Money/inflation, the Fed, Banking, Monetary Policy, Dollar, BTC, crypto, Gold

[Crafty_Dog]

https://www.zerohedge.com/markets/and-just-inflation-about-disappear?utm_source=&utm_medium=email&utm_campaign=338

[ccp]

https://www.cnbc.com/2021/12/10/bitcoin-network-hashrate-hits-all-time-high-after-china-crypto-ban.html

[Crafty_Dog]

https://news.bitcoin.com/cftc-commissioner-opposes-regulation-by-enforcement-crypto-needs-clearer-rules/?fbclid=IwAR3NozlAL99A7tD8NcP4QvgvGcSyEg4KyOl_3t0y_jDtdoRtY3lbni6dkMQ

[Crafty_Dog]

second

https://www.theepochtimes.com/shone-anstey-john-mac-ghlionn-why-the-us-and-china-are-taking-opposite-approaches-to-bitcoin_4151040.html?utm_source=newsnoe&utm_medium=email&utm_campaign=breaking-2021-12-12-2&est=tlzk5Y%2F4KcveEPmRTb%2F1IPPkRTwPnWiu5qX3Y8%2FPxiGCNl%2FXN5jWcaZf630la%2FsyyN%2B0

[Crafty_Dog]

The Fed Is the Main Inflation Culprit
The central bank has enabled price increases that may soon pose a risk to financial stability.
By Kevin Warsh
Dec. 12, 2021 1:04 pm ET

If price stability is squandered, financial stability is put at risk. If financial stability is lost, the economy is imperiled and the social contract is threatened.

During the past several quarters, U.S. inflation has surged—now running about triple the Federal Reserve’s 2% target. The surge in prices is unlikely to reverse on its own. The longer that prices are unstable, the greater the challenge to the conduct of macroeconomic policy. The last thing the country needs is its third major economic upheaval in a decade and a half.

The consequences of inflation—and the attendant risks—have long been understood. In 1898 economist Knut Wicksell explained: “Changes in the general level of prices have always excited great interest. Obscure in origin, they exert a profound and far-reaching influence on the whole economic and social life of a country.”



Inflation is the sincerest form of fakery: A surge in the cost of living that robs hardworking Americans of the fruits of their wage gains. An incomparable asset boom predicated on perpetually low interest rates. Alchemy for an overly indebted nation. Vulnerability that can lead to miscalculation by a fierce geopolitical rival. And despair by the body politic, whose common sense is at odds with the anxious conformity of those in power.


Inflation is a choice. It’s a choice for which the Fed is chiefly responsible. The risk of an inflationary spiral arises when policy makers first dismiss the problem and then cast blame elsewhere. Inflation becomes embedded in the price-formation process when the central bank acts belatedly or with insufficient conviction. To date, the Fed has acted as an enabler.

The sure sign of a problem: when a president gives voice to the scourge of inflation—and takes executive action—well before the central bank acknowledges the severity of the situation.

“Supply-chain bottlenecks” is the popularized rationalization for the surge in prices. But the supply-chain story sheds more shade than light. Consumer prices are higher because prices are rising at the points of production, assembly and transportation. This is a description of the state of affairs, not its source. The Fed’s inertia in withdrawing extraordinary monetary policy—amid full employment—is the proximate cause of surging prices.

When monetary policy is too tight, it slows aggregate demand. When monetary policy is too loose, it damages aggregate supply. Extraordinarily aggressive monetary policy, namely quantitative easing, discourages investments in real assets like capital equipment relative to financial assets such as stocks. That’s why nonresidential capital investment in the real economy—things like port modernization—is running 7% below the pre-pandemic trend and 25% below trend since the advent of QE. A more exuberant stock market and a less resilient real economy are both consequences of the Fed’s extant policy regime.


By August 2020, the Fed had become impatient with the purported low inflation rate of the Ben Bernanke and Janet Yellen years. Chairman Jerome Powell called low inflation—which averaged 1.7% in the prior decade, a mere 0.3 point below the Fed’s target—the pre-eminent economic challenge of our time. So the Fed bet on a new policy regime to get inflation higher. It worked. It’s not the first time a central bank wanted a little more inflation and got a lot more.

