Stay ConnectedFed Watch is a weekly podcast with Bitcoin Magazine’s Podcast Editor CK and Historian/Economist Ansel Lindner of Bitcoinand Markets.com.
Ck and Ansel interview the best analysts, traders, and thinks in both Macro economics and Bitcoin as well as give the audience their takes of important news and press conferences in the macro space.
This is the perfect podcast to learn about and stay on top of Bitcoin, Macro Economics, and the world at large.
In this episode of the Fed Watch podcast, due to popular demand, I welcome Tom Luongo back on the show! Tom is one of my favorite writers due to his entertaining prose and deeply refreshing insight on global macro, geopolitics, and currency markets. He is also a long-term bitcoiner, discussing it for many years in his writing and podcast.
Fed Watch is the macro podcast for bitcoiners. In this episode, we start by getting a big picture view from Tom on the global situation, then dive into some specifics about Europe, the US, the Federal Reserve, Ukraine, and much more. We wrap up the show talking about what Tom sees for the US in the short to midterm, so, the next 3 to 24 months. Below, I’ll provide a little more detail on what was said, but this is a MUST LISTEN episode!
The first question I ask Tom is, is he as bearish as everyone else? It seems everywhere we look people are screaming about bear markets and collapse, from macro to geopolitics to bitcoin. However, I think this collapse narrative is overdone, especially for the United States. I ask Tom to give us his broad picture of the state of the markets.
He starts in by identifying the sick man at the table, that being Europe. Europe is hit the hardest by the forces that have been unleashed right now, rising commodities prices, rising inflation, loss of confidence in institutions, et cetera. As Europe struggles and begins to cannibalize itself, all that capital in investment portfolios in Europe will eventually have to flow somewhere, and it’ll flow to the United States.
The conflict that has started in Ukraine is on Europe’s doorstep, and specifically on the doorstep of the best economy in Europe over the last decade, Poland. Tom asks rhetorically, “is Warsaw or New York closer to Ukraine?” As investors realize that this new conflict is not going away, and to fight it with economic weapons as they have been, they must destroy their own economies, money will rapidly flee Europe to the US. I’ll add, it will also flow into bitcoin.
I ask Tom if he thinks the Fed will go through with uber-hawkish rate hikes. His answer eloquently lays out that Powell’s plans to raise rates back in 2017 was interrupted by Covid, and now, Powell is going scorched earth to raise rates to break the back of every other central bank and rival currency.
The reason the Fed will do this according to Tom Luongo is that the Fed, owned by Wall St banks and US monied interests, is trying to wash out the decade of malinvestment that’s built up since the GFC. He also frames it as a fracture in the relationship between US monied interests and the globalists in Europe. We can’t understand the Fed without understanding the Davos crowd’s intent to rule the world or burn it down.
According to Tom, the Federal Reserve will raise rates continually until 2024, to break the back of Davos and the radical globalist/communist objectives. I tend to agree with him, perhaps I wouldn’t put it as colorfully as Tom does, but the globalists are “global communists” and will burn the global economy down before they admit defeat.
The last part of the episode, I ask Tom about my theory that, what is good for the US economy is good for bitcoin, at this moment in time. A
In this episode of the Fed Watch podcast, CK and I discuss the evolving economic situation in China and Japan, China’s lockdowns and real estate developments, and Japan’s monetary outlook. It’s been a while since we’ve discussed this part of the world, so we endeavor to give a broad overview. I recommend checking out the links below for more information as well.
Of course, we also cover upcoming events for the Fed with their rate decision coming on May 4th, concerns over CPI and GDP in the US, and talk about how bitcoin fits into this revolutionary era.
Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.
The first few minutes of the podcast we cover economic matters occurring in the US. The Federal Reserve is coming out with their rate decision on May 4th and it is expected to be 50 bps. We do not expect any surprises in this regard at the time of writing, but we’ll find out very shortly. The consensus view according to CME’s FedWatch tool is 99% that we will see a 50 bps hike, to a range of 75-100 bps on the Fed Funds rate.
