10 Burst results for "Alex Krueger"
"alex krueger" Discussed on The Breakdown
"While citizens have typically flocked to dollarized assets in past crises, the strict capital controls in place and the growing realization that dollar accounts held with banks may have been raided by the government, meaning that people feel that there's very few places to turn to safely store wealth. Now bitcoiners have of course been following this closely for a few reasons. First of all, as I mentioned, there are lots of Argentinians in the Bitcoin and crypto community who are posting updates from the ground. Second, that most recent IMF bailout deal that we were just mentioning that Argentina signed last year explicitly included a clause that would force the Argentine Central Bank to try to quote discourage the use of cryptocurrencies with a view to preventing money laundering, informality, and disintermediation in order to quote further safeguard financial stability, which was obviously seen as a direct shot across the bow of Bitcoin from the IMF. On top of that, anytime bitcoiners see an example of inflation like this, our natural tendency is to see Bitcoin as fixing it. Sure enough, on Saturday April 22nd, Michael saylor tweeted, if you live in Argentina right now, you need Bitcoin. Still, in Argentina, it's long been clear that the preferred safety currency is the U.S. dollar. In 2019, Alex Krueger wrote, before bitcoiners start using Argentina, my country, as an excuse to yell by Bitcoin and generate clicks and sell newsletters. Argentines want to protect themselves against the peso losing value versus the dollar. And for that, they buy dollars. I do believe everyone should have Bitcoin. Argentines in particular. I am openly bullish Bitcoin for multiple reasons. However, I don't think it is right to use a national tragedy to fabricate uninformed narratives. For an even more up to date take bowtie Mara also wrote about this in his substack post today called the tale of two currencies. He writes, and what about plan B? So many people responded to this viral post about the BCRA scrambling for dollars that it's time for Argentina to adopt a Bitcoin standard. Since I save in Bitcoin myself, this is of course a compelling argument. However, knowing the local economy very well, this is not something that would be adopted or could be implemented at this time. The infrastructure is not there yet, since Argentina is 50% plus cash payments, and many businesses only accept cash. With the current poverty levels and many poorer areas of the country, people are more worried about getting food on the table versus getting a phone that they can use for Bitcoin payments. Besides, not even libertarian presidential candidate Xavier melle is talking about anything Bitcoin related, so there is no political platform for this in Argentina, like there is in El Salvador, for example. I think that's a pretty fair assessment of where things are. And I would say that when we talk about the idea of Bitcoin fixing this, it's important for us to be able to speak in both individual and societal terms. What Mara is articulating is the fact that right now, in this immediate crisis, based on the infrastructure in place and based on the politics as they are in Argentina, some mass shift to a Bitcoin system just isn't in the cards. But at the same time, he points out that he saves in Bitcoin.
CoinDesk Podcast Network
"alex krueger" Discussed on CoinDesk Podcast Network
"Even more simply Alex Krueger writes, the arbitrary foundation thinks you are all idiots. Now, as for me, I have no dog in this fight. I hope that the foundation lives up to its promise of incredible decentralization. I think that would be good. For the purposes of this show, it's simply noteworthy that the sort of behavior that went on routinely in 2021 is just sort of beyond the pale now. It speaks to the idea that this community is not like some of the DeFi and Dow communities back then. Instead, it is a well informed and pissed off group of enthusiasts. Echoing this idea of who's still around is based carbon who writes, by the way, I met up with one of my norby Friends today, dude who was I was dying to talk to during the bull when he bought, et cetera doge in 88 at the tops and I tried to chat a little about crypto with him and he showed zero interest, none. Just so you know where we're at in the cycle. So, let's take a step back and try to sum this all up. Here's one plausible mental model for market participants at this moment. Effectively, all the people who bought the top in 2021 have been washed out. All the macro larps and Wall Street tourists are gone, and the people who are left are either the people who are here in 2020 before all this run got started, or people who have held through three AC and Celsius and the FTX, and have come to their own conclusions and convictions. These are folks who don't care about Warren's crypto army. They don't care about a New York Times enviro foot article. They saw a ton of firms declare bankruptcy and they're not scared of the winkle vie handing Gemini $100 million. These people are, in other words, narrative proof, their immune to FUD. Especially because they've been hearing the same FUD recycled for years. Everyone that was going to sell has sold. The traders that are left have survived some of the most volatile markets of the size that have ever existed, it got taught a pretty big lesson in risk management over the last year. These people