Author Topic: Money/inflation, the Fed, Banking, Monetary Policy, Dollar, BTC, crypto, Gold  (Read 512925 times)

ya

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If you are confused between Proof of Work and Proof of Stake

ya

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I think this BTC Futures ETF has promise..note the ticker name.


G M

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Is there one that is FJB?

Crafty_Dog

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BTC Futures ETF ?

FJB?

G M

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BTC Futures ETF ?

FJB?

FJB=Let’s go Brandon!

Crafty_Dog

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Ah.

ccp

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Crafty_Dog

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Crafty_Dog

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Coinbase on the Futures ETF
« Reply #1608 on: October 20, 2021, 12:05:56 PM »
Published on October 19, 2021

Bitcoin prices, as all traders know, are driven up and down by a complicated set of market forces — including the impacts of positive and negative headlines known as “market sentiment.” In recent weeks, as prices have climbed back above the $60,000 mark set during spring’s bull run peak, one category of headline has been hard to miss:

SEC Set to Allow Bitcoin Futures ETFs as Deadline Looms, reported Bloomberg in mid-October: “Barring a last-minute reversal, the fund launch will be the culmination of a nearly decade-long campaign by the $6.7 trillion ETF industry.” 

Bitcoin Comes to the Big Board, said the New York Times a few days later: “An exchange-traded fund tied to the cryptocurrency is set to begin trading on the New York Stock Exchange, a milestone for the industry.”

Indeed, the first-ever U.S. BTC ETF — short for exchange-traded fund — debuted on the NYSE on October 19. Following a 75-day review, the SEC allowed the Bethesda, MD firm ProShares to begin trading its “Bitcoin Strategy ETF (BITO)” on October 19. Several similar products from other companies are expected to launch in subsequent weeks.

More than 12 million BITO shares (worth around $480 million) traded early on Tuesday — ”easily one of the busiest ETF debuts ever seen” according to Bloomberg. Retail traders appeared to be interested, with BITO becoming the most-bought asset on Fidelity’s platform in the first few hours of trading. Bitcoin prices rose as well — breaking the $63,000 mark for the first time since April.

What’s so exciting about the arrival of a bitcoin ETF?
As Bloomberg noted, ETFs are a vast, popular investment category. Investors can now gain BTC exposure through a familiar investment vehicle that can be purchased from any brokerage — whether they’re individuals who might not feel confident buying BTC directly or institutional investors (like some pension funds) that may be bound by investment restrictions.

One key note: this first BTC ETF doesn’t hold bitcoin directly — unlike many of the products that have been floated over the years, as well as popular crypto ETFs available in Canada and Latin America. Instead, it holds “bitcoin futures contracts.” (More on futures below.)

To understand why this news was met with such interest, we need to zoom out a little — and take a look at what ETFs are, what bitcoin futures are, and why it all matters.

What is an ETF?
ETFs are a hugely popular class of financial product. They generally track the price of an asset (like gold or bitcoin) or basket of assets (like tech stocks). They can be bought or sold via conventional brokerages, tend to have low fees, and are popular with a wide range of investors — from individuals saving for retirement to big Wall Street funds. (Learn more about ETFs.)

ETFs exist for almost every corner of human existence. The largest — the SPDR S&P 500 ETF Trust (SPY), nicknamed the Spider — tracks the S&P 500. But there are ETFs that focus on everything from marijuana companies to weight-loss related stocks — as well as sustainable energy, currencies, commodities of all kinds, and much more.

Until now, though, there weren’t any BTC/crypto ETFs in the U.S. — despite at least a dozen applications over the last decade.

How does the new BTC futures ETF work?
The ProShares ETF doesn’t hold bitcoin directly. Instead, it holds bitcoin futures contracts — bundles of agreements to buy BTC in the future at a specific price — which trade on the Chicago Mercantile Exchange (CME).

Some analysts predict that BTC futures ETFs will pave the way for “spot-based ETFs” that hold crypto directly — like popular products currently available in Canada (including a new ETF that tracks both BTC and ETH). Firms that hope to launch ETFs in the U.S. submit proposals to regulators including the SEC. As regulatory clarity continues to emerge, a wider variety of crypto ETFs may finally get the green light and go to market (read our policy proposal). 