Last year, in another break with precedent, the Fed loudly and explicitly endorsed a blowout in federal spending. Congress swiftly agreed. Federal spending increased from an average of about 21% of gross domestic product in the prior decade to more than 30% in fiscal 2020 and 2021. National debt relative to GDP increased from 79% in 2019 to more than 100% today. Most troubling, the Fed bankrolled the fiscal profligacy, purchasing more than half of the new Treasury debt issued this year. Call it monetary dominance.

In congressional testimony recently, Mr. Powell made clear he was surprised and troubled by the medium-term trajectory of inflation. At this week’s Federal Open Market Committee meeting, the Fed seems ready to abandon its policy priors.

Achieving a soft economic landing at this late stage is difficult. If the sole task were to drive inflation down, the Fed would immediately taper its asset purchases and start raising rates. But a significant tightening cycle would likely cause market volatility to surge and assets to reprice. The authorities have expressed little concern about financial excesses, bubbles or financial imbalances. Hope they’re right. I expect tension between the Fed’s goals of price stability and financial stability to be in sharper relief in the new year.

Stopping QE altogether—even a few quarters ago—would have kept a lid on inflation and allowed a more measured path of rate increases. The Fed now has fewer degrees of freedom to keep the economy out of harm’s way. If the Fed doesn’t act with due speed and skill, inflation—the most regressive tax of all—will do further harm, particularly to the least well-off. If the central bank lurches into a significant, unexpected rate-rising cycle, the same hardworking Americans will bear the brunt of an economic slowdown.


The economy—and the country—is at a critical juncture. The biggest mistake of all, however, is to underestimate America’s strengths. The U.S. economic and political system often shows less well than it performs. At present, the first obligation of policy makers is to ensure a return to price stability.

Mr. Warsh, a former member of the Federal Reserve Board, is a distinguished visiting fellow in economics at Stanford University’s Hoover Institution.

[Crafty_Dog]

https://stockcharts.com/h-sc/ui?s=gbtc

[ccp]

crypto:
https://www.youtube.com/watch?v=5aF7dgWvQ6Y

[ccp]

https://www.msn.com/en-us/news/politics/melania-trump-joins-crypto-frenzy-with-release-of-first-nft/ar-AARSqqC

wait I thought THE DONALD said he was against crypto

as in his view it undermines the dollar.

 

Sorry, I am not buying an image of her "blue eyes"

[Crafty_Dog]

By: Geopolitical Futures
Taper time. The U.S. Federal Reserve said on Wednesday that it will wind down its asset purchase program earlier than planned. The program will now end in February 2022 instead of May. And although the central bank left interest rates unchanged, it signaled three rate hikes next year. Inflation in the U.S. hit 6.8 percent in the 12 months to November.

And in Europe. The Bank of England raised interest rates to 0.25 percent from 0.1 percent. It’s the British central bank’s first rate hike since the start of the pandemic, and comes a day after inflation in the U.K. reportedly hit a 10-year record of 5.1 percent. Across the channel, the European Central Bank opted to leave rates unchanged despite 4.9 percent inflation in November. The ECB did, however, reaffirm plans to end its emergency asset purchase program in March, though it will expand an older bond-buying program.

[Crafty_Dog]

second post:

https://www.bloomberg.com/news/articles/2021-12-14/crypto-prices-go-haywire-on-coinbase-other-data-providers?utm_campaign=bn&utm_medium=distro&utm_source=msn

[Crafty_Dog]

third

The Federal Reserve has retired the word “transitory” and now admits that inflation is high, but it isn’t in any rush to do much about it. That was the message Wednesday from the Federal Open Market Committee (FOMC) and Chairman Jerome Powell, whose actions said inflation really is transitory, even if it’s now impolitic for them to say so.