are all seeing what satoshi saw in 2000 8 play out in front of their eyes. The banking system is increasingly broken. The monetary system is unwell. And in the face of all of this, Bitcoin just keeps chugging along. At least that's how it looks to me. Who knows? I could be completely wrong. It could be as some have suggested just front running the halving. There might be buyers that we haven't picked up on that are secretly Tapping in behind the scenes. There's also the possibility that we're just resetting to where we were supposed to be if we hadn't had all these institutional failures and collapses last year. In other words, that prices were overly depressed relative to stock market peers and other asset groups, and that they're finally coming into equilibrium. No one knows for sure, certainly I don't know for sure, but I will take a beautiful day of 30 K and I'm pretty sure you will too. Till tomorrow guys be safe and take care of each other. Peace
The Bitboy Crypto Podcast
"alex krueger" Discussed on The Bitboy Crypto Podcast
"And we won't be having like a little live read for this section here soon. So it's a little more put together. But moving on to the XRP story of the day here, XRP will be a huge winner and multi $1 trillion payment space says iron, key capital adviser. Let's see what he has to say. Kevin cage, an adviser at iron key capital. Digital asset management fund that focuses on researching crypto enterprise adoption and decentralized data utility networks recently expressed his strong belief in the potential of XRP on Twitter. In the past 7 days and year to date, the XRP price is up 34.63% and 67.91%, respectively. Let's see here. Here are some tweets about it. Alex Krueger says, well, what is this here? Oh, here's the intimate. Continues to express a marginal recovery. Price up 44% in two weeks. Yeah. Ever since we picked it on crucial crypto, it's been crushing it. That was great timing. Great timing. Shout out Alfred for making that pick. Because I didn't see this coming. He did apparently. Ripple winning over the SEC would translate into alt season. So follow that closely even if not long the standard. So he's saying, even if you don't like XRP, watch the altcoins when this case ends. Ethereum has poised to break out. Let's see, this is about eth. I don't want to talk about eth right now. Insider trading is in extinguish from non insiders speculating on insider buying. Just because XRP is going up doesn't mean it has to have anything to do with news, could just be a duck buying lead to relative strength leading to a narrative, just saying I got it back anyway. Donald, it's a pretty smart guy. I think he's, I think he's pretty good. He got no issues with him. What I would say about this tweet that he says here is what he's saying is true. Okay, this tweet is correct.
The Bitboy Crypto Podcast
"alex krueger" Discussed on The Bitboy Crypto Podcast
"Kelly, I appreciate it, man. Always a good time. And to that one question, I think TJ you answered it correctly, right? Tell me where to go. Where's the first place to get started? When to level up to advance. I answered that in there. And we do have Tom crown in the chat telling us that the coinbase stock coin is actually rallying right now, and that's another thing to keep an eye on. We know tech stocks have been getting pounded specifically crypto stocks, you know, a lot of publicly traded companies like core scientific, you know, running into solvency issues, a lot of people, a lot of hate on the coin stock as of late, but I could see those blockchain stocks starting to rally as we move into the next cycle as well. Yeah, let's pull up the four hour chart on that and you can see a nice little candle right there if we pulled the 15 minute yeah, you just see a nice little upward trend, especially on this four hours, just been got battered down down to 32 bucks and then it's just all the way up to 50 a so almost a two X there, so almost from 30 to $60. So Cathy wood, I know she got in pretty low. I don't know if she got the exact bottom, but if she did very, very good job. And real quick, I had to pull that off. It was the echo. I hear myself. And so you know what that's like when you're trying to talk and you hear yourself one second later. It's brutal. Wanna hear more about near? It's just a L one that I'm interested in and it's one of the ones I'm looking at. And Tom crown, come to Atlanta. Yeah. Come to Atlanta. Do it. Yeah, man, there's so many cool people. You come over every Sunday. I'll make you some spaghetti. All right, let's talk about some Bitcoin stories now. Let's get into the show. Bitcoin, skyrocketing by over 50%, and this is very doable from these current levels according to Alex Krueger. He has a 150,000 Twitter followers. And he said, we could rally up to $35,000. That's up 52% from the current levels before we get a correction. So we're not seeing that pullback at 28. We're now seeing that pullback a 30, we could go all the way to 35 before we see that pullback. Ask whether it could fall between 19 and 20 this year after the surge, he said it is probable, but notes that 23 is more likely, so he sends 23 could be that key level of support. And he says that the fed open market committee, the FOMC continuing to be in favor of hiking rates and other tightening measures is likely to impact the crypto markets adding that will happen during the next fed meeting is still up in the air. Now we keep talking about the basis points.
