housing, yet not doing so is the most often quoted critique of the CPI. Caveat: I'm not saying CPI measures inflation (money printing), it measures an index of prices to maintain your standard of living. Of course, there are many layers of subjectivity in this statistic. Owner Equivalent Rent more accurately estimates changes in housing costs for the average American, smooths out volatility, and separates pure shelter costs from investment value. Bitcoin Price Analysis The rest of the episode is talking about the current bitcoin price action. I start my bullish rant by showing the hash rate chart, and talking about why it is a lagging and confirming indicator. With hash rate at ATHs and consistently growing, that means bitcoin is fairly valued at its current level. Source: Sipa The next chart shows the history of bitcoin drawdowns. Recent years have seen shorter, smaller rallies and shorter, smaller drawdowns. This chart suggests that 50% drawdowns are the new normal, instead of 85%. Source: glassnode Now, we get into some technical analysis. I concentrate on the Relative Strength Index (RSI) because it is very basic and a fundamental building block of many other indicators. Monthly RSI is at levels that typically signal cycle bottoms. Currently, the monthly is more oversold than the bottom of the corona crash in 2020. Weekly RSI is equally as oversold. It is as low as the bottom of the corona crash in 2020, and before that at the bottom of the bear market in 2018. The Fear and Greed index is also extremely low. This measure is showing “Extreme Fear” that only registers at relative bottoms, and at 10, ties for the lowest since the corona crash in 2020. Source: Fear and Greed Index In summary, my contrarian, bullish argument is; 1) bitcoin is already at historic lows and could bottom at any moment; 2) the global economy is getting worse and bitcoin is counterparty free sound money, it should behave similar to 2015 at the end of QE back then; 3) the Fed will be forced to reverse its narrative in the coming months which could relieve downward pressure on stocks; and 4) bitcoin is closely tied to the US at this point, and the US will weather the coming recession better than most other places. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE! Links Slide deck https://tinyurl.com/2d67abc3 Fed's Kashkari targets only 2% https://medium.com/@neelkashkari/policy-has-tightened-a-lot-is-it-enough-6ea24db96ed2 My latest piece on Fed rate hikes https://btcm.co/the-fed-hikes-rates-by-50-bps-the-largest-raise-in-22-years/ Eurozone CPI https://www.focus-economics.com/countries/euro-area/news/inflation/inflation-surges-to-new-record-high-in-april US CPI forecasts https://www.fxstreet.com/news/us-cpi-preview-forecasts-from-12-major-banks-the-first-decelerating-print-in-a-long-time-202205101421 Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
In this episode of the Fed Watch podcast, CK and I discuss the evolving economic situation in China and Japan, China's lockdowns and real estate developments, and Japan's monetary outlook. It's been a while since we've discussed this part of the world, so we endeavor to give a broad overview. I recommend checking out the links below for more information as well. Of course, we also cover upcoming events for the Fed with their rate decision coming on May 4th, concerns over CPI and GDP in the US, and talk about how bitcoin fits into this revolutionary era. Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. Federal Reserve and Economic Numbers for US The first few minutes of the podcast we cover economic matters occurring in the US. The Federal Reserve is coming out with their rate decision on May 4th and it is expected to be 50 bps. We do not expect any surprises in this regard at the time of writing, but we'll find out very shortly. The consensus view according to CME's FedWatch tool is 99% that we will see a 50 bps hike, to a range of 75-100 bps on the Fed Funds rate. CPI for April is also due out on the 11th, which is more likely to be a surprise than the Fed Funds decision. We think the CPI could unexpectedly drop following the weak Q1 GDP numbers from last week, showing a -1.4% GDP growth. China's Lockdowns Continue China's economic troubles started long before the recent Shanghai lockdowns, but the regressive pandemic policy will only serve to exacerbate the problems. After a brief 2 days of zero and hope that the end of lockdown was near, new omicron cases outside quarantine have once again been detected in the besieged city. These new cases have occurred in areas where lockdowns were less strict, so we could see a total reversal from a light at the end of the tunnel, to an increasing the strictness of the lockdowns. Economic numbers out of Shanghai and China are horrible. Freight traffic in Shanghai is down 81% YoY for the last 3 weeks, and freight traffic in all of China is down 15% in the same period. Many of the results of the lockdown have not yet hit consumers. Ships that left the area days before the lockdowns are only now completing their round trips. That means delays on orders, parts, and products will become much more noticeable. Far from ending, lockdowns are spreading. 46 cities in China now have some form of restrictions, totalling 340 million people and nearly 80% of their economy. Beijing itself is bracing for Shanghai style lockdowns as 2 days of city-wide testing is causing residents to stock up on food and limit daily travel to areas closer to home. They don't want to be caught unprepared if Beijing institutes rapid lockdowns like in Shanghai where some parts of the city only had a matter of hours to comply. China Economic Troubles We cannot trust CCP economic numbers, but we have some private statistics that in the same ballpark. For example, Caixin's Purchasing Managers Index (PMI) continued its contraction, down to 46 from 48 last month, which is similar to the official CCP report of 47. Anything under 50 is contraction. It is noteworthy that the decline in PMI started back in 2020, not just with the lockdowns. When forecasting the Chinese economy, the saying, “you cannot taper a Ponzi scheme” is very appropriate. As the Chinese economy slows, it also becomes much more fragile. China Real Estate Woes If you think lockdowns, shipping, and growth stats in China are bad, wait until you see the real estate sector. Sales by the 100 largest real estate developers fell 52% measured in value YoY in the period right before the lockdowns began. Of course, with the lockdowns very little real estate is being bought and sold, but after this period of depression and collapse in morale, it is unlikely that the real estate market will return anywhere near previous levels. Absolutely devastating to an economy where 70% of household wealth is tied to real estate. It gets worse. Mortgage applications and bank loans are down over 50% in the same period and in a survey of bank depositors, 54% said they plan to spend less in the future, compared to 20% who said they plan to spend more. That is horrific for an economy that is based on a gigantic credit bubble and stuck in the middle income trap. It's gotten to the point that the CCP is stealthy in easing the 3 Red Lines policy that was intended to pop the over-leveraged real estate market in the first place. They have recently told local authorities that they have more discretion in applying the Red Lines per their unique local conditions. China's main strategy for stimulus is to increase infrastructure spending. However, they are already over-built as it is. With each new crisis, infrastructure stimulus has diminishing marginal returns, and could turn negative. Bottom line for China is they are in a world of hurt. Their economy was crashing prior to the lockdowns, and the lockdowns are only spreading and becoming more strict. There is no opportunity to grow their economy in an attempt to stay solvent. They will likely be able to structure defaults (play games and kick the can) but it will, without a doubt, affect