What are BTC futures?
Futures are part of a bigger financial category called “derivatives” — which are financial contracts that derive their value from the price of an underlying asset, like corn, gold, oil, or bitcoin. They’re typically used for two purposes: hedging and speculation. For example, a family running a corn farm could hedge, or protect itself, from the shock of a drought by locking in corn future prices through a derivative. There are a huge range of derivatives, ranging from the commonplace and well-known to the more esoteric (like “swaps,” which most people who don’t work on Wall Street learned about during the 2008 financial collapse).

Two of the most common types of derivatives are options and futures:

Options allow investors the opportunity to buy an underlying asset at a specific price (called the “strike price”) within a set time period. As their name suggests, the actual purchase is  optional — holders of an option are under no obligation to execute the contract, which, in practical terms, means that options are generally exercised only when the strike price is lower than the market price.

Futures, on the other hand, aren’t optional: they’re a contract to buy a specific quantity of an asset on a specific date at a specific price. Bitcoin futures don’t exactly mirror BTC’s market price, but the two tend to be correlated (that is, they generally move up and down together). Indeed, the news that the Bitcoin futures ETF would be launching was reflected in both bitcoin’s price and the price of bitcoin futures.

Remember, a BTC futures ETF doesn’t directly invest in bitcoin — it invests in bitcoin futures contracts. While the prices of BTC futures and bitcoin itself are correlated, a BTC futures ETF won’t track the value of bitcoin as precisely as a “pure” BTC ETF might. (Fees for the ProShares Bitcoin Strategy ETF are also higher than those charged by many index ETFs — likely reflecting the added complexity of tracking the value of a bundle of futures contracts.)

Crafty_Dog

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https://amgreatness.com/2021/10/21/congress-needs-to-provide-guardrails-for-the-cryptocurrency-revolution/
GREATNESS AGENDA
Congress Needs To Provide Guardrails for the Cryptocurrency Revolution
Congress urgently needs to step in and either force the SEC to provide actual, meaningful "regulatory clarity" for the entirety of the cryptocurrency industry, or to draft legislation.
By Josh Hammer

October 21, 2021
The Chinese Communist Party poses the most comprehensive 21st century threat to the American nation, the American people and the American way of life. The first half of this century will be defined by how the United States meets the Chinese challenge across the full spectrum of economic, national security, geopolitical, and cultural issues. And an easily neglected aspect of our new great-power competition with our Far East archfoe now cries out for diligent and prompt attention: safeguarding the fruits of the nascent, but ascendant, cryptocurrency revolution.

Last month, China effectively banned all cryptocurrency trading and mining, which the Communist Party increasingly views as a threat to its planned “digital yuan” sovereign digital currency, which may be released as early as 2022. The People’s Bank of China, the Chinese central bank and Federal Reserve equivalent, barred international exchanges from providing cryptocurrency services to Chinese investors and speculators. It also banned financial institutions and digital exchanges from facilitating domestic crypto transactions.

China’s moves have further exacerbated already high volatility in the crypto markets, leading to intensified calls for the Securities and Exchange Commission to provide “regulatory clarity.” For instance, Senator Pat Toomey, (R-Pa.), an orthodox free marketeer, noted last month that in some recent crypto-related enforcement actions, “the SEC did not identify the securities involved or the rationale for their status as securities, which would have provided much-needed public regulatory clarity.”

The issue with extant SEC enforcement in the crypto space, as Toomey indicated, is its wildly inconsistent—and oftentimes outright punitive—nature to date. Crypto proponents contend that the only clear guidance from the SEC has been found through various one-off lawsuits. They point to the SEC’s ongoing case against Ripple Labs, a blockchain software company that uses the XRP cryptocurrency in cross-border payment settlements for banks. Ripple sought SEC guidance for years while billions of XRP tokens circulated, but never received any. In December 2020, the SEC then filed a $1.3 billion enforcement action alleging that every XRP sale since 2013 constituted an unregistered securities trade. That is not how due process of law is supposed to work in a well-functioning republic.