"alex krueger" Discussed on The Breakdown
"Going on guys? It is Thursday January 5th and today we are catching up on the macro scene. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review or if you want to dive deeper into the conversation. Come join us on the breakers Discord. You can find a link in the show notes or get a bit dot LY slash breakdown pod. All right friends well for the last couple of days as you know, we have been catching up on crypto from over the break, but today we are going into the macro realm because remember, before there was the wrecking ball of Luna and then three AC and then Sam and now maybe Barry? There was the macro environment and the fed just tanking all risk assets. In fact, this week we had something of an anniversary. Yesterday we got the fed meeting minutes from December and the meeting minutes are kind of a chance for the Federal Reserve to give extra nuggets of information to drive markets in the direction they want. It's not an accident that they're released weeks after the actual FOMC meeting. They're used as yet another tool of self fulfilling prophecy. So if the fed thinks the markets didn't get the message they were trying to send well enough or got it too well, they can recalibrate. This happened in dramatic fashion in January of last year in 2022. In December 2020 one, the fed confirmed that their FOMC meeting, what everyone anticipated, that rate hikes were coming in 2022. In fact, that confirmation drove markets higher as pretty much everyone in the market thought that the fed had waited too long to hike rates at that point. What markets didn't anticipate was that in addition to rate hikes, the Federal Reserve actually anticipated starting to reduce the size of the balance sheet in 2022 as well. In other words, a shift from quantitative easing to quantitative tightening. This was surprising because after the fed's last period of QE, it took years to actually start to move to balance sheet normalization and eventually reduction. So to do it in just months after rate hikes began would be a dramatic shift. Here's how macro analysts and trader Alex Krueger put it back then.
The Fed Is Scared of Stock Market Animal Spirits
"Today we are going into the macro realm because remember, before there was the wrecking ball of Luna and then three AC and then Sam and now maybe Barry? There was the macro environment and the fed just tanking all risk assets. In fact, this week we had something of an anniversary. Yesterday we got the fed meeting minutes from December and the meeting minutes are kind of a chance for the Federal Reserve to give extra nuggets of information to drive markets in the direction they want. It's not an accident that they're released weeks after the actual FOMC meeting. They're used as yet another tool of self fulfilling prophecy. So if the fed thinks the markets didn't get the message they were trying to send well enough or got it too well, they can recalibrate. This happened in dramatic fashion in January of last year in 2022. In December 2020 one, the fed confirmed that their FOMC meeting, what everyone anticipated, that rate hikes were coming in 2022. In fact, that confirmation drove markets higher as pretty much everyone in the market thought that the fed had waited too long to hike rates at that point. What markets didn't anticipate was that in addition to rate hikes, the Federal Reserve actually anticipated starting to reduce the size of the balance sheet in 2022 as well. In other words, a shift from quantitative easing to quantitative tightening. This was surprising because after the fed's last period of QE, it took years to actually start to move to balance sheet normalization and eventually reduction. So to do it in just months after rate hikes began would be a dramatic shift. Here's how macro analysts and trader Alex Krueger put it back then. This is excerpted from a thread that he published on January 9th, 2022, almost exactly a year ago. There has been a very fundamental shift at the Federal Reserve. The fed has flipped decidedly hawkish. Their main worry is not employment. It is inflation. And to fight inflation, the fed has to increase interest rates. It all started with Powell's inflation no longer transitory comment of November 30th. And culminated with the FOMC minutes released on Wednesday, where fed officials discussed faster balance sheet normalization.