all future growth for China going forward. We have reached the end of China as the growth engine of the world economy, and should look for ways to mitigate the fall out. Japanese Yen is Crashing Many people are talking about the rise in the exchange rate of the JPY. In the last 2 months, it has dropped from 114 to the dollar, to 130. A total of 14%. The weakness is not isolated to the dollar, which has been strengthening against all other currencies lately, but also the Euro and the Yuan. Indeed, the Japanese monetary situation seems to be closely related to China's, perhaps because of disproportionate exposure to the struggling giant. A better chart to show just how bad the Yen has collapsed is the “real exchange rate” that takes into account inflation numbers. It recently broke down to 50 year lows. The lowest since 1971. There is also some excitement in the Japanese bond market. It has traditionally been extremely boring, until recently the Japanese 10-year government bond broke through the 0.25% ceiling, placed there by the fabled yield curve control (YCC). I do not think they have the actual monetary tools to keep it locked below that ceiling. In other words, YCC doesn't work. This is important because so many macro experts jump straight to the Fed doing yield curve control. If they are wrong, and tools of the modern central bank cannot cap rates, confidence in central banks could be shaken. If Japan's recent fight means anything, it looks as though YCC doesn't work as promised. I'm including a video of two Japan experts, Tohru Sasaki, Managing Director and Head of Japan Markets Research with JPMorgan Chase Bank,Tokyo and JPMorgan Securities Japan, and Jesper Koll, Expert Director at Japan-based Monex Group. They do an excellent job discussing the current situation for Japan, the dangers and opportunities it faces. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
If you enjoy this content please SHARE, LIKE, SUBSCRIBE, and REVIEW on iTunes if you listen! In this episode of the Fed Watch podcast, I play the important clips from the IMF roundtable that we talked about on FED 90. CK and I talked about them on the livestream, but were unable to play them directly for you. So, here they are with a bit of commentary to guide the episode. Our original episode goes into much more depth on each of the points raised by Jerome Powell and Christine Lagarde. In general, this event was meant to convey a specific message of unity and control by our overlord central planners. However, CK and I stress all the places where that messaging misses the market, and also how bitcoin fixes this. Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. - Source Video That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE! Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
In this episode of the Fed Watch podcast, CK and I discuss our thoughts on the “IMF debate” that took place on April 21, 2022 between Fed Chair Jerome Powell, ECB President Christine Lagarde, IMF Managing Director Kristalina Georgieva, Indonesia Finance Minister Sri Mulyani Indrawati, and Barbados Prime Minister Mia Mottley. Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. Takeaways First, I must preface my write up by saying this was not a debate at all. These financial bureaucrats were simply using this forum to get their message across to the people of the world. They all basically agreed on the major points, that being, inflation is high and we can blame Russia for much of the problem due to supply shocks. The major theme from Lagarde and Powell was, to get CPI back into their acceptable range of 2%, they must rein in demand in their respective economies, since the driving force of the rise is due to a supply shock. The medium is the message as it goes. Although this event is meant to portray a united front for the global financial system, we pick out several very important places where Powell and Lagarde disagree once you dig a little deeper. ECB and Fed on Inflation Christine Lagarde breaks down the components of the high CPI level in Europe by saying 50% of it is due to energy prices, another significant portion is due to food prices, and only a small fraction of CPI, 2.9% to be exact, is what is called “core CPI”. I know that most people in the bitcoin space don't accept the importance of core CPI and think it is a scam to hide actual inflation. But in this case, Lagarde has a point. Most of Europe's price increases are due to a self-imposed supply shock. Chair Powell talks about CPI in the US differently. He acknowledges the supply shock aspect, but his main view of the supply side of things is that the US economy is red hot and very tight. He mentions the labor market multiple times, claiming supply cannot keep up with rising demand, as opposed to Europe where supply is being cut relative to demand. CK and I react to these two viewpoints of the central bank chiefs. The Sunset of Globalization Another very important exchange from the IMF roundtable we emphasize is when the moderator asks about the decline in globalization. Powell says that it is quite possible that we see a reversal in globalization, while Lagarde “pleads Europe's case” for a mere revisiting of the terms of trade. I think this exposes a fundamental difference between these two economies, and in the podcast we take time to detail this out more in depth. Suffice it to say in this write up, the US is more self-sufficient and ultimately less concerned about the fate of globalization than Europe. Europe is beholden to the global economy for customers and for energy inputs. Bitcoin's Answer to Lagarde and Powell Being a bitcoin show, CK and I take a lot of time discussing just how bitcoin fixes these problems of the financial system that Powell and Lagarde speak about. Instead of relying on central planners (who admit to following the market anyway), a bitcoin system will take much of the complexity out of the process. We will not have the false impression that the expert class knows best and people will be unencumbered by a narrative of inadequacy and inefficiency. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE! Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
In this episode of the Fed Watch podcast, I give a big update on central bank related news from around the world. It's been several weeks since we've done a down and dirty update on material from the monetary world, so there is a lot to cover. Listen to the episode for my complete coverage. Below, I summarize Federal Reserve related headlines and their upcoming FOMC meeting, CPI and inflation expectations, Europe and the ECB's dilemma, and lastly, China's horrible economic issues. Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. Federal Reserve Calendar Financial headlines have been awash with Federal Reserve Presidents and Governors trying to outdo each other in their calls for rate hikes. The most recent is from President Bullard of the St Louis Fed, calling for a 75 bps hike and up to 3.75% on the Fed Funds rate by the end of the year! Powell is speaking in front of the Volcker Alliance meeting via pre-recorded remarks and appear live to the IMF on Thursday April 21 (I got the events mixed up in the podcast). I expect discussion of the global CPI situation in relation to different countries' monetary policy. We should get some insight into Powell's view of the current global economy in these remarks, more than the typical “the economy is expanding at a moderate pace” vanilla comments we usually get at the FOMC pressers. The much anticipated next FOMC meeting is scheduled for May 3-4. The market is saying that a 50 bps hike is likely, so anything less than that would be a dovish surprise. Up to this point, the Fed has only raised rates once by 25 bps, yet the onslaught of calls for rapid and large rate hikes has made it seem as though they have already done more. The Fed's main policy tool is forward guidance. They want the market to believe that the Fed is going to hike so much they