CPI for April is also due out on the 11th, which is more likely to be a surprise than the Fed Funds decision. We think the CPI could unexpectedly drop following the weak Q1 GDP numbers from last week, showing a -1.4% GDP growth.
China’s economic troubles started long before the recent Shanghai lockdowns, but the regressive pandemic policy will only serve to exacerbate the problems. After a brief 2 days of zero and hope that the end of lockdown was near, new omicron cases outside quarantine have once again been detected in the besieged city. These new cases have occurred in areas where lockdowns were less strict, so we could see a total reversal from a light at the end of the tunnel, to an increasing the strictness of the lockdowns.
Economic numbers out of Shanghai and China are horrible. Freight traffic in Shanghai is down 81% YoY for the last 3 weeks, and freight traffic in all of China is down 15% in the same period.
Many of the results of the lockdown have not yet hit consumers. Ships that left the area days before the lockdowns are only now completing their round trips. That means delays on orders, parts, and products will become much more noticeable.
Far from ending, lockdowns are spreading. 46 cities in China now have some form of restrictions, totalling 340 million people and nearly 80% of their economy. Beijing itself is bracing for Shanghai style lockdowns as 2 days of city-wide testing is causing residents to stock up on food and limit daily travel to areas closer to home. They don’t want to be caught unprepared if Beijing institutes rapid lockdowns like in Shanghai where some parts of the city only had a matter of hours to comply.
We cannot trust CCP economic numbers, but we have some private statistics that in the same ballpark. For example, Caixin’s Purchasing Managers
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In this episode of the Fed Watch podcast, I play the important clips from the IMF roundtable that we talked about on FED 90. CK and I talked about them on the livestream, but were unable to play them directly for you. So, here they are with a bit of commentary to guide the episode.
Our original episode goes into much more depth on each of the points raised by Jerome Powell and Christine Lagarde. In general, this event was meant to convey a specific message of unity and control by our overlord central planners. However, CK and I stress all the places where that messaging misses the market, and also how bitcoin fixes this.
Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.
That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please SUBSCRIBE, and REVIEW on iTunes, and SHARE!
Written by Ansel Lindner
Economist, bitcoin specialist, and author of the Bitcoin Dictionary and the free weekly Bitcoin Fundamentals Report. Find more from Ansel at the bitcoinandmarkets.com
In this episode of the Fed Watch podcast, CK and I discuss our thoughts on the “IMF debate” that took place on April 21, 2022 between Fed Chair Jerome Powell, ECB President Christine Lagarde, IMF Managing Director Kristalina Georgieva, Indonesia Finance Minister Sri Mulyani Indrawati, and Barbados Prime Minister Mia Mottley.
Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.
First, I must preface my write up by saying this was not a debate at all. These financial bureaucrats were simply using this forum to get their message across to the people of the world. They all basically agreed on the major points, that being, inflation is high and we can blame Russia for much of the problem due to supply shocks.
The major theme from Lagarde and Powell was, to get CPI back into their acceptable range of 2%, they must rein in demand in their respective economies, since the driving force of the rise is due to a supply shock.
The medium is the message as it goes. Although this event is meant to portray a united front for the global financial system, we pick out several very important places where Powell and Lagarde disagree once you dig a little deeper.
Christine Lagarde breaks down the components of the high CPI level in Europe by saying 50% of it is due to energy prices, another significant portion is due to food prices, and only a small fraction of CPI, 2.9% to be exact, is what is called “core CPI”. I know that most people in the bitcoin space don’t accept the importance of core CPI and think it is a scam to hide actual inflation. But in this case, Lagarde has a point. Most of Europe’s price increases are due to a self-imposed supply shock.
Chair Powell talks about CPI in the US differently. He acknowledges the supply shock aspect, but his main view of the supply side of things is that the US economy is red hot and very tight. He mentions the labor market multiple times, claiming supply cannot keep up with rising demand, as opposed to Europe where supply is being cut relative to demand.
