Watch this episode on YouTube or Rumble
Listen to this episode:
“Fed Watch” is a macro podcast, true to the rebellious nature of bitcoin. In each episode we question the mainstream and bitcoin narrative by examining current events in macro from around the world, with an emphasis on central banks and currencies.
In this episode, Christian Carrolls and I go through several charts giving market updates on Bitcoin, the Dollar Index (DXY) and the Hong Kong Dollar. Next, we examine the deteriorating situation in Pakistan and ask the question, “Is this the next Sri Lanka?” Finally, we discuss the situation in Taiwan/China and I read several important passages, one from Chinese Foreign Minister Wang Yi and the other from think tank expert Wang Wen.
bitcoin and other currencies
We open by looking at the weekly chart of bitcoin. We’ve done this for the past few shows because it’s a good way to anchor our conversation. As you can see below, the price has been very stable, sitting on the fence in relation to the volume-by-price indicator on the right.
If we zoom out, the last period with weekly candles similar to the time of recording was back in September-October 2020, just before the monster rally from $10,000 to $40,000. Of course, we are not saying that it will be the same again, but it is possible.
The Dollar Index (DXY) is the other major currency we see today. I believe it is important to check the dollar almost every episode as it is the main competition for bitcoin.
It seems to have peaked for a while, but there is no indication that it will crash. Instead, the dollar is likely to form a new elevated range above 100 for the next few years. This is similar to how it made a new high from 2015 to 2021.
I would add that a strong dollar is not bearish for bitcoin. Perhaps in the beginning, a strong dollar correlates with a lower bitcoin, but after the dollar stabilizes in the higher range, when bitcoin has traditionally risen.
Below is a screenshot of the Hong Kong Monetary Authority website. Every month they release figures on their foreign exchange reserves, which they use to stabilize their peg. On August 3, 2022, I speculated that maintaining the Hong Kong Dollar (HKD) peg was rapidly depleting their reserves. However, according to this press release, he used only a little over 1% of his reserves to maintain the peg in July. This means that HKD is able to keep the peg (if they want) for many years.
Pakistan on the verge
Pakistan’s developing situation with the recent collapse of Sri Lanka has many things in common. In the podcast, I point to his involvement with the World Economic Forum (WEF). Pakistan has received multimillion-dollar funding to improve its agricultural sector and add national parks.
Another similarity between Pakistan and Sri Lanka is the significant role of Chinese funding in the last decade. Sri Lanka lost control of its major port because they could not pay back Chinese debt and Pakistan is now burdened with about $20 billion in high interest loans to China and Chinese companies.
Pakistan has only two months left in the budget and is desperate for new lenders. The Chinese have turned them down, the Arab states are thinking twice. The only place to turn is back at the IMF – and that means harsh austerity.
Perhaps unsurprisingly, both Sri Lanka and Pakistan are important nodes in China’s Belt and Road Initiative (BRI).
As I have said on several occasions, the BRI is doomed to fail. They are striving to make places and routes economically viable where a long period of history has not already happened on its own. No amount can reverse centuries of culture and epochs of geography.
China’s central planners have once again disrupted an important link in the BRI.
I have been discussing Nancy Pelosi’s situation and the Chinese reaction on my Telegram live stream for several days now.
In this episode of the podcast, I read excerpts from a famous Chinese minister and a Chinese think-tank expert. You can read Wang Yi’s full comments here. Suffice it to say for this article, he repeated “One China” several times and said that the US is trying to change the status quo. He also had very harsh words for the current President of Taiwan, Tsai Ing-wen. He said that he “betrayed the ancestors.” In another translation, I also heard Yi’s original remarks that he had betrayed his ancestors. [and her race],
The next comments I read were from Wang Wen, executive dean of the Chongyang Institute for Financial Studies at Renmin University (RDCY) in China, and executive director of the China-US People-to-People Exchange Research Center. He tries to explain why China’s response was so weak and that China should not provoke an armed conflict with the US unless it can “outperform the US in terms of economic power, compared to the US”. acquire financial and military strength in the U.S. and develop an enormous capacity to counter international sanctions.
Seems too far to me. All I would advise the reader is not to get caught up in sneaky rhetoric about Taiwan and China. He is a disciple of Sun Tzu, who said that “you appear strong when you are weak.” Wen also quoted Sun Tzu.
“A major military conflict with America is not the goal of China’s foreign policy, nor is it the way to a better life for the common people. Remember what Sun Tzu wrote in The Art of War: ‘Until something is achieved’ Do not act until there is nothing to do; Do not use military force without the certainty of victory; Do not go to war unless the situation is dire.”
We wrapped up the podcast, talking about the upcoming Consumer Price Index data release and other things related to bitcoin. Overall, a must watch episode!
It does for this week. Thanks to the viewers and listeners. If you enjoy this content please subscribe, review and share! Don’t forget to check out the Fed Watch clips on YouTube. Like and share videos is the best way for us to reach new people.
This is a guest post by Ansel Lindner. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.