break something. In that way, the Fed economists believe they will tampen inflation expectations leading to lower actual inflation. Therefore, all these outrageous calls for extremely high Fed Funds rate by the end of the year are meant to mold your expectations, not actual prescriptions for monetary policy. CPI, Inflation Expectations and Yield Curve The next segment of the podcast is all about inflation expectations. Below are the charts I go over with some simplified commentary. Source: FRED Above, we see the CPI year-over-year. The most recent number is 8.55%, however, in April we are entering the YoY space of the acceleration of CPI last year. April 2021's CPI jumped from 2.6% that March to 4.1%. That means we will need to see similar acceleration in prices between this March and April, which I do not think we will get. And the rest of the inflation expectation metrics below do not agree CPI will continue to worsen (for the US). Source: FRED The University of Michigan Consumer CPI expectations has effectively been capped below 5%, and as we approach recession that should move downward quickly, placating Fed economists I'd like to add. Source: FRED The 5-year Breakeven is slightly elevated from historical norms at 3.3%, but it is a long way from confirming the 8% of the CPI. Source: FRED Same with the 10-year Breakeven. It is even less elevated from historical norms, coming in at 2.9%. Far from the 8% CPI. Source: FRED One of the highest regarded inflation expectations measures is the 5-year 5-year Forward. It is still below its historical norm, coming in at 2.48%. All of these measures agree with each other in being far below the 8% CPI, added to the flat yield curve with some inversions shown below, and the shakiness of the economy, it leads me to expect an orderly return of CPI to its historical norm in the 1-3% range. Transitory has become a meme at this point, but we can see that it has only been a year of elevated CPI readings and there are signs of peak CPI already. Transitory simply meant that this was not a multi-decade trend change for inflation, it is a temporary period of higher than average levels. Every other metric besides CPI is telling us just that. Source: GuruFocus Europe and the ECB In this podcast, I also cover the deteriorating situation for Europe and the Euro. The ECB recently announced that they would be stopping asset purchases in Q3 of this year to get a handle on inflation. Europe's CPI has come in at 7.5%, still below the US. However, their economic situation is much worse than the US. Europe is in the middle of many different crises at once, an energy crisis, a debt crisis, a deglobalization crisis, perhaps a food crisis, and a demographic crisis. All of that while the ECB is easing. What happens when they try to tighten?! Nothing good. For these reasons I expect the Euro to drop significantly against the dollar and other currencies. Below you find several charts I talk about on the podcast for the audio listeners. Source: Yardeni Research EURUSD has broken its lifetime support trend line in red and is looking very bearish. The dollar index against major currencies however, is performing very well, exactly opposite to what the dollar bears would have you believe. No sign of de-dollarization, weakness or threat of losing its status anytime soon. Source: bitcoinandmarkets.com China's Growing Problems The People's Bank of China (PBOC) has lowered the Reserve Requirement Ratio (RRR) once again, effective April 25th. In this segment, I read through an article by FXStreet and make commentary along the way. Recent developments in China only strengthen the case I have been making for years, that China is a paper tiger built on credit that is going to collapse in a scary fashion. The Chinese have not been able to slow the real estate collapse or the spread of Omicron. They disastrously resorted again to lockdown in Shanghai and other cities, that will only serve to cripple their economy more. They cannot drive demand for loans or for lending in this environment, hence the multiple attempts to spur lending by lowering RRR. What the PBOC will most likely turn to next is mandating loans be made. They are desperate to increase credit and keep the bubble from collapsing fully. This is reminiscent of Japan in the 90s, when they mandated loans to be made in a similar attempt to stimulate the economy. It didn't work for Japan and it won't work for China. At best China is looking at a repeat of the lost decades in Japan. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE! Links Bullard's recent comments https://archive.ph/rafqY China lowers RRR https://www.fxstreet.com/news/china-pboc-cut-the-rrr-by-25-bps-uob-202204191408 Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
In this episode of the Fed Watch podcast, CK and I had the privilege to chat with Matthew Pines from the Bitcoin Policy Institute. He recently wrote the fantastic and comprehensive Bitcoin essay for policymakers and the general public, Bitcoin and US National Security: An Assessment of Bitcoin as a Strategic Opportunity for the United States. Our conversation focused on a summary of the essay, digging deeper into quality vs quantity adoption, stablecoins, ways nations view CBDCs differently, and we end with talking about the Federal Reserve and their predicament right now over rate hikes with an inverted yield curve. Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. Report Summary We started out by discussing who was Matt's target audience and did that affect the structure of the paper. I was curious because it is very comprehensive, covering bitcoin's technical mechanics, recent monetary history, and then ways bitcoin could be used to the strategic advantage of the United States. Matthew Pines responded that he anchored the structure of the paper around Biden's recent executive order. As people are taking a closer look at these topics, and as they are writing reports themselves in response to that order, Matt wanted to give them an analytical primer and a summary of how bitcoin can address the concerns specifically of the administration about national security. Bitcoin Adoption Next, we get into some specifics from the report. He mentions that 16% of US adults own bitcoin/cryptocurrency. However, this is an overall figure and doesn't speak to the quality of that adoption. For instance, it could be a lot of gamblers buying scam tokens on Coinbase. I wondered if he had insight on adoption by the politically powerful, i.e. business leaders, government officials, influencers, millionaires and billionaires. In essence, I asked Matt to speculate based on his unique knowledge set. Matt has a great line, “the power of selective high-value orange pilling can't be overstated.” He says that is kind of what we all want, but it can turn out badly. He also warns against concentrating too much on politicians. In other words, let bitcoin's incentives do the work. Staying on the policy front for one more question, we ask if adoption is closing the window for possible devastatingly bad policy decisions. If 16% of the public own bitcoin now, how much will that be in 1 or 2 years? If 50% of people own bitcoin, and most of the politically influential class own bitcoin, does that make it nearly impossible to get bad policy? Once again, asking him to speculate on this question. Matt's answer is very constructive. He points out that the window of policy is moving in a positive direction, citing Senator Lummis' recent work. He makes the distinction between the legislative and executive branches and says each have a different relationship to policy. The lawmakers are obvious, but an average employee of the executive branch could perpetuate misunderstanding because they are in a rush to write a brief or complete a report. Stablecoins and Europe Now, we get into the CBDC discussion, focusing on Europe first. Matt claims that the European Union is inherently threatened by USD stablecoins and Bitcoin, because it is the monetary