As the United States locks horns in a generation-defining struggle with China, and as the recent Chinese crackdown on cryptocurrencies opens the door for the United States to regain the global mantle on crypto innovation, it would be a mistake to simply continue on in the same way with the SEC’s peculiar brand of “regulatory clarity.”

The United States should support emerging technologies with the potential to add value to the economy, so long as those technologies are not detrimental to the national interest and the common good. The way to do that is not via inconsistent and incoherent regulatory enforcement based on whether a specific type of cryptocurrency is found to constitute an “investment contract” (i.e., security) under the Securities Act of 1933, according to the Supreme Court’s Howey Test from over 70 years ago.

SEC Chairman Gary Gensler has thus far unhelpfully stated that most cryptocurrencies are likely securities. That is insufficient guidance. Joe Biden is said to be weighing an executive order to direct agencies to craft clearer crypto regulations, but it is impossible to have any faith in doddering Uncle Joe’s ability to unilaterally help matters in such a novel area of the economy. An entirely new approach is needed.



One need not think very hard about where that new set of coherent legal guardrails ought to come from. “In republican government,” James Madison wrote in Federalist 51, “the legislative authority necessarily predominates.” And so it ought to be for crypto regulation in the year 2021, as well.

Congress urgently needs to step in and either force the SEC to provide actual, meaningful “regulatory clarity” for the entirety of the cryptocurrency industry, or to draft legislation. Such legislation would be a modern-day Securities Act update and would provide extremely clear guidance as to which forms of cryptocurrency—Bitcoin, Ether and so forth—constitute securities/”investment contracts” under the Securities Act of 1933 and which do not. The former category of securities would require SEC registration, whereas the latter category of commodities would fall under the Commodity Futures Trading Commission’s regulatory ambit.

Massive, economic paradigm-shifting industries require the most rudimentary of guidelines and categorical sorting to best channel their comprehensive societal value-add. This is simply not a partisan issue either. Just as the Securities Act of 1933 was needed in its day, so is a Securities Act of 2021 needed now. It’s time for Congress to get moving.

ccp

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Crafty_Dog

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WSJ: Crupto shenanigans?
« Reply #1611 on: October 25, 2021, 06:04:33 AM »

Crypto Is Shedding Its Tether
John Law issued bank notes willy-nilly. Are stablecoin issuers doing the same?

By Andy Kessler
Oct. 24, 2021 6:12 pm ET
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PHOTO: ANDRE M. CHANG/ZUMA PRESS

The launch of the first bitcoin-focused exchange-traded fund last week proves crypto bulls need to meet John Law. The Scottish gambler, economist and financier is likely why why so few top French banks have Banque in their name. Instead, there is Crédit Agricole, Société Générale and Crédit Mutuel. Law’s Banque Générale, later renamed Banque Royale, issued bank notes out of thin air, then royally blew up in 1720 and destroyed the French economy. The reputation of French banks has never fully recovered.

Law’s connections gave him exclusive rights to trade between France and its Louisiana Territory. The Mississippi Co. was funded by selling new shares of Banque Générale that could be paid for with bank notes issued by—wait for it—Banque Générale. Shares took off, rising from 500 livres to 10,000 livres from January to December 1719. Soldiers had to be sent in to keep order in the frenzied financial district.

Law’s flaw was issuing bank notes willy-nilly, without real backing for their value, to keep the stock price rising. The French government eventually made the huge mistake of making these bank notes legal tender, doubling the French money supply. Inflation raged, hitting a 23% monthly rate in January 1720. By September 1721, shares dropped back to 500, and the French economy imploded.

Fast-forward 300 years. Crypto had a big October, with bitcoin rising from almost $44,000 to a $66,000 peak in anticipation of the ProShares Bitcoin Strategy ETF, which actually doesn’t buy bitcoin—it buys bitcoin futures. Meanwhile the stablecoin issuer Tether Ltd. paid a $41 million penalty after the Commodity Futures Trading Commission found the company had falsely claimed it had adequate dollars in reserve to back its tokens.


The New York attorney general’s office ran a similar investigation over Tether’s claim of 1-to-1 backing with U.S. dollars. It ended, unsatisfactorily if you ask me, with an $18.5 million settlement paid in February and an agreement to produce reports on reserves for tether. Why not dig further? Tether neither admitted nor denied the attorney general’s findings.

