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In this episode of the “Fed Watch” podcast, due to common demand, I welcome Tom Luongo again on the present! Luongo is one in every of my favourite writers due to his entertaining prose and deeply refreshing perception on international macro, geopolitics and foreign money markets. He is additionally a long-term Bitcoiner, discussing it for a few years in his writing and podcasts.
“Fed Watch” is the macro podcast for Bitcoiners. In this episode, we begin by getting a giant image view from Luongo on the worldwide scenario, then dive into some specifics about Europe, the U.S., the Federal Reserve, Ukraine and rather more. We wrap up the present speaking about what Luongo sees for the U.S. within the quick to midterm, so, the subsequent three to 24 months. Below, I’ll present a bit extra element on what was mentioned, however this is a must-listen episode!
The Sick Man At The Table
The first query I ask Luongo is, is he as bearish as everybody else? It appears in every single place we glance, individuals are screaming about bear markets and collapse, from macro to geopolitics to bitcoin. However, I believe this collapse narrative is overdone, particularly for the United States. I ask Luongo to give us his broad image of the state of the markets.
He begins in by figuring out the sick man on the desk, that being Europe. Europe is hit the toughest by the forces which have been unleashed proper now: rising commodities costs, rising inflation, lack of confidence in establishments, and so on. As Europe struggles and begins to cannibalize itself, all of the capital in funding portfolios in Europe will finally have to move someplace, and it’ll move to the United States.
The battle that has began in Ukraine is on Europe’s doorstep and, particularly, on the doorstep of the very best economic system in Europe over the past decade: Poland. Luongo asks rhetorically, “Is Warsaw [Poland] or New York closer to Ukraine?” As traders understand that this new battle is not going away — after which battle it with financial weapons as they have been — they should destroy their personal economies. Money will quickly flee Europe to the U.S. I consider that it’s going to additionally move into bitcoin.
The Federal Reserve Is Serious
I ask Luongo if he thinks the Fed will undergo with uber-hawkish fee hikes. His reply eloquently lays out that Jerome Powell’s plan to elevate charges again in 2017 was interrupted by COVID-19, and now Powell is going scorched earth to elevate charges to break the again of each different central financial institution and rival foreign money.
The cause the Fed will do that, in accordance to Luongo, is that the Fed, owned by Wall Street banks and U.S. monied pursuits, is making an attempt to wash out the last decade of malinvestment that’s constructed up because the Great Financial Crisis. He additionally frames it as a fracture within the relationship between U.S. monied pursuits and the globalists in Europe. We can’t perceive the Fed with out understanding the Davos crowd’s intent to rule the world or burn it down.
According to Luongo, the Federal Reserve will elevate charges frequently till 2024, to break the again of Davos and the novel globalist/communist goals. I have a tendency to agree with him. Perhaps I wouldn’t put it as colorfully as Luongo does, however the globalists are “global communists” and can burn the worldwide economic system down earlier than they admit defeat.
Bitcoin And U.S. Fates Are Intertwined
In the final a part of the episode, I ask Luongo what he thinks about my idea: What is good for the U.S. economic system is good for bitcoin, at this second in time. A majority of the bitcoin provide is seemingly held by U.S. entities, the U.S. has the biggest share of mining, the biggest share of bitcoin individuals, essentially the most enterprise capital cash and a number of the most lax regulation. So, if bitcoin is to thrive in a significant economic system, it is going to thrive within the U.S.
Luongo tends to agree with me on this however breaks it down in additional element, saying there is a section of Wall Street that likes bitcoin, and people are the identical individuals combating Davos. They are planning a SWIFT substitute and are pleasant to proof-of-work cryptocurrency as a result of they have cash in it now, with mining taking off within the U.S.
I can’t cowl all his feedback intimately as a result of what is nice about Luongo is he takes threads from many alternative matters and weaves them collectively right into a refreshing perspective.
After the above trade, we get into Bitcoin’s future with regard to Europe. While we each are comparatively bullish on the U.S. economic system over the subsequent 10 years — and that shall be good for bitcoin — we are additionally each very bearish on Europe — and that, too, shall be good for bitcoin — because it provides European capital a cause to flee into bitcoin.
Again, this is a must-listen episode, with lethal critical matters blended with Luongo’s entertaining storytelling capability.
That does it for this week. Thanks to the readers and listeners. If you get pleasure from this content material please subscribe, overview on iTunes and share!
This is a visitor submit by Ansel Lindner. Opinions expressed are totally their personal and don’t essentially mirror these of BTC Inc. or Bitcoin Magazine.