As a rhetorical matter, the FOMC statement shifted notably from its long-time wording and chucked its language that it would aim to have inflation run well above its 2% target. Mr. Powell waxed enthusiastic about the “rapidly” improving labor market and the economy—“really strong,” “consumer demand is very strong,” “incomes are very strong.” In that limited sense at least, he was mugged by economic reality.

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Left unsaid is that Mr. Powell and the Fed this year badly underestimated both the rise of inflation and the strength of the labor market. The chairman made it sound as if the inflation revelation had come to him in November, right around the time of the last FOMC meeting when the Fed stood pat on a very slow pace of withdrawing monetary accommodation. A lightning bolt of data struck, and he saw the light. We guess this is as close as the Fed ever gets to admitting a mistake.

Mr. Powell even made the startling statement during his post-FOMC press conference that “the inflation that we got was not at all the inflation we were looking for” when it unveiled its new policy framework to tolerate more inflation in August 2020.

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He elaborated later that the inflation the Fed was looking for was the type caused by rising wages. The inflation they got resulted from the supply-demand mismatch caused by the pandemic. Covid-19 sure does provide cover for a lot of policy mistakes. But we doubt this rationalization will comfort Americans who define inflation as rising prices—no matter the cause.


But never fear, Mr. Powell says the Fed has matters well in hand, and it predicts as much. The median estimate by Fed officials for personal-consumption expenditure inflation, the Fed’s preferred measure, jumped to 5.3% for this year. How could it not given reality? But they estimate that PCE inflation will crash in 2022 to 2.6%, and keep falling after that.

From this comforting scenario flows the FOMC’s modest policy shifts. The Fed will speed up its tapering of bond purchases, finishing in March instead of June. This isn’t monetary tightening—it’s merely a faster reduction of extraordinary monetary ease. The central bank’s balance sheet will keep growing for three more months even as inflation is running at nearly 7%. Amazing.

Mr. Powell made clear that interest-rate increases won’t begin until after its bond taper ends, and then the forecast is for only three quarter-point rate increases in 2022. This means real interest rates, after accounting for inflation, will remain negative throughout next year. This isn’t a hawkish policy, and the happy reaction of the stock market suggests that investors see a reduced threat to asset prices from higher rates.

There were no dissents on the FOMC, as Mr. Powell was eager to underscore. That’s a surprise given the gulf this year between the central bank’s predictions and inflation reality, but then conformity has been a hallmark of the Powell Fed.

Perhaps the FOMC members want to show solidarity as Mr. Powell and Fed governor Lael Brainard face Senate confirmation hearings—Mr. Powell for another four as chairman and Ms. Brainard as vice chair.

Mr. Powell’s strategy seems to be to steer through his confirmation by talking tougher on inflation while doing little about it anytime soon. The Senators can decide if they feel as confident as the Fed chairman does that he has it all under control.

[ccp]

"The Federal Reserve has retired the word “transitory” and now admits that inflation is high, but it isn’t in any rush to do much about it. "

we all knew they would wait till it's too late................

the rest of us have to pay for it
through taxation
and price inflation .......

while the elites party on.........

[DougMacG]

https://www.mediaite.com/news/larry-kudlow-calls-for-elon-musk-to-run-the-federal-reserve-the-guy-is-a-genius/

[ccp]

saw "ATM " machine
you put cash in to get bitcoin

[ccp]

https://blog.coinsource.net/how-to-use-a-bitcoin-atm/

[Crafty_Dog]

What the hell is going on with GBTC?!?

[ccp]

https://www.yahoo.com/finance/news/why-tax-season-may-be-adding-to-the-rout-in-bitcoin-cryptocurrencies-205732636.html

[Crafty_Dog]

https://www.themoscowtimes.com/2021/12/14/belarus-banks-readying-for-swift-shutdown-reports-a75808

https://www.themoscowtimes.com/2021/04/22/should-russian-banks-be-scared-of-swift-disconnection-a73644

[Crafty_Dog]

Wild and glib, and , , , plausible?