CK and I react to these two viewpoints of the central bank chiefs.
Another very important exchange from the IMF roundtable we emphasize is when the moderator asks about the decline in globalization. Powell says that it is quite possible that we see a reversal in globalization, while Lagarde “pleads Europe’s case” for a mere revisiting of the terms of trade.
I think this exposes a fundamental difference between these two economies, and in the podcast we take time to detail this out more in depth. Suffice it to say in this write up, the US is more self-sufficient and ultimately less concerned about the fate of globalization than Europe. Europe is beholden to the global economy for customers and for energy inputs.
Being a bitcoin show, CK and I ta
In this episode of the Fed Watch podcast, I give a big update on central bank related news from around the world. It’s been several weeks since we’ve done a down and dirty update on material from the monetary world, so there is a lot to cover. Listen to the episode for my complete coverage. Below, I summarize Federal Reserve related headlines and their upcoming FOMC meeting, CPI and inflation expectations, Europe and the ECB’s dilemma, and lastly, China’s horrible economic issues.
Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.
Financial headlines have been awash with Federal Reserve Presidents and Governors trying to outdo each other in their calls for rate hikes. The most recent is from President Bullard of the St Louis Fed, calling for a 75 bps hike and up to 3.75% on the Fed Funds rate by the end of the year!
Powell is speaking in front of the Volcker Alliance meeting via pre-recorded remarks and appear live to the IMF on Thursday April 21 (I got the events mixed up in the podcast). I expect discussion of the global CPI situation in relation to different countries’ monetary policy. We should get some insight into Powell’s view of the current global economy in these remarks, more than the typical “the economy is expanding at a moderate pace” vanilla comments we usually get at the FOMC pressers.
The much anticipated next FOMC meeting is scheduled for May 3-4. The market is saying that a 50 bps hike is likely, so anything less than that would be a dovish surprise. Up to this point, the Fed has only raised rates once by 25 bps, yet the onslaught of calls for rapid and large rate hikes has made it seem as though they have already done more.
The Fed’s main policy tool is forward guidance. They want the market to believe that the Fed is going to hike so much they break something. In that way, the Fed economists believe they will tampen inflation expectations leading to lower actual inflation. Therefore, all these outrageous calls for extremely high Fed Funds rate by the end of the year are meant to mold your expectations, not actual prescriptions for monetary policy.
The next segment of the podcast is all about inflation expectations. Below are the charts I go over with some simplified commentary.
Source: FRED
Above, we see the CPI year-over-year. The most recent number is 8.55%, however, in April we are entering the YoY space of the acceleration of CPI last year. April 2021’s CPI jumped from 2.6% that March to 4.1%. That means we will need to see similar acceleration in prices between this March and April, which I do not think we will get.
And the rest of the inflation expectation metrics below do not agree CPI will continue to worsen (for the US).
In this episode of the Fed Watch podcast, CK and I had the privilege to chat with Matthew Pines from the Bitcoin Policy Institute. He recently wrote the fantastic and comprehensive Bitcoin essay for policymakers and the general public, Bitcoin and US National Security: An Assessment of Bitcoin as a Strategic Opportunity for the United States. Our conversation focused on a summary of the essay, digging deeper into quality vs quantity adoption, stablecoins, ways nations view CBDCs differently, and we end with talking about the Federal Reserve and their predicament right now over rate hikes with an inverted yield curve.
Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.
We started out by discussing who was Matt’s target audience and did that affect the structure of the paper. I was curious because it is very comprehensive, covering bitcoin’s technical mechanics, recent monetary history, and then ways bitcoin could be used to the strategic advantage of the United States.
Matthew Pines responded that he anchored the structure of the paper around Biden’s recent executive order. As people are taking a closer look at these topics, and as they are writing reports themselves in response to that order, Matt wanted to give them an analytical primer and a summary of how bitcoin can address the concerns specifically of the administration about national security.
