In spite of a year of rate hikes from the Federal Reserve. CPI inflation went from 1.4% to 9.1% and then back down to 7.1%. Meanwhile, the Fed Funds Rate jumped from 0.8% to 4.25% currently. This means that the Fed has to pay that rate on reverse repo transactions when it is buying treasury bonds so that the commercial banks can maintain liquidity. This next chart shows interest payments per month as a Federal expense:
Thus, on a longterm basis. How can the Fed control interest rates through rate hikes for much longer? One of two things have to be true. Either, the Fed has to pivot, and reduce rates in early 2023. Or, they are actually performing a controlled demolition to the monetary system. Either could be true.
There are two sides to this. Globalist and Nationalist. We have written enough blogs about FTX to convey that they were controlled and funded by Globalist interests, and were helping the DNC launder money through Ukraine. There will be more proof of this coming out in the future:
On the Nationalist side there are the BRICS nations who have come out with there own reserve currency backed by a basket of precious metals. XRP enthusiasts think XRP will be the crypto currency that will be used as a bridge from Gold to each BRICS nations currency. However, XRP is 100% centralized and controlled by a small group of people. Bitcoin is controlled by every miner and every node operator. There are millions of them. Bitcoin is open source. Which is the only way to have a digital currency. Open source on a public ledger.
Here is more proof that the actual countries involved in this BRICS reserve currency are considering Bitcoin, not XRP. Russia, and China are two of the largest Bitcoin Whales. This is well established! The Bank of Russia deputy chairman said this, after a vote to approve Bitcoin for payments.
“We are looking for opportunities to use Bitcoin, and Crypto in cross border payments”.
As we have already announced in previous blogs, many countries are intending to join BRICS, now it is up to 14 additional countries:
So, whether BRICS does use Bitcoin for cross border payments or not. Whether the Fed pivots and lowers rates, or keeps raising rates.
Are you going to use a currency that is secure, and decentralized out of the reach of central banks, and governments, as long as you store it offline? The central banks are threatened by BRICS, and Bitcoin. Not to mention Gold and Silver. They attack all of these, and that will not end soon. Will you keep using commercial banks that do not have to honor the FDIC insurance of up to $100,000 in deposits, if they have a bail in, using depositors money to bail out the banks? If rates keep rising, bank runs will start happening. We cannot predict how this will all unfold. We do know the liquidity of commercial banks is in question, we just don’t know if the Fed will pivot as they have done in the past. Either way, having a currency that is decentralized, beats any centralized currency. Regardless of how scarce it is.
The lows Bitcoin is seeing now, should be the lowest range it trades in this cycle. First, we saw a double bottom over the last two weeks:
Then, we saw a MACD cross that was confirmed. If the blue line on this chart below stays above the orange line through 12/31/22, the MACD cross is confirmed beyond the 12 day chart, which confirmed on Saturday. The 12 day MACD cross has never had a fake out since 2009. The cross signals the bottom is in for Bitcoin! It is 4 out of 4 on this indicator since 2009. See the chart below:
The closest thing to a fake out was 2019 when Bitcoin only climbed 33% before reversing again. However, we know it climbed again in 3/2020, and that was a 1300% bull run until 11/2021!:
There is a lot, swirling around right now. XRP is going to beat out Bitcoin for the BRICS reserve currency. Bitcoin is going to $3,000. Even going to zero. We have heard it all. The fact remains, Bitcoin is the fastest growing asset on Earth since 2009, and nothing has come close to surpassing it. We say, the reason is, it’s truly a scarce, and decentralized asset. The other crypto currencies like XRP, or ETH are NOT decentralized. They are not scarce either. Obviously, the US dollar is the definition of centralized, and it gets printed adnaseum. Gold, Silver, and Bitcoin are the only viable options. Perhaps land, art or classic cars would help to hedge inflation. We are witnessing currency wars, and these can be prolonged and they can bleed into other areas. Inflation will get worse, hedging it and staying decentralized are going to increase in importance. The only question is, what will be the catalyst to start that ball rolling? We are not financial advisors and this is not financial advise. Stay decentralized and focus on scarcity. Your currency will do well if you do those two things. Bitcoin is the best at both of those.
Neutral ATM is here to get everyone off of zero Bitcoin.