union that underpins the political union. Therefore, it is naturally more drawn to CBDC solutions. He also agrees that the Federal Reserve is unlike the European Central Bank in terms of its pursuit of a CBDC. Basically, the Fed has a great grasp on the issues and forces at play in a CBDC. They are much more friendly to USD stablecoins than a CBDC already, even though they might not know all the strategic advantages that Matthew has outlined in his report. One of Pines' great points from his report, that he brings up at this point, is the ability for the Fed to regulate USD stablecoins and force them to be buyers of US Treasury Securities. This could add more demand for Treasuries and even give the Fed a new policy tool. Federal Reserve is Trapped In the last part of the interview, we have time to quickly cover the Federal Reserve's predicament. They have made a massive move to hawkishness, and after only one tiny hike, the yield curve is already inverting signaling recession. I asked Matt what he thought of this development, and what his take on the Fed's options are at this point. Matt goes on the expertly describe the situation in which the Fed finds itself as an “irreducibly complex system”. The Fed has to poke this complex system increasingly harder each time and wait to see what breaks. Matt says if we want to see where we are headed we should look to Japan, because they are 5 -10 years ahead of the rest of the world in these monetary experiments like QE and yield curve control. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
In this episode of the Fed Watch podcast, I cover topics we were unable to cover on the weekly livestream. I go back over the importance of the Sarah Bloom Raskin withdrawal, what the Fed is thinking by signaling hawkish policy so aggressively, and do a deep dive into the emerging food crisis that could result in a continental scale famine. Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. Bye Bye Raskin I mentioned Sarah Bloom Raskin on the previous episode but here I go back over that thread and try to make it crystal clear what I think her withdrawal of her nomination tells us about the real power politics at play. Raskin is a progressive globalist who believed in using the central bank to further a Davos agenda. It didn't work. I think it makes the distinction between Team Fed, including Powell and Wall St. versus Davos globalists (Dems, Neocons, and European project people) perfectly clear. Federal Reserve messaging Next, I introduce the concept of the Fed credibly promising to be irresponsible, this time on the hawkish side. In 1998, Nobel Prize winning economist Paul Krugman, said of the Bank of Japan's inability to stimulate out of a stagnant economy what they needed to “credibly promise to be irresponsible”; go big or go home. The Federal Reserve is now attempting to be irresponsible in the reverse direction. The Fed will come right out and say that their policy works through inflation expectations. Typically, they talk about how much QE they will do, in an attempt raise expectations of inflation, that makes people act as if inflation were higher, manifesting that inflation in the future. Right now, it seems as if they are trying the reverse. Ask yourself, how would the Fed lower inflation expectations? They have to act hawkish, and talk about raising interest rates and QT. That is what we are seeing now. Everyone sees the yield curve inversions happening. They know the world is sliding into war and deglobalization, two things that make people expect higher prices in the future. They have to attack those stubborn inflation expectations with very hawkish rhetoric in order to tame those expectations back to “normal”. Yield Curve Inversions In this section, I walk through the images below to explain the yield curve, the inversions right now, and what they mean. I'm not sure if there will be a video version of this episode on Bitcoin Magazine's YT channel. Emerging Food Crisis In the last section of the podcast, read through an article with the headline: War in Ukraine sparks concerns over worldwide food shortages from France 24. In it they point to the wheat shortage from the war in Ukraine that is already causing food shortages in North Africa. The UN Food and Agriculture Organization (FAO) estimates that an additional 8-13 million people worldwide face undernourishment if food exports from Ukraine and Russia are stopped permanently. The article is good at summarizing one aspect of the looming food crisis, a shortage of wheat. What they do not even mention is the shortage of fertilizer. Both of these things together threaten a continental scale famine where that number of 8-13 million new people facing hunger is probably understated by 10x. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
In this episode of the Fed Watch podcast, CK and I are joined by Benjamin Dicktor. He's a trucker and bitcoiner who has been intimately involved in the Canadian peaceful protest earlier this year. We got an update on the donation status, the individuals' legal status, and what bitcoin can do better to face similar attacks in the future. After that we roll into a Fed Watch update, talking about the Fed rate hike and increasingly aggressive and hawkish tone from Powell. Lastly, we cover the Russian sanctions from a different angle, but pointing out the growing clash between Wall Street and the Davos crowd. We ran out of time before getting to all the Fed Watch specific news, so stay tuned for a mid-week episode! Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. Canadian Trucker Debrief After getting an update on the situation in Canada, the first question we ask Benjamin is how all of these financial attacks have affected Canadians' trust in the financial system in general. His answer is very practical. He points out that the Bank of Canada has printed more as a percentage of GDP than the Federal Reserve, but from his point of view is that the vast majority of the public simply is ignorant of the monetary system and what is needed is more education. As people get more educated that is all the more bullish for bitcoin. Dichtor then lays out the mechanics behind these financial attacks. They happened on three levels, the municipal, provincial and federal. On the provincial level, the attorney generals went after the banks to freeze all proceeds of the fundraisers as illegal in some way. Then they went after people's whole finances by freezing banking services. Benjamin says that it wasn't enough to freeze the specific donations, they de-banked people in an attempt to starve them out. I follow this up with a question about what can the bitcoin space, with its open source ethos and entrepreneurial spirit do or build that would mitigate these types of attacks in the future. His answer is two fold, one is narrative and the other is integration. For the narrative, Benjamin thinks it's important to market bitcoin uses instead of its technical capabilities. “People don't know how their car works, but they still drive it.” Marketing bitcoin as a hedge against overzealous authorities as a way to protect your rights is more important than explaining why and how it's better money. On the integration side, Benjamin leans toward the Bitcoin Beach model down in El Salvador. Getting fuller integration by packaging it with business opportunity. Fed Hikes Rates, What Next? Since this is a central bank oriented show, we next make a hard pivot into Fed news. First and foremost on that agenda is the Fed's rate hike. Last week, the Fed raised its target Fed Funds Rate up from 0-0.25% to 0.25-0.50%, in the first hike since 2018. Along with the hike came more aggressively hawkish language about further hikes, even a 50 bps hike soon, and beginning Quantitative Tightening as early as May. I point out that it is the rhetoric that the Fed is using to lower inflation expectations. That is the route by which the Fed themselves claim their policies to work, through the publics expectations. If