I wanted to know more, so I submitted a Freedom of Information Law request with the New York attorney general’s office requesting reserve statements, ledgers and bank records from Tether. It was denied, citing disclosure that would “constitute an unwarranted invasion of personal privacy” and “interfere with law-enforcement investigations or judicial proceedings.” Thanks for nothing.


Tether released vague pie charts of its $42 billion in “reserves” in May. Only 5% was in cash or Treasurys, and around half of the backing of Tether was unnamed commercial paper. Is it AAA-rated paper from JPMorgan Chase or an IOU backed by Dogecoin? They don’t say. When Coindesk filed a FOIL request for documents detailing Tether’s reserves, Tether attempted to block it, arguing: “The competitive advantages Tether gains from its investment strategy would be wiped away if competitors had full visibility into Tether’s investments.”

The attorney general’s office did release details of a fascinating cat-and-mouse game in its settlement agreement after stating that “Bitfinex and Tether deceived clients and market by overstating reserves.” Until Sept. 15, 2017, an account at the Bank of Montreal held most of Tether’s cash, some $61.5 million backing the 442 million tethers then in circulation. Not 1 to 1. Sister company Bitfinex held $382 million in a “comingled [sic] account” that Tether called a “receivable.” Tether was claiming money on another company’s balance sheet as its own reserves.

Here’s where it gets funny. Tether engaged Friedman LLP for “consulting services” “to analyze our bank balances” on Sept. 15, 2017. That morning, Tether opened an account at the Puerto Rico-based Noble Bank, and later that day Bitfinex transferred more than $382 million into Tether’s account. Friedman verified Tether’s assets that evening.

According to the settlement agreement, in October 2018 Bitfinex and Tether dropped Noble Bank and opened an account at Deltec Bank & Trust Ltd. in the Bahamas. On Nov. 1, 2018, Tether produced a letter on Deltec letterhead saying that as of Oct. 31 the portfolio cash value of its account was over $1.8 billion. On Nov. 2, the attorney general’s office notes, Tether started transferring a total of $475 million to Bitfinex accounts at Deltec, clearly a game of pass the assets.

Can we trust Tether, which has grown from 21 billion to 69 billion tethers in circulation this year? Doesn’t it sound a bit like John Law’s Banque Royale issuing bank notes? And what is Tether buying? It isn’t clear. The most recent disclosure from an independent accountant in the Cayman Islands—not an audit—for Tether reserves shows a lot of commercial paper and certificates of deposit and secured loans. Only about a third of its reserves are cash and Treasurys.


How about a real audit? Recently, the Biden administration announced it is considering regulating stablecoin issuers as banks. Mandating transparency for crypto would go a long way. But it could get ugly for crypto investors. In June the stablecoin IRON, supposedly “soft pegged” to the dollar, dropped from $1 to under 70 cents after TITAN, its collateral token, fell from about $64 to nearly zero in a few hours of frenzied selling that caused $2 billion in losses.

Like Law, are stablecoins being issued willy-nilly and increasing volatility in bitcoin and other crypto? How much leverage is there in crypto world? Bahamas-based crypto exchange FTX allowed 100 times leverage for margin trading, though in July the company trimmed it to a still insane 20 times. According to Bloomberg, part of Tether reserves includes a $1 billion loan to Celsius, a crypto-lending startup. If cryptocurrencies are to become the backbone of a modern financial system, let’s open them up for scrutiny before a Banque Royale-esque bubble bursts into the real world.

Write to kessler@wsj.com.

Crafty_Dog

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Crafty_Dog

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Inflation or price increase?
« Reply #1615 on: October 26, 2021, 06:16:35 PM »
Prices can go up because of increased money supply or decreased product and service supply:

https://www.zerohedge.com/news/2021-10-26/why-isnt-gold-going-inflation

Crafty_Dog

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BTC vs The Beast
« Reply #1616 on: October 27, 2021, 11:06:41 AM »

DougMacG

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Money, the Fed, Banking, Dollar: Interest rates
« Reply #1617 on: October 29, 2021, 11:42:01 AM »
Received in the mail, Citibank advertising for saving account that pays 12 times the national average.