CoinDesk Podcast Network
"alex krueger" Discussed on CoinDesk Podcast Network
"Or get a bit dot LY slash breakdown pod. All right friends well for the last couple of days as you know, we have been catching up on crypto from over the break, but today we are going into the macro realm because remember, before there was the wrecking ball of Luna and then three AC and then Sam and now maybe Barry? There was the macro environment and the fed just tanking all risk assets. In fact, this week we had something of an anniversary. Yesterday we got the fed meeting minutes from December and the meeting minutes are kind of a chance for the Federal Reserve to give extra nuggets of information to drive markets in the direction they want. It's not an accident that they're released weeks after the actual FOMC meeting. They're used as yet another tool of self fulfilling prophecy. So if the fed thinks the markets didn't get the message they were trying to send well enough or got it too well, they can recalibrate. This happened in dramatic fashion in January of last year in 2022. In December 2020 one, the fed confirmed that their FOMC meeting, what everyone anticipated, that rate hikes were coming in 2022. In fact, that confirmation drove markets higher as pretty much everyone in the market thought that the fed had waited too long to hike rates at that point. What markets didn't anticipate was that in addition to rate hikes, the Federal Reserve actually anticipated starting to reduce the size of the balance sheet in 2022 as well. In other words, a shift from quantitative easing to quantitative tightening. This was surprising because after the fed's last period of QE, it took years to actually start to move to balance sheet normalization and eventually reduction. So to do it in just months after rate hikes began would be a dramatic shift. Here's how macro analysts and trader Alex Krueger put it back then. This is excerpted from a thread that he published on January 9th, 2022, almost exactly a year ago. There has been a very fundamental shift at the Federal Reserve. The fed has flipped decidedly hawkish. Their main worry is not employment. It is inflation. And to fight inflation, the fed has to increase interest rates. It all started with Powell's inflation no longer transitory comment of November 30th. And culminated with the FOMC minutes released on Wednesday, where fed officials discussed faster balance sheet normalization. The latter is worrisome enough to trigger a bear market. Raising rates are tapering quantitative easing should not be bearish enough to change the upwards trend across assets. But this goes beyond that. In less than 6 months, the fed went from expecting no rate Higgs for 2022, party goes on to expecting three rate hikes accelerated taper and discussing accelerated balance sheet normalization. Balance sheet normalization was not on anyone's radar for a long time. Not only is this now a possibility in the near term, but the fed is talking about doing so faster than in 2018. That's why crypto assets dropped 15 to 30% in two days last week. Accelerated normalization would be dreadfully bearish. What does balance sheet normalization mean? It means reversing the asset purchases conducted under QE.
This Week In Google
"alex krueger" Discussed on This Week In Google
"Oh no. I'm really mad at The New York Times for saying Ben and Justin Smith. Named Gina chua is executive editor. So first of all, congratulations, Gina chua, executive editor Reuters. I think 61, 60. She previously editor in chief of South China morning post. This is that weird startup. Nobody knows what Ben and Justin are doing. But they're not related. They have the same name. The New York Times, which used to call people things like mister Smith and mister Smith. For some reason I've decided to make them a couple Ben and Justin Smith. That is funny. That is funny. Is it just, am I the only one who noticed that? I thought that is just for the background. Ben was the editor of BuzzFeed news and then became media columnist New York Times Justin Smith was the founder of the week magazine in the U.S. head of the Atlantic founder there with the people who started with the courts and then had a Bloomberg media. And the two Smiths went off to start a new media venture to serve everybody who speaks English in the world, but they said nothing more about it. We all don't know what it's really going to be. So I'll be talking having Justin come talk to our oh good. Well, now that you have a little bit to chew on because Gina was a very big name. Gina is brilliant. I know Gina and I think this is important too. Gina is trans. And to have a trans person that high up in news and media is part of the diversity we have to seek out and I'm glad for that. I think it's going to make a difference. Maybe they used Ben in Justin Smith as a headline headline ease. Because you have limited space in a headline. I'm just thinking of ideas. It could have said