people expect high inflation, they will act as if there is high inflation, and it will manifest in that way. A self-fulfilling prophecy. What the Fed is doing now is the opposite, they want people to expect an irresponsibly hawkish Fed to crater inflation expectations, so people act as if inflation is coming down, to manifest inflation in that direction. It remains to be seen if the Fed will actually be able to follow through on this roadmap. The Federal Reserve is explicitly a follower of the market. They proudly say they are “data dependent”, meaning the market moves and creates data, which the Fed follows. Therefore, the Fed will raise rates as long as the market cooperates and prices in higher a Fed Funds Rate. However, if the yield curve only flattens, and the long end starts coming down and the Fed will be forced to stop. I think that will happen around the middle of the year some time. Maybe after a couple more rate hikes. I'll go deeper into the yield curve on a mid-week episode for the viewers and listeners. Stay tuned for that. The Clash Between Wall Street and Progressive Globalists The next topic might be controversial. I lay out the sanctions put on Russian banks and how it surprised the Fed. Powell came out shortly after the SWIFT sanctions and said he was not consulted about the ban. He likely would have disapproved of it because his lane is financial stability. Banks are interdependent, and banks exposed to Russian debt in Europe or Asia, will spread contagion of these sanctions through the whole financial system. These sanctions therefore, risk causing a global financial crisis. I try to expand on the thread that Wall Street and the Biden regime (as well as other Davos heavyweights) are at odds here. Those are the two 1000 lb gorillas in the room, capitalist Wall Street and authoritarian globalists. The Fed, banks, and Wall Street are generally neutral to bitcoin and will add it to reserves if need be. However, the globalist Davos elites despise bitcoin and will fight it by going with a CBDC. If that is true, the Fed becomes an ally to bitcoiners in the story of adoption. You'll have to listen to get the fuller theory. Conclusions We end the show with CK and Benjamin's reactions to my unique theory and closing remarks. I don't think I have either of them convinced. Benjamin has a great view which we share here at Fed Watch, about the rise of localism and regionalism in the future. We should strive to form strong self-sufficient social circles to minimize the attack vectors open to the State. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE! Written by Ansel Lindner Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
In this episode of Bitcoin Magazine's Fed Watch podcast, CK and I welcome a special guest, Luke Gromen. Luke is founder and President of Forest for the Trees (FFTT) LLC, where he provides clients with macro insights and investible analysis of the global financial system. In this wide ranging conversation we dive deeply into Russia, gold, oil, the shadow banking system, bonds, you name it, we probably talked about it on the episode. Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what's happening now. Thanks for listening and watching. If you like the content please share! Thank you. Common Misperceptions of the Market We start off the show (after an awkward intro by me that Christian rescues) with Gromen giving a summary of his model for viewing the current economic landscape. He points to two widely held misconceptions that have created the situation in which we find ourselves: 1) The value of the petrodollar is the dollar, instead of the petro; and 2) thinking debt doesn't matter. These are things people believe, but are in reality the opposite. I try to clarify the origins of these misconceptions, but do so badly. I believe that those misconceptions are due to the system in which they arose. In the long history of the post-WWII era, however, they were not misconceptions. The value was in the dollar of the petrodollar and US debt didn't matter. They only became wrong as this era is ending. So, what I was wondering was did these misconceptions cause the end of the era or did the end of the era cause the misconceptions to become wrong. Achilles Heel of the Dollar System In this part of the podcast, Luke dives deeper into the tweet that prompted this interview, about Russia perhaps weaponizing gold, and as a response, the US weaponizing bitcoin. There is a fragile gold market out there of unallocated gold trading, centered on the LBMA and COMEX. Luke's contention is that if Russia wanted to, they could simply declare that they will sell oil for gold and that could crash these markets and instantly transform gold's market cap to a size able to handle the world's financial clearing. According to Luke's interesting thought experiment, this move toward a petro-gold standard would lead to fewer US securities being held in national reserves around the world and lead to a multi-currency trade network. Dollar is Rising, Not Falling One of the things we could expect, if the theory about a multi-currency future was correct, is for the dollar index (DXY) to fall relative to other currencies. However, over the last couple of weeks, the dollar has exploded higher, reaching 99.4, the highest since May 2020. It is a level of strength the dollar has only achieved for a few months in the last 5 years, mainly during that brief period in early 2020. What are the Practical Next Steps for the Financial Reset? It has been our position on Fed Watch for almost a year, that the Corona Financial Crisis will likely be followed by a second European debt crisis, just like what followed the Great Financial Crisis (GFC). It is predictable because of the way money, reserves and credit flow like a tide around the world. We've also said that Europe is the sick man of the world financially. It will be a wonder if the Euro and the EU survive the coming debt crisis. Now it seems they also have to survive a physical threat to their carefully crafted reasons for existence. Anyway, it is our position that the Euro will face existential issues long before the dollar does. We asked Luke what his insight is into that dynamic. He has a very nuanced process of what the next steps are and does an excellent job detailing how the contagion in energy and commodities will spread to European banks and then to American banks. As the contagion spreads to stocks, which drive marginal spending and marginal tax receipts in the US, Luke says, we will ultimately see it spread to US sovereign debt. As tax receipts drop and the US faces a government funding crisis, the US will turn to the Federal Reserve and insist they start QE again, because it is their only practical choice. Luke says this manifests itself with a return to central bank easing with still very high inflation. What if Oil Falls from Here? Next, we cover the possibility (which I think is the most likely to happen), that Ukraine is wrapped up much sooner than everyone thinks and doesn't result in a quagmire. In that case, energy would start flowing again from Russia but also the market has overreacted and brought more US, Venezuelan, Iranian and perhaps even OPEC production online. That could quickly flip the crisis from an oil shortage to an oil glut. We must remember to place this price spike in the context of 2 years ago, when oil futures went NEGATIVE. Just 23 months later, now we have multi-decade highs. What if it drops back to $50/bbl or lower very rapidly? I point out the chart looks similar to 2008 and a parabolic blow off top, not like a sustained regime change to more expensive oil. Luke counters saying that this event is bigger than that. What we've seen is a “marked-to-market of relative global power levels”. This matches well with Luke's position that cutting off Russia from SWIFT and seizing their foreign held reserves was a foundational shift in the global financial system. Luke eloquently lays out the theme that the world is