The offer is for 0.5% interest.  National average* is 0.04%.

Inflation rate is 3%.  Could go to 6, 10, 100 or 10,000% in a short time.  And savers make 0.04% on their money?  And 9,9% if you don't put it in the bank.

Do the math on that.

Somebody tell me, what is EVERYTHING that's wrong with this picture?

G M

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"Inflation rate is 3%"

It is?

DougMacG

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Inflation rate = 4.4% and rising
« Reply #1619 on: October 29, 2021, 12:16:32 PM »
"Inflation rate is 3%"

It is?

Depends on how measured and the time frame.  I understated it:

"Headline inflation, including food and energy, rose at a 4.4% annual rate in September, the fastest since 1991.
Core inflation, which is the Fed’s preferred gauge, increased 3.6% for the 12 months, the same as in August but still also the fastest pace in 30 years."

https://www.cnbc.com/2021/10/29/inflation-notches-a-fresh-30-year-high-as-measured-by-the-feds-favorite-gauge.html

ccp

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Doug,

I got the same message for very high interest rate
I think it was from citi

i junked it
I don't recall if in email or regular mail

deleted if from my mind till you posted this

has got to be some scam

G M

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Re: Inflation rate = 4.4% and rising
« Reply #1621 on: October 29, 2021, 10:15:01 PM »

https://www.usinflationcalculator.com/


"Inflation rate is 3%"

It is?

Depends on how measured and the time frame.  I understated it:

"Headline inflation, including food and energy, rose at a 4.4% annual rate in September, the fastest since 1991.
Core inflation, which is the Fed’s preferred gauge, increased 3.6% for the 12 months, the same as in August but still also the fastest pace in 30 years."

https://www.cnbc.com/2021/10/29/inflation-notches-a-fresh-30-year-high-as-measured-by-the-feds-favorite-gauge.html

Crafty_Dog

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This sounds quite ominous
« Reply #1622 on: November 04, 2021, 03:30:52 PM »

ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1623 on: November 06, 2021, 08:32:50 AM »
BTC Update from Willy Woo:
Top level summary for 5th Nov 2021 (current price $61.1k):

Macro: Accumulation from long term holders has now peaked, it’s a bullish structure for the months ahead. I continue to monitor this metric for clues into how long this bull market phase may last.

Short term: Price was previously overheated, calling for a time of consolidation, since then we’ve seen significant buying from investors while price has been sideways. It’s been a healthy consolidation. Meanwhile significant whale activity has been spotted which suggests BTC’s next move in price may come soon.

Ethereum Notes: ETH broke the $4.3k resistance band mentioned in the last letter and is now undergoing a rally. Fundamentals continue to strengthen. ETH price is far from being overheated, there’s a lot of legs left in its rally over the coming month(s).

BTC price action expectation: Bullish. Price is ready to move upwards in the coming two weeks. Often we see dips before strong rallies so short term traders need to account for this possibility.

Price action conviction: Medium to high.
« Last Edit: November 06, 2021, 08:43:59 AM by ya »

ya

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Metal Plates
« Reply #1624 on: November 07, 2021, 07:48:12 AM »
This is a good update on metal plates used to store keys. His  work links to prior studies on other metal plates.

https://blog.lopp.net/metal-bitcoin-seed-storage-stress-tests-round-v/
« Last Edit: November 07, 2021, 04:15:58 PM by Crafty_Dog »

ccp

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inflation back to the James Earl days
« Reply #1625 on: November 10, 2021, 06:43:35 AM »
https://finance.yahoo.com/news/stock-market-news-live-updates-november-10-2021-231156781.html

the LEFT -

no big deal
it is temporary
this is an investment in our future
suck it up [suckers!]

don't worry we will [or have - who knows?] pass bills that will make college , health care, child care, paid family leave "free"

so keep voting for us folks
you will love it


G M

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Re: inflation back to the James Earl days
« Reply #1626 on: November 10, 2021, 07:07:56 AM »
It’s temporary, just like stage 4 pancreatitis cancer.

https://finance.yahoo.com/news/stock-market-news-live-updates-november-10-2021-231156781.html

the LEFT -

no big deal
it is temporary
this is an investment in our future
suck it up [suckers!]

don't worry we will [or have - who knows?] pass bills that will make college , health care, child care, paid family leave "free"

so keep voting for us folks
you will love it

DougMacG

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Re: inflation back to the James Earl days - Carter
« Reply #1627 on: November 10, 2021, 10:27:52 AM »
Uugh.  It's temporary inflation.  "Short term and "transitory", the administration says.  "Like stage 4 pancreatitis cancer".  G M nails it. 