Smith and Smith have already been making sure it's just a very strange thing. No, I get it. They're going to be calling it finished and are they married? Yeah, and no, they're not. It doesn't even fit. It doesn't make sense. It's a very strange Smith. Or Smith squared. The other reference. It happened to me. I accidentally attended a crypto bro dinner. Alex Krueger, I love the gargi. And Miami event I found myself surrounded by a cult obsessed with minting bananas and trading eth, does it all mean anything? I just like the title. I don't know if I came to the dinner I was wearing shorts was kicked out, came back and then had that moment of realization when you realized, oh, no, I'm surrounded by them. Everywhere. Given Stacy's reaction last week to my suggestion that we should talk about crypto Moore, nice work. This is her nightmare. This is a weird one. Board apes and crypto punks are merging. Yugo labs the NFT company behind the board apes yacht club acquired the rights to crypto punks and me bits collections from larval labs. These are the world's most valuable NFT collections. You can now controls NFTs with around 5 and a half billion in market cap. Yikes. The billion billions. You go lab says it plans to open up the IP rights of individual crypto punks to their owners. I guess how bored apes works. I don't even understand what that means. Apparently, there was a conflict between the crypto punk community and larva labs, which hadn't been willing to take such a step. So NFT marriage made in heaven. Board apes and crypto punks. Just be the next to the last person holding the bag. Yeah. Just be next to last. Yeah, just don't want me the last one. That's for sure, yeah. Do you want the remote controlled cookie store? As long as I put this in here, this is stupid. I put it in there because it's so stupid. It's kind of smile. Is that a Waymo? Looks like one of those. It's like the giant robot, the robot who probes who roams around the Philadelphia stores plus smaller wagon robot. It's got two faces. It's adorable. All right. It's from a company called there for you, Stacy. It's very cute. Make you happy. It's very cute. It's from a company called tortoise. They're steered by operators though. They are not autonomous. Big trended robots, by the way, when you see a robot, you might be having a person operating behind it. This is a big thing in autonomy. So when people say this, do you have to walk behind it? Or could you have to sit in an office with us steering wheel? Yeah. A lot of them are office controlled. And they have watching drones. You could deliver cookies in office. So I want to know who was driving this drone in Shanghai that drove straight into wet cement. Cookies? Yes. Retailers can use the tortoise mobile smart store. To deliver whatever you want, chocolates, AirPods, knee socks. Is this is actually a really interesting way because for some in some areas, not all areas. If I said, I need this in enough of my neighbors got together and needed it. Maybe it could deliver it to our area in a cost effective way. Here's an interesting looking perfect. They're being used right now by 18 retailers in the U.S. and Europe, but they're all being driven by humans in the remote operations center in Mexico City, where why not? People who encounter the robots can tap their credit card. This is from the story in axios, open the lid and take a box of cookies or AirPods or sweat socks. Remote operators watch and listen as a transaction takes place, the merchants don't pay for the robust they just give them 10% of the gross sales. Leo, I have the socks you're going to want. Sounds like a sweet gig. One 51. These are the socks. How do they prove that they've paid? And it won't even open until you tap the car. Is everything in its own bin? They must have some sort of sensor. Stuff, you don't take if I pay for a cookie and I grab AirPods. This is the Amazon store all over again. What's interesting is good point. The coal founder Dmitri Chevy, who was Uber's micro mobility guy, said people spend more on these things. People are buying a $35 pastry box when previously the most they've ever spent in a vending machine is maybe $4. They're spending more than they would have vending machine. 18 merchants on board so far, go grocer, convenience stores in Chicago, lady shook a lot, a confectionery in Los Angeles, and Edith's, which sells what it calls Jewish comfort food in Brooklyn, New York. If somebody came up to me with a bagel and schmear, you're in. You're in fake. I do it for chicken fried steak and mashed potatoes. Oh, talk to me. I'm gonna beat that. I'm gonna put in the chat here. The oyster vending machine. Now, see, that's a bad idea, because oysters. That's dodgy. Go take a look. The oyster of any machine, right? There it is. Right there, right? Where? In our chat room. Look at that. Look at you getting all fancy. Wow. It's a French vending machine that spits out fresh oysters. Don't say that..
