Bitcoin, gold hit record highs: Fed smells crisis

Original: Liu Jiaolian

The moon is cold on the river in the clear night, and the beauty's smile is worth a thousand gold.

On March 8th, Goddess’ Day, the market for Bitcoin BTC was full of sincerity. At 23:00 UTC+8, the price reached a maximum of 70,000 U.S. dollars!

After briefly falling back to 66k, it pulled back and continued to climb.

At this moment, it seems that there is only one direction left, and that is upward!

In the "Risk-Free Way to Outperform BTC" on March 7, the macro overview section quoted a picture of a gold box breakthrough . Update: Gold has touched $2,200 on Friday, continuing to hit a record high.

Look further away. This historic cabinet breakthrough not only breaks through the 2023 cabinet, but also the 4-year cabinet built since 2020.

A breakthrough of this level is by no means simple!

Gold, since the disintegration of the Bretton Woods system in 1971 and the de-anchoring of the US dollar from gold, has soared from $35 to $2,200.

To put it another way, the US dollar has depreciated relative to gold by as much as (35-2200)/2200 = -98.4%! This was achieved despite the fact that the United States, the world’s top hegemon, has suppressed gold for a century!

Readers who are not familiar with the story of gold may wish to review the 2023.9.28 article "Gold, Gold" by Jiaolian.

And BTC is also following gold and is on the road to the moon by breaking through the 4-year box. As shown in the figure below:

The strangest thing is that everything is completely silent. Everything seemed calm. But the calmer the situation, the more eerie the feeling is.

There is nothing particularly positive or negative about the macro background. However, the price seems to have broken away from the macro guidance and just keeps rising.

Rise for no reason.

It’s like if God throws a person into a corner of the earth, he will find everything to eat, eat it, and then continue to grow and multiply. .

That powerful and exuberant inner vitality!

Jiaolian often says that all indicators are lagging indicators of price.

On the other hand, price is a far leading indicator.

I can’t help but think of the wonderful sentence describing information in Eric Hughes’ “Cypherpunk Manifesto”: “Information is the brother of rumor, it is younger and stronger; Information is Rumor's younger, stronger cousin; Information is fleeter of foot, has more eyes, knows more. , and understands less than Rumor.) (For the full text, please refer to Liu Jiaolian’s 2019.9.29 article "Bitcoin’s Cultural Type and Its Historical Position")

The price is a Price is a kind of information. It even ran faster than the rumors. Rumors are often far ahead of the facts and truth, so much so that there is much ridicule on the Internet. Rumor is an abbreviation for "far ahead of prophecy".

As early as March 2, the internal reference of the teaching chain "Surprise! Gold and copycats are flying together! What's the mystery? "", Jiaolian uses four words to describe this feeling of being divorced from the macro and rising without cause: "undercurrent".

The internal reference of the 8-day teaching chain "The dollar is down, gold is up, and the pie is sideways" wrote that Federal Reserve Chairman Powell said at the Senate hearing on Thursday, "We are not far away from having confidence in a rate cut." Mester, an executive member of the Federal Reserve's 2024 FOMC Committee and President of the Cleveland Fed, said that the Federal Reserve should be able to cut interest rates later this year.

Of course, they still did not forget to add the disclaimer: if more data shows that the inflationary easing is sustainable.

In any case, this is the time when the Federal Reserve started to cut interest rates.

Jiaolian said in Jiaolian’s internal reference "Internal and external factors that continue to put pressure on the crypto market" on January 23 that in the 2023 Silicon Valley Bank bankruptcy incident , the BTFP assistance tool launched by the Federal Reserve to rescue the market is about to expire in March.

Delicate moment.

On the one hand, the Federal Reserve firmly expressed its confidence that BTFP does not need to be renewed, but on the other hand, it began to cut interest rates.

The Federal Reserve should see more clearly than most people in the world how critical the situation is under the calm sea level.

But I don’t want to mystify the Federal Reserve’s superpowers and say that the Federal Reserve can see things that ordinary people can’t see at all.

The Federal Reserve is nothing more than a bureaucracy.

Since it is a bureaucracy, it is more like a machine and a tool man.

The more it performs its duties, the more it loses the complex human response and degenerates into a paramecium-like conditioned reflex.

Just like the gentlemen at the FOMC interest rate meeting who stare at inflation and employment indicators all day long to make decisions.

Individual investors are more humane than institutions. Therefore, it is inevitable that the "simplicity" of the institution will be mystified. As the following interesting story shows:

There was a curved road at the foot of a mountain. Not long ago, a serious car accident occurred, killing two people. bereavement accident. The location of the accident happened to be a tall light pole.