Why the next Fed induced asset bubble may be in Bitcoin – Mark E. Jeftovic is The Bombthrower

[DougMacG]

[Doug]  The Federal reserve is supposed to be an independent entity with specific responsibilities laid out in various federal laws, yet has been acting as a subordinate arm of an increasingly reckless Congress.  This article calls them out on that.

https://www.wsj.com/articles/debt-ceiling-spending-congress-fed-federal-reserve-monetary-fiscal-policy-11639698569

David Rivkin Jr. and Lee Casey are right that another debt-ceiling cliffhanger should be avoided, and that a constitutionally dubious suspension of the debt limit is not the answer (“This Debt-Ceiling Fight Threatens Democracy as Well as Solvency,” op-ed, Dec. 7). A smarter way for Senate Republicans to address the issue is to pass an entirely different sort of debt-limit bill, one that pays for obligations already enacted but limits the future share of that debt that could be financed by the Federal Reserve.

The Federal Reserve Banks’ stockpile of publicly held Treasury IOUs exploded from $476.3 billion in the third quarter of 2008 to $5.91 trillion in this year’s third quarter—that is, from 7.5% to 25.3% of GDP. In the same period, the federal debt grew from 67.3% of GDP to 122.6% of GDP. It seems doubtful that it would have been so easy for Congress to have let the debt grow twice as fast as the economy had it not been able to count on such an accommodating central bank.

We need to restrain this incestuous relationship between the congressional impulse to add debt and the Fed’s willingness to step in as the government’s lender of first resort. Our proposed debt monetization limit would prohibit the Fed from holding more than a specified percentage of the national debt whenever that debt exceeds a specified percentage of GDP. Such a limit would ensure that the Fed’s hoard of Treasury IOUs could not grow faster than the American economy that must bankroll the required interest payments.

Steve Stein, Larkspur, Calif.
Alan Reynolds, Cato Institute

Appeared in the December 18, 2021, print edition as 'To Restrain Debt, Rein in the Federal Reserve.'

[ccp]

https://en.wikipedia.org/wiki/Ray_Dalio

[ccp]

https://www.breitbart.com/tech/2022/01/01/2021-the-year-cryptocurrency-heists-went-nuclear/

[Crafty_Dog]

YA:

What do you make of that?

[DougMacG]

https://www.breitbart.com/tech/2022/01/01/2021-the-year-cryptocurrency-heists-went-nuclear/

Regarding $600 million theft: "Surprisingly, the letter actually worked. The hacker began to return funds to the Poly Network, claiming that they only hacked the exchange for fun and to reveal how poor its security was. By the end of August, all of the money had been returned."

   - That is not very reassuring.

[Crafty_Dog]

 

[ya]

BTC has never been hacked. When BTC has been stolen, its not by breaking the BTC cryptography, but by hacking the exchange. That is why Jan 3 is celebrated as "Not your keys, not your coins", by withdrawing everything into cold storage using a wallet such as Trezor.

[DougMacG]

BTC has never been hacked. When BTC has been stolen, its not by breaking the BTC cryptography, but by hacking the exchange. That is why Jan 3 is celebrated as "Not your keys, not your coins", by withdrawing everything into cold storage using a wallet such as Trezor.

Understood, but wouldn't insecurity at the exchanges affect how widespread the appeal is for it and thus the price?

[ya]

Most of the hacks have been on foreign exchanges and most with what we call shit coins (alt-coins). No US exchange has been hacked, and the few instances that have happened dealt with hacked passwords, SIM card swaps etc, which can happen anywhere. Most have learnt the benefits of self storage.

[ya]

Willy Woo on BTC

Top level summary for 2nd Dec 2021 (current price $47.6k):

Macro structure: Long term holders continue to have most of the coins, they are at peak accumulation, this is strongly bullish for Q1 2022.

Short term: It’s relatively neutral, there’s early signs of speculative investors reversing from sellers to buyers while hodlers continue to hold the line without any sell down. There’s no signs of a sell-off while on-chain NVT Signal is in a rare buy zone.

BTC price action expectation: Sideways accumulation, potentially choppy, then upward price action and an eventual short squeeze during this month of January as capital returns into the markets.

Price action conviction: Medium.