witnessing the end of, not only the post-WWII US hegemony, but also the dollar system as we know it. Here, I ask him an interesting question, are bond prices more correct or is the oil price more correct? Both markets are extremely deep and sophisticated, but oil appears to be more in an unsustainable place on the chart, very similar to 2008, while bonds are remaining in their long term trend. I ask this because of the old adage that the bond market is always right. Luke responds that he thinks oil is more correct, though he does caveat that there could be a short term correction due to a disappearance of the war premium we have right now. However, he brings it back to a fundamental aspect of his thesis, that the US sovereign debt is the difference this time around. The dollar is not in a position to continue easing like Japan did when they had a similar debt-to-GDP ratio, because the US dollar is the global reserve currency. Globalism to Regionalism Christian brings us back to reality and the realm of bitcoin to wrap up the show. He asks Luke about trust in a future system and how that might manifest as a more local and regional world instead of one that is so global, with all the vulnerabilities associated with globalism. We briefly discuss the shrinking of supply chains and the rise of more self-sufficient and regional trusted trade networks. Luke thinks this is a great scenario for bitcoin to but ultimately thinks gold will shine as the asset most trusted upon which to build the new system. Conclusions Surprisingly, we didn't talk about inflation. With the utter catastrophe that the global supply chains are, and the massive amount of “printing” the Fed has done, it is shocking that CPI is only at 7% year-on-year? I think there is a huge oversight in much of the dedollarization narrative that we didn't even cover, mainly that the Fed doesn't print money. Hopefully, we can get Luke back on the show to discuss that one. This episode was full of predictions and thought experiments. It was a fun conversation and a pleasure to meet Luke. We were trying to apply some rational assumptions to practical next steps in the global financial system. It was a little light on bitcoin, but before we can understand how bitcoin will become global money, we must understand the gravity of the recent events, which is what this episode was all about. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
In this episode of Bitcoin Magazine's Fed Watch podcast, CK and I continue our monthly series with Dylan LeClair, author of the Deep Dive report. We had the opportunity to go over the metrics in the bitcoin market that he is watching and is an expert in. They have a free version of the report that comes out daily, and an exclusive paid version monthly and yearly. Follow along with his slide deck here. Fed Watch is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening is what we are about here at Fed Watch. Bitcoin's Correlation to Stocks and VIX The first topic we cover in this episode and the first topic from the January issue of the Deep Dive is bitcoin's correlation to stocks and the volatility measure, the VIX. Dylan describes why this correlation has appeared over the last year and what it can tell us about the health of the bitcoin market. Grayscale GBTC and Bitcoin Price One of the bigger topics we talk about with Dylan is Grayscale and the effect this market behemoth has on the bitcoin price. LeClair walked us through this product and its effect on the market. We talked about major institutions, AKA market makers, that could have been caught on the wrong side of this trade, as the large price premium that was facilitating “risk free” arbitrage suddenly changed to a discount. Bitcoin On-Chain Analysis of Liquid Circulating Supply As the name suggests, the Deep Dive is an in-depth report, going into very specific metrics about the bitcoin network. One of those is, what I interpret as, the liquidity of circulating supply and its correlation to price. As you can see in the chart above, the shaped areas represent coins that have moved within a 3-month period. It is related to velocity, but where velocity is concerned with the number of transactions, liquidity of circulating supply is a percent of the total supply that has moved at least once. The percentage of supply that becomes liquid begins to ramp up as the price approaches peaks, and resets lower as price consolidates. The pattern is emerging of lower top-level circulating supply and lower lows. That makes sense if we think in terms of purchasing power at the tops and bottoms. In other words, each peak is a lower number of satoshis but a higher level of purchasing power, since the price is significantly higher. And vice versa, the lows are a lower number of satoshis but a higher level of purchasing power. If bitcoin is going to continue appreciating in value, we would expect that exact pattern to continue. As new entrants come into the market they will find fewer satoshis to buy, even in times of FOMO. Stablecoins as Collateral and Holders of Sovereign Debt The next part of our discussion blew me away. Dylan brought the rise of stablecoins like Tether that are growing in use as collateral for leveraged trades in bitcoin. In the past, people tended to use their bitcoin as collateral, which acted to accentuate price moves. With stablecoins taking more of that role, it should lead to much less volatility in the bitcoin price. Dylan also mentioned the fact that Tether and other stablecoins provide a small much noticeable buy pressure for US government securities. They have these very large reserves of dollars that they need to put into safe assets. What's better for this than US Treasuries? I make a connection that the typical list of foreign holders of US government debt should be expanded to include, not just foreign central banks, but perhaps in the future, companies like Tether. How crazy would it be to see Tether with just as many US Treasuries as countries like Germany, China or Japan? This would instantly make Tether and other stablecoins massive geopolitical players. Federal Reserve and Rate Hikes On the day of recording this livestream, March 1, 2022, bond markets were swinging wildly. So, we examined just what was happening and gave our listeners some expectations for the rest of the year. SWIFT Alternatives, Gold, and Russia We end the episode with some talk about the situation in Russia and Ukraine, as regards the sanctions of the SWIFT network. The only viable alternative on the horizon is Bitcoin. The much discussed Russia/China alternative is in its infancy and still uses banks as nodes which are vulnerable to sanctions. Gold is not an option for quick international settlement, and will likely suffer price declines in this situation because Russia needs to access dollars, and can sell gold to do that. The Russia/China interbank alternative is not an alternative banking or financial system, it is just a messaging protocol. It is in the same boat as a Central Bank Digital Currency (CBDC), it's new but not revolutionary. It still has all the points of failure like corrupt institutions and rails of the past. Bitcoin, on the other hand, is fundamentally a new system, with a new monetary unit. It is the only thing at this time that fits the bill as an alternative to SWIFT and the decrepit fiat system. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
