Hey Folks,
Well, here we are at the end of another great week and we’ve got some interesting things to discuss around our little orange friend Bitcoin (BTC) so let’s not waste any time and dive right in.
There have been a couple of things that dropped this week on the economic front. First the revised GDP numbers are in (-0.6%) and…you guessed it and as I’ve already said…we’re in a technical recession. But I don’t think that’s going to be all that shocking to anyone or to the market, for that matter. I believe that recession fact is already baked in. The more interesting thing, I think, is this week’s Jackson Hole FED talk.
As I’m beginning to pull everything together for this week’s OPU edition, it’s Thursday mid-morning and the market is up as the Jackson Hole talks begin. Why is this important you ask? A lot is riding on the FED and Powell’s “tone” as it were. He’s scheduled to speak today but there really are no good answers here. The stated objective of the FED is too slow the economy and ease inflation. They achieve that by further tightening through continued interest rate increases (Hawkish behavior). This makes the cost of money go up and should slow spending. Unfortunately, that also pushes the entire economy further into a recessionary posture.
The alternative is to go in the other direction and remain neutral or even ease rates (Dovish behavior). This will, at least in theory, keep us out of a deepening recession but it virtually assures higher inflation. With so much money floating around in the system and hundreds of billions more seemingly coming every week there’s just no alternative. Remember at its core inflation is too much money chasing too few goods. You just can’t buck basic economic principles. The ideal situation is to get the Fed Fund rate on par with the inflation rate. That means there’s a lot of room to go up before we get there. And rate hikes of that magnitude would likely crush the economy and we could be talking about depression level economic pain. So as stated above there really are no good answers for the FED and the overall economic outlook.
So where does that leave our little buddy Bitcoin (BTC)? Well, we’re down about 7-8% in the last week with the vast majority of that taking place in about the first 36 hours of the week. After that it’s been pretty flat across the last six days or so. That being said, I’m still bullish and accumulating and preparing for the next bull run. Whether it’s in the next 6 months or 2 years I’m okay. The longer we hover around this area the more time I have to stack those cheap sats baby. At my core I’m an economist, that’s why Bitcoin makes sense.
I have buy orders in all the way down to $18,700 just in case. Not telling you what to do, just telling you what I’m doing. Keep your eyes peeled for price shifts as we get these big economic announcements. Things like CPI numbers, FED rate hikes, employment numbers. As well we seem to see big moves with large geopolitical events. And BTC tends to be a more volatile mover on those events as well. In the long run I don’t think it will matter if you got in at $18,000 or $40,000.
In this week’s share Lyn Alden talks about the FED and the inflation vs. disinflation I was mentioning above. She’s super sharp and does a much better job than I do on a little higher level explaining it. Enjoy!!
I’m also going to include a long form interview she did with Anthony Pompliano back on July 30th. In this talk you can really get a feel for how smart she is and they cover a wide range of economic data including BTC. Enjoy
As always please feel free to share this content with anyone you feel will benefit from it. Thanks for your time and attention.
Love to all,
TG