"Short term and transitory" hyperinflation - like Venezuela with the same policies, killing the golden goose.  Like Jimmy Carter - with no Reagan to follow.

We can have this giant and powerful government that can afford health care, child care, retirement care, infrastructure and so on ONLY IF we also have an even larger, more dynamic, vivacious, robust, hearty, able, freely operating private economy to support it.  Does anyone see a contradiction?



ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1629 on: November 11, 2021, 06:51:41 AM »
Guys play with this calculator, I think real infl rate is perhaps 10 %. Watch what happens over the next 10 years to your purchasing power. Bottom line: what's your insurance plan ?

https://www.buyupside.com/calculators/inflationjan08.htm

G M

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Inflation charts
« Reply #1630 on: November 11, 2021, 08:16:34 AM »
Guys play with this calculator, I think real infl rate is perhaps 10 %. Watch what happens over the next 10 years to your purchasing power. Bottom line: what's your insurance plan ?

https://www.buyupside.com/calculators/inflationjan08.htm

http://www.shadowstats.com/alternate_data/inflation-charts
« Last Edit: November 11, 2021, 04:15:43 PM by Crafty_Dog »


ya

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« Last Edit: November 14, 2021, 05:03:30 PM by ya »

ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1633 on: November 14, 2021, 07:35:32 PM »
BTC Hopium


ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1635 on: November 27, 2021, 07:34:59 AM »
BTC update from Willy Woo

Top level summary for 27th Nov 2021 (current price $54.8k):

Macro: Unchanged (as per last letters), structurally we expect a bull run well into Q1 2022.

Short term: HODLers continue to buy the dip, there are no signs of fundamental weakness seen in the COVID 2020 and May 2021 crashes. Short term trader positioning is currently signalling a bottom. In essence the last call for a bottom remains unchanged apart from an unpredictable down wick from COVID macro fears. (I will issue a new letter should this change and investors start selling.)

Ethereum notes: ETH fundamentals remain strong.

BTC price action expectation: A clear bottom forming in the next 2-4 days. Then consolidation over the weeks of December, and if nothing else changes a bullish phase in January.


Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1636 on: November 27, 2021, 07:58:05 AM »
Much appreciated YA. 


ya

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Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1638 on: December 03, 2021, 03:35:31 PM »


Inflation Pushes the U.S. Fed Toward a Faster Taper

The U.S. Federal Reserve’s announcement that reducing inflation is now more pressing than reducing unemployment suggests the central bank will probably accelerate its winding down of asset purchases, increasing the probability of interest rate hikes in 2022 that would slow the U.S. economy and tighten financial conditions globally. Fed Chairman Jerome Powell told the Senate Banking Committee on Nov. 30 and the House Financial Services Committee on Dec. 1 that the mandate on inflation now took precedence over the mandate on employment. The announcement came ahead of the Dec. 14-15 meeting of the Federal Open Market Committee (FOMC). Powell would probably not have indicated the shift and acceleration of a wind-down of the Fed’s asset-purchasing program (known as quantitative easing, or QE) unless he already had broad support within the FOMC.

There were no dissents among the 11 FOMC voting members when it announced a scaling back of QE on Nov. 3. Several have since indicated support for accelerating the pace of a wind-down, including Vice Chairman Richard Clarida and two current voting regional Fed presidents.

The Fed is under increasing pressure to control inflation with lawmakers on both sides of the aisle urging in congressional oversight committees for finishing the taper early by the end of March or April.

Scaling back the Fed’s asset-purchasing program is not a tightening of monetary policy but a diminution of monetary policy accommodation, which has maintained substantial liquidity in the U.S. and global economies. The winding down of QE could enable the Fed to increase its main policy interest rate, the federal funds rate (which is currently 0-0.25%), as early as the spring of 2022, if necessary. Real interest rates, however, will still be negative as long as inflation exceeds the nominal rate with continued monetary stimulus to the economy. It could also still be some time before interest rates reach the so-called “neutral” level that supports the U.S. economy at full employment/maximum output while keeping inflation constant.