In this episode of Bitcoin Magazine's Fed Watch podcast, CK and I had the opportunity to sit down and have an epic conversation with Log Scale of twitter, and host of The Bitcoin Spot series of Twitter Spaces, and new YouTube channel. This episode is a big white pill for those down about the recent price dip and who think of the US as an evil empire. We get into many aspects of institutional client money coming into bitcoin this year, and why the US is likely to be one of the most friendly bitcoin jurisdictions in the future. Fed Watch is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening is what we are about here at Fed Watch. A Valuation Model for Bitocin Log Scale had a very interesting Twitter thread several weeks ago. The first part of this episode is him laying out the arguments he made there. Corporate treasuries diversifying into bitcoin has been a major source of optimism in bitcoin over the last year or two, but Log says they are only 2% of all investable wealth in the world. Signs are starting to shift toward the other $500 trillion are looking at bitcoin, too. You can find estimates for total investable wealth from several sources. Log cites Credit Suisse in this episode and McKinsey in his tweet thread. Both have a multi-hundred trillion dollar estimate. Of course, every dollar that is used to buy bitcoin is not going to have a 1:1 effect on the bitcoin market cap. The multiplier is not a steady variable, the Bank of America has estimated it at 107x, but in his conservative valuation model, Log uses 3x. Now, what his model needs is an estimate for the amount of money that will come into bitcoin. For this he draws from the very well-respected Ric Edelman's 2022 predictions for bitcoin. He is “Edelman, one of the most prominent thought leaders in the investment advisory field and founder of Edelman Financial Engines.” Nearly all of his 2021 predictions proved correct, and this year he has some big ones. He says that by the end of the year, 1) 1/3rd of Americans will own bitcoin, and 2) financial advisors will be recommending between 3-5% allocation to bitcoin. With those numbers, Log's valuation model is just a matter of plugging in the numbers, yielding a result that the bitcoin market cap could increase by $11 trillion this year. Gensler and Why the US will be Friendly to Bitcoin The next part of the podcast might be controversial. We spend some time discussing Gary Gensler and possible reasons behind his appointment as Chairman of the SEC at such a pivotal time, with such a clear pro-bitcoin bias. Most people think that the US government will fight bitcoin adoption, but Log Scale explains why they aren't special, bitcoin's incentives work on regulators the exact same way as everyone else. As an aside, we see that blatantly in the Ukraine and Russia at the moment, with friendly bitcoin policies coming about due to the rich and powerful there owning a lot of bitcoin. If the US government is worried about losing its supposed currency advantage, it's easy enough for them to buy bitcoin and back the dollar. If the choice is between losing global dominance of the dollar or buying bitcoin, that is an easy choice. There is no downside for the US government. The other option, fight it and impose sanctions, on top of being politically unpopular with the 1/3rd of Americans that will own bitcoin, it risks losing. Back to Gensler. Log Scale tells us that Gensler is a big admirer of Satoshi and taught a course on bitcoin/blockchain at MIT prior to becoming Chairman of the SEC. The one outstanding qualification Gensler had over other options for the SEC was that he is an expert and the lover of bitcoin. Q&A about Powell and Fed Policy At the end of the show, Log Scale and CK had to leave, but there was still a few minutes to fill on the Livestream segment, before the next guest came on. This gave me a great opportunity to answer some questions from the Livestream host Q about Powell, their likely policy path this year, and other topics around central banking. It is a recurring theme of questions I receive that people think the Fed is going to crash the market by raising interest rates. However, the powerful insight is that the markets are in control, not the Fed. The Fed's job is to predict where the market will be in 6-12 months, sometimes 24 months, and position a narrative for their monetary policy to be ahead of that move. The most they can do is try to mold market sentiment. If their monetary tools actually worked as they are believed to, through concrete quantitative effects, they wouldn't need such tailored and precise language, and there wouldn't be so much confusion on the path of inflation or the economy. The Fed could just adjust the dials to get the economy they wanted. That's not the case. Listen to the end to get more truth bombs on what's coming in 2022 from the Fed. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
In this episode of Bitcoin Magazine's Fed Watch, CK and I catch up on the Freedom Convoy donation situation, dissect Jon Stewart's wake up call with James Hoenig, former Fed President, Fed signaling around CPI and the emergency FOMC meeting, and lastly the scandal that is brewing around Sarah Bloom Raskin's nomination being delayed. This is a longer episode where we just let the conversation go where it wants to. Fed Watch is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening, is what we are about here at Fed Watch. Crowdfunding with Bitcoin The donation drama around GoFundMe and GiveSendGo has now spilled over to the Bitcoin fundraiser on Tallycoin. As a quick update, GiveSendGo refused to comply with the Canadian court order to freeze the Freedom Convoy funds, however, when they distributed some of the funds to Canadian bank accounts, the funds to the peaceful protestors were frozen on the bank's side. This highlights the multiple layers of censorship that the legacy financial system has, and the need for bitcoin. The honkhonkhodl fundraiser is also running into a few hiccups due to the illegal invocation of the Emergency Act in Canada. The fundraiser had to be stopped because the public faces of the campaign could become targets of the out of control Gestapo government up there. Overall, the Tallycoin fundraiser was a great success and the community learned some very important lessons. The keys to the bitcoin have now been distributed and sending of the funds to the protestors has started. There was also a hack of the GiveSendGo campaign which doxxed 90,000 donors, the amounts they donated, and other personal information. It showed that roughly 45% of the funds came from Americans, not Canadians. This opened the door for dishonest rhetoric from the government calling it “foreign funding” of an insurrection, instead of just Americans and Canadians coming together for freedom. This rhetoric fits into the mold of the “Russia hoax” and is a sign of a government that has totally abandoned its duty to serve the people. Federal Reserve tries to explain debt-based money On the show, we watch a clip of former Kansas City Fed President, James Hoenig, trying to explain money printing to Jon Stewart. It's absolutely hilarious to watch Stewart being red pilled on the financial system in real time. I believe that Hoenig is attempting to explain it all in good faith, but makes a couple mistakes. 1) he says the Fed is the only source of money printing. That is empirically false and misleading, because commercial banks are the source of money printing when they make loans. The Fed only prints reserves, an illiquid asset. 