One ​​day, Serena Williams’ mother drove Serena Williams through a curve. The road was empty except for the white clouds.

Just as the car was driving near the light pole where the car accident occurred, Serena, who was sitting in the back seat and looking out, suddenly said loudly: Mom, Mom, there is something above Two people!

Serena Williams’s mother suddenly remembered the car accident not long ago, and remembered the folk rumors that children can see things that ordinary people can’t see. She couldn’t help but feel horrified, and quickly stopped her. Wei: Stop talking nonsense, there is no one here!

Everyone must know the ending:

After returning home, Serena’s mother thought more and more I became more and more frightened, so I told Serena Williams’ father what happened.

Serena's father drove his mother and Serena to the corner again, got out of the car and checked the situation.

Serena Williams’s father asked Xiao Wei, where are the two people you mentioned?

Serena Wei pointed towards the hillside in the distance and said: Those two people are up there!

Big words: Forest fire prevention is everyone’s responsibility!

The story is over.

When we heard Xiaowei’s child say that there were two people above, we thought of the dead in the car accident and saw the forest fire prevention. They were two completely different world view.

How we understand the world determines how we transform the world. To take a step back, it at least determines how we react, seeking advantages and avoiding disadvantages.

If the world view is wrong, the understanding will be deviated and the actions will be wrong. Actions aimed at profit have tended towards harm. The practice of avoiding harm actually avoids benefit.

Investment is the top behavior of seeking profits and avoiding losses.

It is difficult for an investor to create a correct worldview by only getting news from the media and self-media.

Media and self-media are traffic businesses. The essence of the traffic business is to cater to the public's emotions.

Existence is just to cater to public sentiment and gather traffic.

Investment means going against the public.

Excitingly look for opportunities when the public is pessimistic, and quietly profit from the market when public optimism is high.

Output that caters to public sentiment is of no value to investment.

If you haven't seen through this level yet, it means that you still need to continue to practice on the road to becoming a qualified investor.

A qualified investor must be able to distinguish clearly from the complicated information, which ones are talking about "dead people in car accidents" and which ones are talking about "dead people in car accidents" Forest Fire Prevention”.

If you cannot distinguish clearly, you will inevitably be misguided and go astray.

Between August and September 2023, Jiaolian wrote a macro trilogy: "Man-made Prosperity: The Great Transfer of Wealth" (2023.8.21), "Geshan Fighting the Bull: The Great Financial Collapse" (2023.9.19), "Huashan Sword: The Final Battle" (2023.9.22).

Write down what the teaching chain has seen: In today's world, two masters are competing for their internal strength from a distance, and they are in a stalemate, refusing to give in to each other.

This side wants to defeat that side from across the mountain. That side also wants to defeat this side across the mountain. So the two parties worked together to push the mountain higher.

Just like squeezing a balloon with both hands, the balloon turns into a disk and its diameter is squeezed larger.

Another example is the movement of tectonic plates. When two continental plates collide and squeeze, mountains are extruded on the surface.

This mountain is gold and electronic gold - Bitcoin.

People are strategic allies and a united front to fight against enemies across mountains."

"And all those who participate in this united front will benefit from the substantial increase in the assets in their hands. And benefited from the failure of the Federal Reserve and the collapse of U.S. finance again."

On September 19, 2023, BTC was worth $27,000 and gold was worth more than $1,900. .

Today, March 9, 2024, BTC is worth $68,000 and gold is nearly $2,200.

The first half of the sentence "Assets have risen sharply" has come true. Let’s wait and see the second half of the sentence “Fed failed.”

We all know that technically speaking, the US financial system will not collapse and the Federal Reserve will not fail because it has the super power to print unlimited money.

Even a super black swan like March 2020 can be revived by the Federal Reserve’s emergency unlimited QE.

However, everyone also has a scale in their heart.

Everyone knows very well how the Fed will capitulate and raise the white flag.

Once the Federal Reserve smells the precursor to a financial collapse, it will open the floodgates and massively rescue the market, thereby declaring the Fed's failure.

The U.S. dollar circulates, and liquidity tides rise and fall. Cutting interest rates and releasing water will push up the profits of asset bubbles. Raising interest rates and collecting water will burst the bubbles, and then cutting interest rates and releasing water will harvest fractures at low prices. Assets, pushing up asset bubbles and selling them at high levels, repeating the cycle with repeated attempts. Readers who don’t understand can read the 2023.9.4 article “The Vampire Attack of the Dollar” on Jiaolian.