The Fed will roll over maturing securities it owns and not reduce the size of its balance sheet, which exceeds $8.7 trillion and is directly tied to the size of the money supply. The balance sheet has more than doubled in size since March 2020 when the COVID-19 pandemic was declared, growing at $120 billion per month from purchases of U.S. Treasury securities ($80 billion) and mortgage-backed securities ($40 billion).

The Fed has said repeatedly that an end to QE was a prerequisite to raising interest rates to avoid a policy conflict.

The Fed is unlikely to change course in response to a few new data points, though unexpected bad news on employment or reductions in inflation could derail an accelerated taper. While It is still too early to assess the economic impact of the new omicron variant of COVID-19 discovered in Africa, there is now widespread recognition it could worsen the supply-chain bottlenecks that are driving up prices. The U.S. labor market, meanwhile, is already tight and increasing demand for goods is unlikely to have immediate effects on increasing employment, although it would add to wage pressures. The other major risk is a failure by Congress to increase the federal debt ceiling, which could panic the U.S. Treasury securities market (the largest financial market in the world) and require the Fed to provide additional emergency liquidity to the economy. Congressional leaders may agree on a temporary extension of the debt ceiling, but this would still leave open the potential for political gridlock continuing to delay a permanent fix.

While the U.S. Labor Department’s monthly payrolls report released on Dec. 3 showed a smaller-than-expected increase in the number of jobs in the U.S. economy, it was mainly due to labor shortages and a drop in the unemployment rate. The November consumer price index (CPI), which is scheduled to be released on Dec. 10, will likely also be insufficient to change what the Fed now sees as the current economic trend. The Fed’s preferred inflation measure, the Index of Personal Consumption Expenditures (PCE) increased by 5% in October (the latest reading).

The Fed’s “Beige Book” of anecdotal evidence of economic conditions from all 12 regional Fed districts, released Dec. 1, showed supply-chain and labor shortages slowing growth but maintained an overall positive economic outlook, with strong demand allowing businesses to pass on “moderate to robust” price increases.
Over the longer term, the Fed is demonstrating new flexibility in responding quickly to economic circumstances that could burnish its credibility as an economic risk manager. Signaling accelerated tapering less than a month after the original schedule was announced was a bold move. It was also somewhat out of character for the Fed — a slow-moving, consensus-driven central bank that has pushed a story of temporary, slight increases in inflation for most of the past year.

Unlike in the case of the 2013 QE tapering, the Fed seems to have avoided a market “tantrum” in which interest rates increase precipitously over a very short period. The Fed’s easy-money policies, while supporting the economy with liquidity, have effectively underwritten elevated asset prices (especially for equities), with the Fed as the buyer of last resort.

By abandoning the word “transitory” to describe inflation trends, the Fed now recognizes a failure to account for supply-side constraints from the pandemic while demand was maintained through an estimated $14 trillion in fiscal support over 2020-2021 and $4 trillion in monetary actions.

The Fed was in danger of falling behind the inflation curve since monetary policy takes 12-18 months to have real effects and potential wage-price spirals are difficult to stop. Reducing the amount of money stimulus should reduce those inflationary pressures. The Fed has bought some time, even as there will be renewed fears of the Fed acting too harshly and choking off the recovery.

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1639 on: December 03, 2021, 07:45:43 PM »
What the hell happened today with BTC and GTBC?

ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1640 on: December 04, 2021, 04:22:30 AM »
The 2017 bull run had multiple pull backs. There was too much leverage in the market.


ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1641 on: December 04, 2021, 04:52:16 AM »


Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #1643 on: December 04, 2021, 07:49:23 AM »
I am currently buying a fixed amount per day so as to average cost my ultimate intended position.

ya

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« Last Edit: December 04, 2021, 03:55:48 PM by ya »



ccp

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man with 1 million bitcoins
« Reply #1647 on: December 07, 2021, 07:32:10 PM »

Crafty_Dog

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