Next, we get into some specifics from the report. He mentions that 16% of US adults own bitcoin/cryptocurrency. However, this is an overall figure and doesn’t speak to the quality of that adoption. For instance, it could be a lot of gamblers buying scam tokens on Coinbase. I wondered if he had insight on adoption by the politically powerful, i.e. business leaders, government officials, influencers, millionaires and billionaires. In essence, I asked Matt to speculate based on his unique knowledge set.
Matt has a great line, “the power of selective high-value orange pilling can’t be overstated.” He says that is kind of what we all want, but it can turn out badly. He also warns against concentrating too much on politicians. In other words, let bitcoin’s incentives do the work.
Staying on the policy front for one more question, we ask if adoption is closing the window for possible devastatingly bad policy decisions. If 16% of the public own bitcoin now, how much will that be in 1 or 2 years? If 50% of people own bitcoin, and most of the politically influential class own bitcoin, does that make it nearly impossible to get bad policy? Once again, asking him to speculate on this question.
Matt’s answer is very constructive. He points out that the window of policy is moving in a positive direction, citing Senator Lummis’ recent work. He makes the distinction between the legislative and executive branches and says each have a different relationship to policy. The lawmakers are obvious, but an average employee of the executive branch could perpetuate misunderstanding because
In this episode of the Fed Watch podcast, I cover topics we were unable to cover on the weekly livestream. I go back over the importance of the Sarah Bloom Raskin withdrawal, what the Fed is thinking by signaling hawkish policy so aggressively, and do a deep dive into the emerging food crisis that could result in a continental scale famine.
Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.
I mentioned Sarah Bloom Raskin on the previous episode but here I go back over that thread and try to make it crystal clear what I think her withdrawal of her nomination tells us about the real power politics at play.
Raskin is a progressive globalist who believed in using the central bank to further a Davos agenda. It didn’t work. I think it makes the distinction between Team Fed, including Powell and Wall St. versus Davos globalists (Dems, Neocons, and European project people) perfectly clear.
Next, I introduce the concept of the Fed credibly promising to be irresponsible, this time on the hawkish side. In 1998, Nobel Prize winning economist Paul Krugman, said of the Bank of Japan’s inability to stimulate out of a stagnant economy what they needed to “credibly promise to be irresponsible”; go big or go home. The Federal Reserve is now attempting to be irresponsible in the reverse direction.
The Fed will come right out and say that their policy works through inflation expectations. Typically, they talk about how much QE they will do, in an attempt raise expectations of inflation, that makes people act as if inflation were higher, manifesting that inflation in the future. Right now, it seems as if they are trying the reverse.
Ask yourself, how would the Fed lower inflation expectations? They have to act hawkish, and talk about raising interest rates and QT. That is what we are seeing now. Everyone sees the yield curve inversions happening. They know the world is sliding into war and deglobalization, two things that make people expect higher prices in the future. They have to attack those stubborn inflation expectations with very hawkish rhetoric in order to tame those expectations back to “normal”.
In this section, I walk through the images below to explain the yield curve, the inversions right now, and what they mean. I’m not sure if there will be a video version of this episode on Bitcoin Magazine’s YT channel.
In the last section of the podcast, read through an article with the headline: War in Ukraine sparks concerns over worldwide food shortages from France 24. In it they point to the wheat shortage from the war in Ukraine that is already causing food shortages in North Africa.
The UN Food and Agriculture Organization (FAO) estimates that an additional 8-13 million people worldwid
In this episode of the Fed Watch podcast, CK and I are joined by Benjamin Dicktor. He’s a trucker and bitcoiner who has been intimately involved in the Canadian peaceful protest earlier this year. We got an update on the donation status, the individuals’ legal status, and what bitcoin can do better to face similar attacks in the future. After that we roll into a Fed Watch update, talking about the Fed rate hike and increasingly aggressive and hawkish tone from Powell. Lastly, we cover the Russian sanctions from a different angle, but pointing out the growing clash between Wall Street and the Davos crowd.
We ran out of time before getting to all the Fed Watch specific news, so stay tuned for a mid-week episode!
Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.