2) Hoenig says that bitcoin is faith-based like the dollar. Instead, bitcoin is not faith-based debt like the dollar, it is a real form of commodity-backed money. The part Stewart cannot wrap his head around is, if the Fed prints money, why can't they print money to pay off all our government debt? A very important question. Hoenig tries to explain that all they can do is an asset swap (QE), where they trade an asset (the debt they are trying to get rid of) for a reserve (an illiquid replacement asset, not real money). It is confusing because Hoenig says they print money in one breath and then says they don't print money, they print debt in the next. CPI Panic The January CPI print sent shockwaves through the markets this week. Immediately, the market began pricing in an inter-meeting rate hike, and a 50 bps hike at the March FOMC meeting. The Fed played along, calling an emergency meeting that met on Monday, Feb 14th, to discuss the situation. By that time however, the market had settled down and was no longer pricing in the inter-meeting hike. There is general agreement amongst FOMC members that a March rate hike is appropriate, but that is about all they agree on. They are in the same boat as everyone else, watching the market and waiting. Sarah Bloom Raskin Delay My latest op-ed on Raskin was well-timed. We discuss the growing scandal that Senator Lummis bravely started in the Senate Banking Committee hearing last week, and which now has led to, at least, a delay in Raskin's appointment. From my article: The real fireworks started at the 1:55:50 mark, when Senator Cynthia Lummis of Wyoming, a friend of Bitcoin, took the mic and absolutely grilled Raskin about Federal Reserve master account access, and her possible indecent connection to the one and only fintech company with a master account, which received that master account while Raskin was on its board in 2018. Lummis laid out compelling circumstantial evidence that Raskin served at the Fed from 2010 to 2014, then the Treasury from 2014 to 2017. After her time in government, she joined the board of Reserve Trust in Colorado, which was denied a master account in 2017, but then was granted a master account after Raskin made a call to the St. Louis Federal Reserve on its behalf. Again, it's important to note that it is the only non-bank to be given that honor, even as dozens in Lummis' home state of Wyoming have failed to make headway in the last two-and-a-half years. A year after the master account was secured, Raskin left the board, bought out for $1.5 million. Mic drop. Sarah Bloom Raskin is a globalist pick who promises to bring a progressive political bent to the Federal Reserve. She is friends with bitcoin enemy Senator Elizabeth Warren and is the wife of highly partisan Jamie Raskin. The delay of her appointment is a silent battle in the informal fight between the globalist progressive Davos crowd and the nationalist-oriented crowd, which Powell represents. That's my take on things at least. That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
If you enjoy this content please SUBSCRIBE and REVIEW on iTunes, and SHARE! In this episode of Bitcoin Magazine's Fed Watch, we get an update on the European Central Bank (ECB), use a candy to make the Bank of Japan interesting, and we talk about recent troubles with BlockFi and bitcoin lending. Fed Watch is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening, that's where this show lives. Inflation in Europe European inflation numbers for January 2022 came out this week, and set another Euro-era record at 5.1%, up from 5.0% in December. This consumer price increase of 5.1% must be in context of the worst energy and supply chain crisis in two generations. The price of natural gas and electricity have exploded in Europe, which has a trickle down effect on most prices in the economy. These price increases are not a direct side-effect of money printing, they are a direct effect of the pandemic response of nearly shutting down the global economy for two years. We attempted to play the below 2 minute clip of President Lagarde speaking about inflation, but the audio on the livestream wasn't set up properly. You can also find the full length press conference here. https://youtu.be/f8MQ_Cn2Uck Comparing the Politics of the ECB and Federal Reserve I spent some time on the podcast comparing the highly produced press conference style of the ECB to that of the Federal Reserve. LaGarde appears to have a checklist of special interest groups that she must mention and placate. It strikes me as a political process, where Jerome Powell strikes me as much more concerned about the economics. It is a central part of the Federal Reserve to stay fiercely independent from politics, as seen in the Raskin interview in front of the Senate Banking Committee. Her progressive views were on trial, and they wanted to make sure she wouldn't be bringing her politics to a job at the Fed. The European Central Bank, on the other hand, conflates politics as part of their mandate. European Policy Guidance for 2022 In the press conference, LaGarde said they'd let their QE programs run their course and finish up in late-March to early-April. That was not surprising. However, what did surprise the market was the fact that LaGarde would not repeat her statement from December's press conference where she said the ECB would not raise rates in 2022. The reason the market didn't like this seemingly small detail is because it makes the ECB appear capricious. Compared to Powell, where he made his pivot and doubled down on it later, LaGarde does not give the sense of being confident in her opinions or evaluation of the economy. I attribute this to the overly politicized ECB, by the way. They are unable to focus on a clear mandate, because their policy is being pulled in political directions. European Credit Spreads and Redenomination Risk This is where I tie all these things back to bitcoin. Credit spreads in Europe have been spiking recently. France's 5-year Credit Default Swap (CDS) is priced at 20, Italy at 103, Spain 40, and Greece at 127. As the spread between these CDS contracts widens, investors face an increasing implied redenomination risk (possibility of an exit from the Euro). Over the last couple of weeks, as these CDS spreads have increased, so has the price of bitcoin. Greg Foss talked about this when he came on Fed Watch a couple of months ago. As sound money without counterparty risk, Bitcoin should correlate with CDS prices and the redenomination risk in Europe. I'll be watching these prices closely for any correlation in coming months, but it is a good sign for bitcoin that it performed positively as stresses in Europe have increased this week. Japan The Bank of Japan has been the most consistent over the last few decades. They have done the most Quantitative Easing (QE) by far of any central bank, yet they struggle with low growth, low inflation, low interest rates (these things always go together by the way, as I wrote here). After three decades of ultra-low inflation, I read a story about Umaibo, a snack item in Japan, that has been selling for 10 yen a piece for 40 years, but is raising their price now to 12 yen. Gasp, the horror. Some people think this development, along with the recent creeping up of the 10-year Japanese Government Bond rate to 21 bps is a sign that inflation might be coming to Japan, too. I highly doubt it. The amount of QE the BOJ has done over the last 20 years puts the Federal Reserve to shame, and is not stimulus. Long term QE actually hangs over the economy as a wet blanket on any growth. Just compare the three major central banks, the Fed, the ECB and the BOJ. Their CPI inflation rates are in opposite order to the ranking of the central bank balance sheet as a percent of GDP. The more QE a central bank does, the lower the CPI inflation rate. Bitcoin's Credit Market and BlockFi We end the show this week by talking about the nascent bitcoin credit market. A central player in this ecosystem is BlockFi, and they have been at the center of a growing scandal in bitcoin. A post on the company's own subreddit went viral. In the post, an individual relates that BlockFi called in his loan due to the bitcoins he used having a history of mixing. It is a very bad sign for many BlockFi customers, who probably mix their coins as part of a routine in good financial hygiene. Another development this week is the raising of minimum withdrawal limits from BlockFi. Again, via the company's subreddit: “At this time we are only supporting wire withdrawals of $50,000 USD or more for US-based clients, or $5,000 USD for international. Since we don't support ACH withdrawals for international clients at this time, I might recommend withdrawing to a different platform/exchange that can. This is specifically why we offer 1 stablecoin (plus BTC or LTC) withdrawal per month.” - u/Brandon_BlockFi, Community Manager Lastly, BlockFi has downgraded their interest terms to very low levels. The new Tier 1 (
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