But in the 2007-2008 round, the dollar failed. The interest rate hikes and water collections blew up his real estate subprime loans.

The Federal Reserve hesitated for a moment, and a financial tsunami swept the world.

The Federal Reserve quickly capitulated, ushering in an era of quantitative easing.

Satoshi Nakamoto, a god descended from heaven, happened to be inspired and invented Bitcoin in 2007-2008.

Bitcoin provides the world with a tool to "exit" the dollar game.

At that time, the East cooperated with the West.

Return the U.S. dollars to the United States in exchange for a lot of U.S. debt.

Wealth goes west, debt goes east.

4 trillion, after all, it was the industrious nation far away across the ocean that silently endured everything and saved Wall Street, which had ruined everything.

At this moment, the East no longer cooperates with the West.

After ten years of sharpening a sword, I have never tried the frost blade. Today I am showing you to you, who has any injustice?

Throw U.S. debt into the Pacific Ocean and lend dollars to poor countries.

Borrowing the classic line from "Let the Bullets Fly":

Brothers: Big brother, Who are the poor countries?

Zhang Mazi: Whoever is poor is a poor country.

Master Huang: Green dollars are being distributed to poor countries, what a sin!

This round, Mr. Huang’s interest rate hikes and water collection did not burst the bubble-collapsed poor countries, because Zhang Mazi lent the U.S. dollars he had accumulated in the past ten years to them.

Zhang Mazi will lend as much water as Mr. Huang takes away.

Wherever there is a shortage of water (USD liquidity), there will be rain (lending).

Master Huang's water pump has been running for two years, but it has not pumped any poor country to death, but he can no longer bear it.

After all, among the patients suffering from dollar liquidity hunger in the world, the one who is the most seriously ill and terminally ill is Mr. Huang himself!

The United States itself is the one with the most debt. (Refer to Liu Jiaolian's 2023.10.10 article "Palestinian-Israeli War, Fed Surrenders")

Just as Jiaolian's 2023.11.17 article "Double Helix of U.S. Dollars and U.S. Debt" As analyzed in "Small-Scale Preview of System Collapse":

"When the size of the U.S. debt was still relatively small, the U.S. dollar-U.S. debt double helix, through internal and external The two pipelines pump water and extract value, and the operation is relatively stable.

"However, when the scale of U.S. debt expands rapidly and exceeds 33 trillion US dollars today, High interest rates have also become an unbearable burden.

"The huge debt scale and interest payment pressure, coupled with the fact that not only cannot we withdraw money internally, but we have to pay for Ballot helicopters dispersed money, and external reliance on the U.S. military to harvest value also encountered obstacles, making the double helix somewhat unsustainable.

"So, once cleverly The tide of MMT (Modern Monetary Theory) and the US dollar is now in danger of decelerating and reversing, turning into a death spiral."

The world is quietly changing. Got a new look.

The U.S. dollar is also divided into U.S. dollars and offshore dollars.

Master Huang has the final say on the U.S. dollar.

Offshore U.S. dollars, Zhang Mazi has the final say.

Don't you see, Mr. Huang wanted to start an exchange rate war last year, but Zhang Mazi stopped him. (Refer to reading Liu Jiaolian's 2023.9.12 article "Beat the Short Sellers")

From September last year when the central government made the announcement, until today in March 2024, half a year has passed. , CNH keeps a close eye on USD. No matter how the U.S. dollar index fluctuates, USD/CNH is nailed to 7.2 and remains motionless.

Stay firm on the green hills and never relax, your roots are still in the broken rocks. It has endured thousands of blows but is still strong, regardless of the winds from east to west, north and south.

From the moment when the two peerless masters decided to discuss swordsmanship in Huashan Mountain and decide who was the best, the battle was completed across the mountain, gold and electronic gold BTC The surge has become inevitable.

"There is a legend about "Nuwa patching up the sky" in mythology. Silently dumping U.S. debt, hoarding U.S. dollars, and engaging in counter-cyclical adjustments. The United States tightened and I relaxed. When the U.S. dollar leaves, I will fill the hole, de-leverage the U.S. dollar (around the world), and turn it into a gentle, elegant and harmonious deleveraging, comparable to Nuwa filling the sky in the new era." (Yu Chu Liu Jiao Lian 2023.10.26 Article "The U.S. dollar seeks benevolence and gets benevolence")

At this moment, the U.S. dollar seeks benevolence and gets benevolence.