The Breakdown with NLW
"alex krueger" Discussed on The Breakdown with NLW
"Talking about what the highest inflation print in four count them four decades means for markets. First though, if you are enjoying the breakdown, subscribe to the show, give the show a 5 star rating, leave a review or if you want to get deeper in the conversation, join the breakers Discord. It's at bit LY slash breakdown pod and that link is also in the show notes. Now, today is CPI day as in. It's the day that we found out how inflation fared for December. This is, of course, the big macro conversation and has been for a year. In 2021, the battle was between on the one hand, the Federal Reserve saying they were going to keep dovish monetary policy conditions because they believed inflation to be transitory, IE just the product of supply chain dislocations and supply demand mismatch coming after the worst of the shutdowns of the COVID crisis, and on the other side markets who were saying you simply will not be able to handle inflation running as hot as it's likely to run. The fed did its best to keep the transitory language going, but ultimately there was in fact a hawkish shift. And that happened between call it September and December. The fed started to acknowledge that while they still believed the same underlying conditions were causing inflation as they always had, it was less clear to them than ever how long it was going to take for supply chain issues to unwind and inflation to go down, and in the meantime they weren't willing to just let it run up any longer. We went from at the end of the summer, not expecting any rate hikes in 2022, two by December an acknowledgment that we were likely to see three quarter point rate hikes in 2022. In addition to that, there would be an acceleration of the tapering of asset purchases to be concluded in early 2022. Now, markets found all of this fine. In fact, they improved after the December FOMC meeting. For one, it seemed like the fed was actually addressing inflation in some way or at least probably more importantly acknowledging it. And second, it was very clear that Powell was not setting out to become some Paul Volcker two. Willing to raise interest rates into the double digits and cause a recession in order to fight inflation. That led to a general market rally going into the end of the year. But last week, that all changed when FOMC meeting minutes from December came out and markets learned that the fed had been briefed on not only asset purchase tapers, but in fact quantitative tightening or the term that they used balance sheet normalization. If quantitative easing involves buying assets to provide liquidity to markets, quantitative tightening involves the opposite, selling assets into the open markets and in turn reducing liquidity. Now that early and more aggressive QT that some had proposed in those minutes, made many worry that we were heading into a secular shift to less liquidity and much faster than anyone anticipated. For the last week, the market has been settling into this idea and that's why you've seen risk assets at least what traditional finance considers risk assets like crypto sell off. Still, there are going to be a lot of different points along this journey in 2022 where the stakes could change and where the outcomes could change. One of those is seeing monthly inflation prints that don't meet expectations to the downside. In other words, inflation that comes in lower than people expected. Should we see a set of months in a row where inflation seems to be declining? That would reduce the pressure on the fed to make a sharp hawkish turn. So, throughout 2022, we're going to be watching these things closely. As Alex Krueger tweeted earlier this morning, thanks to crypto, today's will be the most popular inflation report in history. Crypto, making the boring fun since 2009. So let's get into what expectations were heading into today's numbers. And let's actually start with Jerome Powell's confirmation hearing for his second term as chair of the Federal Reserve. A few things stood out to me about this hearing. First, for those who just wanted to hear Powell talk about crypto, they're really wasn't much here. Senator Tommy got Jerome Powell to agree that the fed shouldn't be probably a nationwide retail bank, and that private stable coins can coexist with any sort of formal U.S. digital dollar or fed coin. When other questions of crypto as a threat to financial stability came up, Powell brushed them over pretty aggressively. It's very clear that crypto as a stability risk is not a big concern for him. Second, he spent a lot of time reminding people of what his and the feds mandate really was. There was a ton of discussion about the limitations of monetary policy. The fed can't control supply only demand the fed can't do much about structurally low participation due to poor child care, and healthcare provisioning. The fed can't change structural racism in the distribution of unemployment and wealth, the fed can't build solar and wind farms. The fed can't break up monopoly pricing power. In many ways, it felt like Powell was gracefully trying to remind the Senate in Congress that it was their job to deal with these issues. And frankly, that was mirrored in his crypto talk. Unlike some of his counterparts in other central banks, he is really not pushing CBDCs. He's not trying to expand the role of the fed, at least it seems like. He's got his mandates, which are financial stability and full employment, and he wants to stick to them. This is good because there was also a lot of political setup. With the midterm elections happening this year there is going to be politics swirling all around these issues and a lot of Republicans took the chance to remind Powell of the sacred importance of the feds independence from other political actors. You have to imagine that as Biden and Democrats see shrinking approval numbers, there's going to be pretty intense pressure on the independence of the fed. And by the way, that would be the case whichever party was in power. Next Ho is a trusted and easy to use crypto platform, where you can buy cryptocurrencies at the touch of a button and start earning up to 17% annual interest that is paid out daily. They support all of the major assets on the market, and even allow you to swap one asset for another or borrow cash against your crypto without selling it. Nearly 3 million people in over 200 countries trust nexo with their digital assets. 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The Breakdown with NLW
