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In this episode Bitcoin MagazineIts “Fed Watch” podcast, the reappointment of Christian Carols and Jerome Powell as chairman of the Federal Reserve, the recent leak of that reappointment as an attempt to sabotage, and news of the current state of monetary policy from the European Central Bank (ECB) and the Bank of Japan (BoJ).
Then, we’ve had a long conversation about geopolitical developments because they relate to migration to the United States, Europe, and the Pacific, tied to bitcoin as part of the upcoming great game. Of course, we covered the Bitcoin ETF (BITO) launched this week. It’s a little bit of a different episode, kind of “This is where we are in the world of central banking.” Discussion
Powell plays around re-employment
A few days ago, Powell’s personal business transaction was “leaked” They showed a few big transactions, but nothing as unpleasant as the internal transaction. Indeed, it is an interesting window into his personal beliefs, because his personal dealings speak louder than words.
The leak comes on the heels of similar leaks about Governor Rosengren and Kaplan, who were forced to resign in the ensuing debate. Powell came out smelling a bit like a rose. Initially, his chances of re-employment were sharply reduced as tracked on the PredictIT website, but within 24 hours, as the market had time to digest the news, his chances increased compared to before, dropping to about 65% and then quickly returning to 76%.
It looks like Powell will get another term. Lyle Brainard seems to be picking the European financial elite (Davos crowd), more dual and friendly towards the central bank’s digital currency (CBDC). We have discussed how the post of Fed Chairman contributes to the rapidly evolving geopolitical changes taking place between Europe and the United States.
ECB and BOJ updates
The ECB is in the process of increasing EU-issued bond purchases as part of its quantitative easing (QE) program. The ECB faces the current limit on asset purchases issued by the EU as 10% of its total. Another limitation is that the ECB is allowed to own one-third of any country’s outstanding debt. By increasing the amount of bonds issued by the EU it can purchase it will give the ECB “more space in the strategy.”
In the context of the pressure between centralization and decentralization, the ECB’s move pushes the tone towards deafness and further EU centralization and integration.
Another update from the ECB is the growing use of the term “transitory” to describe its inflation, just as we saw in the United States a few months ago. Europe’s headline CPI inflation rate is 3.2% in recent months, well above its 2% target.
Japan is a different story when it comes to inflation. Despite being the first to do QE (seen by many as inflation) and far from the central bank with the highest asset-to-GDP ratio, it is stuck at almost zero inflation. The only other major news outside of Japan is the vocal adoption of climate goals as part of its monetary policy goals. Perhaps it is to be distracted from its obvious failures and incompetences?
Comparison of central bank balance sheets
We talked a bit about the following chart, which shows that, for all blasters about inflation, the numbers are actually backwards.
As you can see, the ECB has the highest total assets and continues to have a more expansionary monetary policy than the Fed, yet its inflation rate is significantly lower than in the United States as a percentage of GDP. , Yet their inflation is the lowest of any major economy. Backwards
Bitcoin and the Sick Man Europe, Bitcoin ETFs and Bitcoin Mining
Finally, we have talked in detail about the Bitcoin alignment incentive and how it can be used as a stress reliever for the CBDC in the face of changing geopolitical situations.
In the links section below, I have included a great article that outlines the situation regarding the AUKUS alliance as a refutation of NATO and Europe. The latter has lost almost all geopolitical weight. The United States and China are the new axis of power, it is no longer the United States and Russia. Europe instantly loses strategic importance, but is still trying to stay in the great game by controlling some aspects of international discipline (such as keeping Bernard as chairman of the Fed).
Of course, we couldn’t finish the episode without talking about the Bitcoin ETF launch. We gave our opinions and insights about it and to the end of the Bitcoin Mining program.
Powell’s stock trade leaked, showing multi-million sales as the market tanked https://www.zerohedge.com/markets/powells-stock-trades-leaked-show-multi-million-sale-market-tanked
The ECB considers increasing the purchase of EU recovery fund loans https://www.ft.com/content/b1adae38-4f7e-4400-af34-abcc141da353
Yardeni monthly central bank balance sheet chart: https://www.yardeni.com/pub/peacockfedecbassets.pdf
There is no chance of going to hell from the elevator of Europe: https://tomluongo.me/2021/10/18/there-is-no-getting-off-europe-elevator-to-hell/