The turning point of financial war: from interest rate war to public opinion war

Original: Liu Jiaolian

Overnight, BTC quickly approached the key resistance level of 64k, which is the 30-week moving average. The big event last week was the unexpectedly large interest rate cut by the Federal Reserve, and the unexpected lack of interest rate cut by our central bank. On Friday, Jiaolian dissected the wrong arguments of some people who were pessimistic about RMB, and pointed out that if the US cuts but I don’t, it will be beneficial to guide the US dollars stranded overseas to flow back to China:

"As a major foreign trade country, enterprises will remit USD, which will form foreign reserves. The central bank will issue RMB in the country and give it to enterprises. This is foreign exchange settlement. If enterprises are greedy for the high interest rate of USD and slow down foreign exchange settlement, then there will be less RMB issued in China."... "Now the Federal Reserve has begun to normalize interest rates. The interest rate gap has narrowed, and the capital stranded overseas will have to 'It has gradually flowed back. " "Once the USD flows back and is settled, the central bank will issue RMB in return, and domestic liquidity will be abundant. Everyone will feel that they are not short of money, and life will be better. "

When the financial war reached the critical turning point when the Federal Reserve surrendered first and started to cut interest rates, some financial bloggers could not wait to ignore the facts and sang that the RMB would continue to weaken against the USD, or criticized the central bank for this move, saying that it was out of "selfishness" to protect banks, without considering the interests of foreign trade companies and house slaves. What a big joke. Foreign trade companies should do business honestly, and they should settle foreign exchange on time and normally. Using the foreign exchange earned to make money in US dollar assets is speculation, which is called "not doing business properly." Speculation requires self-responsibility and willingness to accept defeat. This is basic ethics. Who has the right to complain?

This is the turning point and new stage of the financial war. When the Americans have the power to do something to you (e.g., by raising interest rates crazily), they are too lazy to argue with you. Only when they are not powerful enough (e.g., they have to cut interest rates), they will start to engage in public opinion warfare and psychological warfare.

So last night, the teaching chain pointed out clearly that the financial war has entered a new stage, "If the big guns don't work, the mouth guns will make up for it, and the public opinion war will be carried out."

If you don't believe it, just wait and see! During the period when the Fed's interest rate cut channel is running, there will definitely be a lot of moths in the public opinion battlefield, instigating a large number of people with titles and names that are so dazzling that people can't open their eyes, such as financial bigwigs, economic experts, high-end financial practitioners, etc., but in fact, it is unknown whether they are real or fake, to sing against the central bank's policies in public, trying to encourage the masses who are unaware of the truth and whose interests are damaged, such as stockholders who are stuck in stock speculation, house slaves whose houses are falling in price, bosses whose companies are bankrupt, etc., to guide them to blame the country and policies for their own suffering, rather than blaming their own speculation and leverage.

The teaching chain also has stocks stuck, houses floating losses, and has truly experienced the mess of corporate bankruptcy and liquidation, but the teaching chain will not complain about the environment, which is useless. Cowards will complain about the environment, and giant babies always blame others. Only the strong dare to bear the consequences, change themselves, and seek breakthroughs.

People who lack this kind of self-responsibility and willingness to accept defeat are essentially not suitable for entering the encryption industry. Because here, there is no "mother" who can nurse you when you want to cry. Here we follow the law of the jungle, survival of the fittest. Here we follow the best guidance of the Austrian school: in the stage of leverage liquidation, the best way is to let it go, let it die, and die as it should.

As Jiaolian said in his impromptu speech at the third quarter private board meeting (closed-door meeting) yesterday, internal factors determine external factors, and external factors work through internal factors. Whether the external environment is good or bad, the key difference lies in whether your own strength and inner willpower are strong enough.

If you are strong enough, bad things can turn into good things. The bigger the bad thing, once it is transformed, it will become a bigger good thing. If you are not strong enough, even if good things come to your door, they may turn into bad things. The bigger the good thing, the bigger the bad thing will become.

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On Sunday afternoon (September 22), Jiaolian attended the third quarter private board meeting and made an impromptu speech for 2 hours. The key points of the speech are briefly recalled and listed as follows:

* Looking back on the development trend of the crypto market this year, the focus is on some key changes from the mid-year private board meeting in June to the third quarter private board meeting in September, that is, in the third quarter - echoing the outlook in the December 2023 year-end report:

1. The deterioration of economic data + the collapse of the US stock market forced the Federal Reserve to cut interest rates (verification: employment triggered a recession warning; the US stock market crashed one after another; the Federal Reserve cut interest rates in September).

2. After the ETF was passed (verified) and BTC reached its previous high (verified) at the beginning of the year, pay attention to three major risks: 1. The callback after excessive excitement (verification: the shock and fall back to wash the market since March); 2. Gray rhino, liquidation pressure of Mt.Gox and FTX (verification: the German government liquidated in the third quarter, Mt.Gox completed the liquidation, and FTX is being liquidated); 3. Black swan, US recession, US stock market crash (verification: a small flash crash, no black swan has occurred yet).

3. "Ethereum has not been recognized by the market after switching to PoS", "reducing gas by reducing usage... will cause the value that should have been captured by ETH to be lost to the second layer..." (verification: ETH/BTC has been weakening all the way, and the expansion of the second layer has encountered controversy)

4. BTC ecology, inscriptions have been questioned, it is better to create an L2 outside the original chain, which is specifically used for issuing coins and speculating inscriptions. (Verification: FB chain appears, although it is a side chain, not L2)

5. "The harvesting group may be more torn apart, and the internal struggle will be more intense." (Verification: Trump's assassination)

* In 2024, there is a lack of innovation, and the crypto industry has only two lines: large institutions are engaged in ETFs; small retail investors are speculating on meme coins.

* Don't invest if you don't understand. Just for the word "understand", how much effort is unknown!…Why are IT technology practitioners and financial professionals more likely to doubt BTC?  …The origin and development of Bitcoin, its past and present, the cypherpunk manifesto, the selflessness of Wei Dai, Nick Szabo, Patoshi and Satoshi Nakamoto… At the intersection of several historical threads, the historical inevitability of the birth of Bitcoin…

* From the IMF and the Basel Agreement to the Bretton Woods system and the new global financial order after World War II.The Federal Reserve's balance sheet. Gold. Roosevelt's New Deal. Nixon shock.

* Analyze the BTC cycle. Two-cycle big box theory. Pay attention to BlackRock's layout this year, ETF, options. BTC development big stage theory, why the SoV stage cannot be crossed now. El Salvador's verification.

* Macro cycle thinking. The Fed's actions, the central bank's countermeasures. Interest rate game. Will the US fall into recession or not. Kondratieff cycle. The general background of the Sino-US game. The structural differences between Chinese and US bonds and the difference in solution paths. The turning point of the financial war. Etc. Emphasis on three points:

1. Variables and invariants.

2. Internal and external factors.

3. Don't trade macro factors.

* Looking forward to the three major variables in the fourth quarter:1. The results of the US election; 2. The risk of US economic recession; 3. The Fed stops QT.