"alex krueger" Discussed on The Breakdown with NLW
"A lack of supply because manufacturers, supply chains that had to turn off the rails as shutdowns happened. All of that would be worked out and things would move on. And this is important because the fed doesn't want to use monetary policy to try to fight a supply chain dislocation that just doesn't make sense. But the markets never really believed, at least in my eyes that the fed was going to be able to keep its dovish stance for as long as it wanted to. Phase two was this sort of nebulous in between phase, where Powell and the other members of the fed started to acknowledge that maybe this inflation wasn't so transitory. They thought that it was probably still largely due to supply chain disruptions and that supply demand mismatch, but it kept persisting and it kept lingering longer than they thought. What's more it was getting harder and harder for them to justify keeping such dovish policy because so many people had dropped out of the workforce and that was leading to challenging calculations around the other side of their mandate, which is maximum employment. Phase three, which I believe really started around Powell's renomination was the we will fight inflation phase. It was an end to the whole transitory talk. It was an acknowledgment that this could go on a lot longer, and it was an acknowledgment that there were political ramifications because the U.S. population was seeing consumer prices rise, and it was a commitment that this group of people had the tools and was going to use the tools to make sure inflation wasn't an ongoing concern. That got us to the last FOMC meeting of the year where the fed signaled that there could be three rate hikes in 2022 and that tapering would wrap up faster than anticipated. Now this was quite a hawkish turn in the September meeting there was only one anticipated rate hike in 2022, and there wasn't even full universal conviction around that. However, the tone of the presser afterwards with Jerome Powell very much signaled that he was not going to be on some sort of anti inflation crusade. And so the market's largely sloughed it off, actually responding well to having a little bit more clarity around what they could expect in 2022. However, yesterday, the meeting notes from that December FOMC meeting were released, and there were a couple new things that market actors honed in on. First was the timing, many took the minutes as a signal that as Neil Dutch head of U.S. economics at renaissance macro put it, the fed is on a glide path to a march rate hike. Most people were expecting these rate hikes to be the second half of the year, march was a little earlier, and march made it possible to see a fourth rate hike in 2022 depending on how things went. The second and much bigger discussion was around the balance sheet. In December after the FOMC meeting concluded, the discussion was all around the speed of the taper and interest rate hikes, but it didn't get into discussions of the balance sheet. Notes, however, show that there was a briefing from staffers relating to the normalization of the now $8.8 trillion balance sheet. And by the way, this new term balance sheet normalization used to be called quantitative tightening. So keep your eye on that sort of marketing shift as well as we talk. Now, during the last rate hike cycle, which came in the 2010s, the fed waited two years after lifting rates to begin trimming their assets. This time, from the notes, quote, participants judged 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 also quote that some participants judged that a significant amount of balance sheet shrinkage could be appropriate over the normalization process. So this is what really has markets going badly. So let's look at some of the reactions. Mac ten suburban drones points out that this shows a pattern. This is the third month in row the fed has escalated their hawkish policy stance. In November they were on a single taper, December brought double taper now per the FOMC meeting, they're talking about balance sheet reduction. Lisa abramowitz tweets the fed had a hawkish tilt in the December meeting, but the meeting minutes showed that members were even more inclined to remove accommodation than many expected, especially given the extensive discussion of the balance sheet. Scott minerd, everyone's favorite person to ignore his Bitcoin predictions and the CIO of Guggenheim said fed minutes much more hawkish than I'd expected. Fed seems intent on raising rates and shrinking the balance sheet simultaneously. Clearly the recipe for a financial accident. Ross Gerber tweets fed causing a taper tantrum. They did this before. We expect them to change their tone with all the issues from Corona. A fed induced recession would be a disaster. Yellen needs to take power for a walk. If that isn't going to solve things by creating a recession. We'll have stagflation with this recipe. Powell did this in 18 and it was a bad year. Hence the sell off. CNBC showed a chart with their polling suggesting that 40% of respondents thought it was likely to see a fourth rate hike in December, something that no one was really anticipating before these minutes were released. Alex Krueger tweets markets may be overreacting short term, but looking beyond hard to overestimate how hawkish the fed minutes were. QE reduction plus three hikes okay, but three hikes plus accelerated quantitative tightening was not on anyone's radar. And the fed is likely to deliver in less inflation subsides faster than expected or credit markets collapse. There's of course a political dimension to this as well. Luke Grumman said today we got more evidence that the fed is no longer operating a dial. It is operating a switch. Global economy on and global economy off. If the fed keeps us up, Dems try to just may want to start asking what polls better in November midterms. 