[Crafty_Dog]

Thank you YA.

[ya]

Jan 3 is Bitcoin's birthday. The day is celebrated by withdrawing all your coins from the exchange to your hardware wallet. That way your coins are safe and the exchange cannot lend out your coins in fractional banking and other games involving rehypothecation.

[Crafty_Dog]

A new era of monetary policy is starting to hit investors in the face after previously estimating that any tightening would be limited and gradual. FOMC minutes released on Wednesday showed that officials were fully on board with a faster scale back of the central bank's asset purchase program, which would give it greater flexibility to raise interest rates and could happen as soon as March. Stocks tanked on the news, with the Nasdaq ending the day down more than 3% for the worst start to a calendar year since the financial crisis (more on that below).

Excerpt: "It may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated. Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve's balance sheet relatively soon after beginning to raise the federal funds rate. Some participants judged that a less accommodative future stance of policy would likely be warranted and that the Committee should convey a strong commitment to address elevated inflation pressures."

The Fed is also going to be more aggressive in reducing its nearly $9T balance sheet, and while it didn't put a timetable on a runoff (that's when it shrinks holdings by allowing bonds to mature), many are estimating the tightening could happen as soon as the summer. "Participants judged that the appropriate timing of balance sheet runoff would likely be closer to that of policy rate liftoff than in the committee's previous experience... and could warrant a potentially faster pace of policy rate normalization." Some officials even said in the minutes that they preferred to "rely more on balance sheet reduction" and "less on increases in the policy rate" to avoid flattening the yield curve.

Whoops? "Participants remarked that inflation readings had been higher and were more persistent and widespread than previously anticipated. Some participants noted that trimmed mean measures of inflation had reached decade-high levels and that the percentage of product categories with substantial price increases continued to climb. While participants generally continued to anticipate that inflation would decline significantly over the course of 2022 as supply constraints eased, almost all stated that they had revised up their forecasts of inflation for 2022 notably, and many did so for 2023 as well."

[Crafty_Dog]

Bitcoin, Ethereum Prices Fall Along With Tech Stocks
Declines in cryptocurrencies triggered by faster Fed timetable for raising interest rates

Bitcoin declined sharply after the release of the December Fed minutes.
PHOTO: YONHAP NEWS/ZUMA PRESS
By Caitlin Ostroff
Follow
Updated Jan. 6, 2022 9:12 am ET


Cryptocurrencies led by bitcoin and ether slumped as part of the broader tech selloff, cementing their status among investors as risky assets quickly dumped in moments of market stress.

The falls were triggered by Federal Reserve minutes that showed officials are eyeing a faster timetable for raising interest rates this year. As rates rise, holding volatile investments that produce little income becomes less attractive compared with government bonds.

Bitcoin has declined about 6% since the release of the December Fed minutes on Wednesday and recently traded for $42,989.72. Ether, the world’s second-largest cryptocurrency by market value, has fallen about 9% since the release. That leaves bitcoin near its lowest 5 p.m. ET level since late September and far off highs hit in November. 

“This is proof that bitcoin acts like a risk asset,” said Noelle Acheson, head of market insights at crypto lender Genesis Global Trading. “The short-term holders, they are the ones who are trading and will be closest to the exit.”

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Bitcoin’s market is divided among long-term holders who see the digital currency, which is mined by computers, as a store of value, and hedge funds and other money managers who view it as a way to make money in times of market exuberance, Ms. Acheson said.

Jan. 5
9 a.m.
-14
-12
-10
-8
-6
-4
-2
0
2
%
Bitcoin
Ether
Cryptocurrencies, like other speculative assets such as tech stocks, have performed well over the past two years in an environment of superlow interest rates.


Bitcoin’s dollar value neared $70,000 last November as broader markets rallied and traders bet that the first U.S. exchange-traded fund linked to the cryptocurrency would pull in new investors who would push the price of bitcoin even higher. Since then, bitcoin’s rally has cooled, edging down at the end of last year.

“It had been range bound and seemed to be waiting for a catalyst one way or another, and the hawkish Fed was the catalyst,” said Craig Erlam, senior market analyst at trading firm Oanda.