After getting an update on the situation in Canada, the first question we ask Benjamin is how all of these financial attacks have affected Canadians’ trust in the financial system in general. His answer is very practical. He points out that the Bank of Canada has printed more as a percentage of GDP than the Federal Reserve, but from his point of view is that the vast majority of the public simply is ignorant of the monetary system and what is needed is more education. As people get more educated that is all the more bullish for bitcoin.
Dichtor then lays out the mechanics behind these financial attacks. They happened on three levels, the municipal, provincial and federal. On the provincial level, the attorney generals went after the banks to freeze all proceeds of the fundraisers as illegal in some way. Then they went after people’s whole finances by freezing banking services. Benjamin says that it wasn’t enough to freeze the specific donations, they de-banked people in an attempt to starve them out.
I follow this up with a question about what can the bitcoin space, with its open source ethos and entrepreneurial spirit do or build that would mitigate these types of attacks in the future. His answer is two fold, one is narrative and the other is integration.
For the narrative, Benjamin thinks it’s important to market bitcoin uses instead of its technical capabilities. “People don’t know how their car works, but they still drive it.” Marketing bitcoin as a hedge against overzealous authorities as a way to protect your rights is more important than explaining why and how it’s better money. On the integration side, Benjamin leans toward the Bitcoin Beach model down in El Salvador. Getting fuller integration by packaging it with business opportunity.
Since this is a central bank oriented show, we next make a hard pivot into Fed news. First and foremost on that agenda is the Fed’s rate hike. Last week, the Fed raised its target Fed Funds Rate up from 0-0.25% to 0.25-0.50%, in the first hike since 2018. Along with the hike came more aggressively hawkish language about further hikes, even a 50 bps hike soon, and beginning Quantitative Tightening as early as May.
In this episode of Bitcoin Magazine’s Fed Watch podcast, CK and I welcome a special guest, Luke Gromen. Luke is founder and President of Forest for the Trees (FFTT) LLC, where he provides clients with macro insights and investible analysis of the global financial system. In this wide ranging conversation we dive deeply into Russia, gold, oil, the shadow banking system, bonds, you name it, we probably talked about it on the episode.
Fed Watch is a podcast for people interested in central bank current events and how Bitcoin will integrate or replace aspects of the aging financial system. To understand how bitcoin will become global money, we must first understand what’s happening now.
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We start off the show (after an awkward intro by me that Christian rescues) with Gromen giving a summary of his model for viewing the current economic landscape. He points to two widely held misconceptions that have created the situation in which we find ourselves: 1) The value of the petrodollar is the dollar, instead of the petro; and 2) thinking debt doesn’t matter. These are things people believe, but are in reality the opposite.
I try to clarify the origins of these misconceptions, but do so badly. I believe that those misconceptions are due to the system in which they arose. In the long history of the post-WWII era, however, they were not misconceptions. The value was in the dollar of the petrodollar and US debt didn’t matter. They only became wrong as this era is ending. So, what I was wondering was did these misconceptions cause the end of the era or did the end of the era cause the misconceptions to become wrong.
In this part of the podcast, Luke dives deeper into the tweet that prompted this interview, about Russia perhaps weaponizing gold, and as a response, the US weaponizing bitcoin.
There is a fragile gold market out there of unallocated gold trading, centered on the LBMA and COMEX. Luke’s contention is that if Russia wanted to, they could simply declare that they will sell oil for gold and that could crash these markets and instantly transform gold’s market cap to a size able to handle the world's financial clearing.
According to Luke’s interesting thought experiment, this move toward a petro-gold standard would lead to fewer US securities being held in national reserves around the world and lead to a multi-currency trade network.
One of the things we could expect, if the theory about a multi-currency future was correct, is for the dollar index (DXY) to fall relative to other currencies. However, over the last couple of weeks, the dollar has exploded higher, reaching 99.4, the highest since May 2020. It is a level of strength the dollar has only achieved for a few months in the last 5 years, mainly during that brief period in early 2020.
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