6% inflation or U.S. recession. Zero hedge tweets has someone explained to Biden with the fed crashing the market will do to his polls, and the 6 poppy says if the fed crashes the market this year, combined with the handling of the pandemic, this is going to be the biggest political massacre we've ever seen for Dems come midterms this fall. But there is a different perspective as well. So let's look to a slightly more sober and different take from Mark Dow, who writes feds barking to buy time to try and get a better handle on how much inflation is likely to come down on its own. They don't want to hike only to find out they've overestimated overheating part of inflation story, but still want to be in a position to hike enough if need be. So this goes back to that Jeff Snyder argument that I mentioned at the beginning. That was basically saying by showing off and surprising the market with extra hawkishness actually getting into the QT quantitative tightening balance sheet normalization discussion. Earlier than expected, it buys the fed some time to actually see how things play out in the markets without having to actually do anything. He reinforces exactly this, saying, barking about quantitative tightening is a freebie for the fed. Easiest way to dampen sentiment without hiking, reverse placebo effect. Give them more time to see how soon and how much supply constrained prices increase in some prices start to decline. I actually think there's something to be said for this perspective that there's a lot of value for the fed in trying to throw the market in one direction based on what they might do to give themselves more time to actually let markets resolve without them having to do anything at all. But let's shift over now to the Bitcoin side. I gave my two cents before about why Bitcoin is more correlated than it was before and why that correlation shouldn't seem unexpected. And I'm also quite sure I don't need to get into prices. As you've no doubt been checking them on the way down a little bit more than is healthy. But as we sit here under 43,000 currently, let's again look at some community reactions. Alex Krueger again points out a funny foible in 2020 investors by Bitcoin as they worry about inflation. 2021 and 22, investors sell Bitcoin as they worry about the fed worrying about inflation. This reinforces to me the idea the reality that will help you understand Bitcoin that it exists as both a risk asset and a flight to safety asset at the same time in different timelines and for different people. You have Bitcoin holders who view it just as a speculative game, the farthest thing out on the risk spectrum who are going to flee at the first sign of trouble. You also have an ever growing set of toddlers who view it as a lifeline in whatever storm is to come next. And then frankly, you have a lot of people in the middle who have long-term conviction but who are working with personal or institutional mandates that force their hand in short term movements. Anyway, moving to more reactions, there have been a lot that I've seen with conviction that the fed is just going to have to reverse course. Dylan Leclair tweets honestly would love to see Bitcoin inequities continue to grind down over the next month. Max opportunity is when not if the fed blinks and reverses course. It's anyone's guess when that comes. There's also a lot of sentiment out there that people IE the fed shouldn't have this much power. Reinforcing the fundamentals of Bitcoin for so many. Dennis Porter from the smart people shit podcast tweets, even rumors that the fed will raise rates causes massive panic selling across the globe. A 7 member board of humans shouldn't have this much power over our lives. We need a monetary policy that is predictable and controlled by code. There are some who are pointing out that although the market is tanking, people aren't really freaking out. Checkmated from glass node posted a tweet showing the divergence between Bitcoin's illiquid supply and its price and said thanks for the cheap stats anon. Bitcoin sent straight to cold storage just like all of these coins. Love me a good old divergence. Let it run as hot and as deep as you want, the reversals will be swift and powerful, have seen this movie before. And of course, what he's referring to is the fact that more and more Bitcoin is leaving and has been leaving exchanges even with recent turbulence. Bitcoin leaves exchanges when people have long-term conviction and it moves back onto exchanges when they're getting ready to sell. The fact that the market is going down while the illiquid supply of Bitcoin, IE the supply of Bitcoin not on exchanges is going up, suggests that nothing has changed ultimately in terms of HODLer conviction. Still, not everyone is convinced that this is going to be an easy time for all crypto assets. Adam Cochrane wrote a great thread and I'm going to read the back half of it. Hopefully it's a market over spook in the fed does this softly, but clearly pressured to move faster than even suggested last month. In my personal view, this is bearish overall, very bearish on growth, but outperform on value in havens. If we do slip into a macro bear, it will be interesting to see how a lot of new sectors that didn't have scale last bear out like NFTs. Now, as we wrap up, even though there seems to be pretty universal acceptance of the notion that this Bitcoin move is macro driven, right? Fed driven. It's worth noting that this week Kazakhstan shut off the Internet and with it their 18% of the Bitcoin hash rate. This is obviously something that we need to be paying attention to and something that I'll be getting into later this week. For now, the next thing to watch is inflation numbers on Friday and the market's reaction there. And going forward, I believe it will be increasingly important to keep track of the domestic U.S. political landscape as it relates to markets and the midterms. But we'll wrap there for today, I want to say thank you again to my sponsors nexo dot IO, abra and NFTX, and thanks to you guys for listening and hanging out. Until tomorrow, be safe and take care of each other. Peace..