Bitcoin and other cryptocurrencies are notoriously volatile and often gyrate on news of them being accepted in mainstream parts of the economy, rumors or pronouncements from celebrities.

Last year, Tesla Inc. ’s purchase of bitcoin and the stock-market debut of cryptocurrency exchange Coinbase Global Inc. both boosted bitcoin’s price. 

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[Crafty_Dog]

My play is long term, but I'm taking one helluva beating here right now.

Fail of the BBB bill, sooner than anticipated interest rate moves from the Fed, , ,

[G M]

My play is long term, but I'm taking one helluva beating here right now.

Fail of the BBB bill, sooner than anticipated interest rate moves from the Fed, , ,

Me as well.

[Crafty_Dog]

I made a long-term diversification decision as to how much I was going to invest in this sector and I did so with daily purchases until I hit that amount.  Having done so I now hold.

[ya]

BTC hodlers are forged by fire. The draw downs are becoming smaller. The volatility is huge, but the rise will also be massive. The hardest part is not selling anything for about 2 cycles.

[Crafty_Dog]

Thank you for the blast of courage.  Holding is my strategy.

[ccp]

https://www.yahoo.com/finance/news/u-senator-warren-calls-fed-151635355.html

[ya]

I am impressed this old guy and legendary investor Bill Miller is holding 50 % BTC and 50 % AMZN.

https://twitter.com/i/status/1480555030935588865

[Crafty_Dog]

Look at the volume over recent days

https://stockcharts.com/h-sc/ui?s=gbtc

[ya]

See this email from Hal Finney, first person to receive a BTC transaction from Satoshi himself. This is why we are so early and a long term hold is necessary.

[Crafty_Dog]

 

[Crafty_Dog]

I'm holding.

https://www.thestreet.com/investing/bitcoin-loses-40-of-its-value-since-november?fbclid=IwAR0GzM8iL1kbWf4DMTLA5F0YrAD32z1r61PhgfFerNb6uN5gkDdOua-Dc0A

[ya]

We all worry, when BTC goes down. However, the more you understand about BTC, the easier it is to not get shaken off.


1. Look at the Supply Demand for BTC. Currently about 100 million users, expected to rise to 1 Billion over the next 5-10 years, per various estimates, i.e. 10x increase in demand. 90 % of BTC has already been mined, over the next 8 years (two cycles), the new supply will go from the current 6.25 BTC/10 min to 3.125 BTC/10 min in 2024 and 1.5 BTC/10 min 2028. ie after 2028 98 % of BTC has been mined, i.e. there is no significant new supply the remainder will be mined in even  smaller amounts until 2140. In otherwords, demand >> supply, so price must go up.

2. In Q1 2022, El Salvador is coming out with their Volcano Bond, which is expected to be heavily oversubscribed. They will use half the money for BTC mining using renewable geothermal energy and the rest to make Bitcoin City, which will have no income or property taxes. If succesful, more such bonds will be issued.

3. ElSalvador has BTC as legal tender, the prez of El Salv has tweeted that he expects 2 other countries to make BTC legal tender in 2022. At the very least other S.American countries that use the US $, will also start using BTC and even perhaps make it legal tender.

4. The US cannot indefinitely postpone a spot BTC ETF. If that happens, BTC goes parabolic. Already Canada, Brazil, Europe have such ETF's. Fidelity has started to invest in the Canadian ETF, that is money drain out of the country.

5. Many rulings from IRS, SEC etc suggest that BTC is not going to be banned, that means the US has decided to live with BTC. This was a big threat over BTC, its been mitigated.

6.
Smart people say that money printing cannot be stopped, otherwise the markets crash. So M2 will increase, whereas BTC supply is capped. People including many billionaires such as Ray Dalio, Bill Miller, Druckenmiller, Tudor Jones, Michael Saylor are holding significant amounts of BTC in their personal portfolio.

7. Many companies such as Microstrategy hold BTC in the company's treasury. Cash is considered to be like a melting ice cube, where inflation eats it away. At some point, the big FANG stocks will also get into it.

8. Bonds: there are about 18 Trillion $ worth of NEGATIVE yielding bonds, at some point people will move out from them to get yield. BTC has given about 100 % CAGR average growth for the last 10 years or so.

9. There is enough evidence that Gold is being demonetized, significant amounts of money is moving from gold to BTC, same will happen to bonds, even a 5 % move from bonds to BTC can be quite dramatic.

10. Other assets such as Real Estate, cars, paintings etc which hold a lot of value, these will see flows to BTC. A 5 % flow to BTC from Real Estate will happen over the next few years. That could be massive.

11. Many boomers are retiring and will pass on trillions of $ to their millenial kids, many of whom are believers in BTC.

12. There are literally hundreds of companies, big and small investing billions of $ in BTC. We have not much looked at the so called second layer solutions of BTC. Just today CashApp launched Lightning payments over its app or with Twitter anywhere in the world, instantaneously and near free of cost. STRIKE just introduced a lightning payment service in Argentina, they just finished doing that in El Salv where 90 % of the population now has a Chivo wallet. https://twitter.com/i/status/1481015254742188032


I could go on and on...admittedly some of this is wishful thinking, but there is too much going on for BTC to crash very much. When in doubt zoom out and look at a BTC chart on log scale, its quite a bullish chart.

[Crafty_Dog]

We here on this forum need to remember how wrong we were in the years after the 2008 bubble burst that there was going to be massive inflation and to remember how right Scott Grannis was.  His entry Jan 7 entry here is well worth considering regarding current patterns, and his Jan 6 entry does a deep dive into his theory of the role of velocity to solve the missing link of monetarism's MV=PY.   Powerful stuff.

If he is right, then this is going to hurt. 

Me?  I am playing diversification and over the years I have proven to be a contrary indicator from time-to-time haha , , , hah.  And so I will continue to hold the percent of my savings that I have invested.  This may prove to be wrong, but the chance of it being right as YA describes is considerable.  The Adventure continues!

I would also add that as best as I can tell most people are failing to give due weight to the decrease in supply as a non-monetary inflation component to price increase. 

As some articles posted here have suggested, this may well increase should the world economy continue to fragment.  Depressionary and deflationary pressures could be surprisingly strong from this dynamic.
 
Crypto/BTC/Eth are in great part a mo-mo play based upon belief in increasing monetary inflation.  Is that belief changing?

[ya]

Review of top hardware wallets

https://www.youtube.com/watch?v=N57qEFP_UOg

[Crafty_Dog]

Perfect timing for me, thank you.

[DougMacG]

"most people are failing to give due weight to the decrease in supply as a non-monetary inflation component to price increase."

Right.  Anti-supply was the policy elected.  In Biden's first minute, he cancelled the Keystone XL pipeline.  That IS supply and it affects everything from other energy prices to food production, housing, transportation, manufacturing and everything else.

Being a futures market, energy prices went up with the announcement of election results; it didn't even wait for the policies sure to come.  He cancelled ANWR, right?  Drilling on federal lands, drilling off-shore.

Raising capital gains rates, raising corporate tax rate, income tax rates, greater regulations on producers, these all gut out supply investment before they even go into effect.

Then with trillions in monetary and fiscal stimulus, demand is stimulated, meaning inflated.  So if demand is up, you just produce more?  Not with millions of workers leaving the workforce and new workforce rules tying the hands of those who stay, and investment racing to its least productive use, cf bitcoin.

As University of Chicago Economics Professor Casey Mulligan says, Supply and Demand, In That Order:
https://caseymulligan.blogspot.com/

Scott Grannis post:
https://scottgrannis.blogspot.com/2022/01/the-fed-is-ignoring-demand-for-money.html

[Crafty_Dog]

https://www.wired.com/story/kazakhstan-cryptocurrency-mining-unrest-energy/?fbclid=IwAR08ZcIy6k-W-6vrUMhdAY9d0QyHVPT1838F2EEOQHuome-q4a-76HSqESE