Liquidity Rises as Governments Flood the Financial System!

Summary

The video discusses the global banking crisis, with the Federal Reserve's rapid interest rate hikes causing instability. It highlights Bitcoin's surge and the potential for a short-term retracement, while emphasizing the cryptocurrency's long-term value against a backdrop of government spending and inflation. The script also touches on the possibility of a central bank digital currency (CBDC) and its implications amid economic challenges.

Takeaways

• 🌐 The global banking system is facing a crisis, with governments attempting to stabilize it with temporary solutions.
• 📈 The federal funds rate has seen the fastest increase in history, rising from 0.25% to 4.75% since January 2021, a 1,800% increase from its previous value.
• 💸 Bitcoin has experienced significant growth, with a 70% pump so far in the year, and speculations about its future value reaching a million dollars.
• 💹 Despite the banking crisis, there is an influx of liquidity returning to the markets, as indicated by the Federal Reserve's balance sheet increasing by $300 billion.
• 🏦 Credit Suisse's attempt to borrow 54 billion dollars was overshadowed by UBS's acquisition of the bank for 3.2 billion dollars, signaling further instability in the banking sector.
• 📉 More than 186 U.S. banks are at risk of collapse, according to an article by Cointelegraph, indicating a widespread issue within the financial system.
• 💔 The Federal Reserve's new backstop plan to inject up to two trillion dollars into the system may not be sufficient to address the economic challenges.
• 🇨🇳 China's surprise rate cut to boost banking liquidity and economy, following the reopening from the COVID-19 crisis, adds another layer to the global economic situation.
• 💼 The U.S. government's spending plans, aiming for 6.9 trillion dollars next year and 10 trillion by 2033, coupled with tax increases, may not be sustainable in the long term.
• 📊 A potential bearish divergence in Bitcoin's price chart suggests a possible short-term retracement to the 50 Fibonacci level, which could cause panic among investors.
• 🚀 Despite short-term fluctuations, the long-term outlook for Bitcoin remains positive as the traditional financial system faces devaluation and economic challenges.

Q & A

What has been the recent trend in the federal funds rate since January 2021?

The federal funds rate has increased from 0.25 percent to 4.75 percent, marking an increase of 4.5 percent.

How does the current increase in the federal funds rate compare to historical rates?

This is the fastest increase in history, with the rate rising by 1800 percent from its previous level, which is unprecedented given the low starting point.

What impact has the rapid increase in interest rates had on banks?

The rapid increase in interest rates has led to banks collapsing, indicating a significant strain on the banking system.

How has Bitcoin performed in the context of the banking tsunamis?

Bitcoin has seen a pump of nearly 70 percent so far this year, suggesting it might be benefiting from the instability in traditional banking.

What is the significance of the two million dollar bet on Bitcoin reaching a million dollars?

While the bet is unlikely to happen, it highlights the speculative interest in Bitcoin and the belief in its potential for significant appreciation.

What does the increase in the Fed's balance sheet signify?

The increase by about 300 billion dollars in the Fed's balance sheet in the past week erases the progress made over the past four months, indicating ongoing quantitative easing.

What is the potential implication of the UBS acquisition of Credit Suisse?

The acquisition suggests further consolidation in the banking sector and potential systemic risks, as Credit Suisse was unable to sustain itself with a 54 billion dollar loan from the Swiss Central Bank.

How many U.S banks are reportedly at risk of collapse according to Cointelegraph?

More than 186 U.S banks are well positioned to collapse, indicating a widespread vulnerability in the banking system.

What measures is the Federal Reserve considering to address the banking crisis?

The Fed has put together a new backstop with a scope to inject as much as two trillion dollars into the system to stabilize the banks.

What is the potential impact of China's surprise rate cut on global financial markets?

China's rate cut aims to boost banking liquidity and their economy post-COVID, which could have ripple effects on global markets as they try to get ahead of economic challenges.

What is the government's spending plan for the next few years, and how does it relate to the national debt?

The president aspires to spend around 6.9 trillion dollars next year and 10 trillion dollars by 2033, which, combined with the current national debt of 31 trillion dollars, raises concerns about how this debt will be serviced with rising interest rates and potential recession.

How does the recent discovery of a large gold deposit in China affect the value of gold?

The discovery of a gold deposit valued around three trillion dollars adds to the supply of gold, potentially devaluing each ounce of gold worldwide.

What is unique about Bitcoin's supply compared to gold?

Unlike gold, Bitcoin has a capped supply of 21 million coins, ensuring that no more can be created or found, providing a hedge against inflation.

What technical indicators suggest a potential short-term retracement in Bitcoin's price?

A bearish divergence forming on the four-hour chart, with lower highs on the RSI and higher highs on the price, along with a possible rising wedge, suggests a short-term retracement to the 50 Fibonacci level at about twenty-four thousand dollars.

What upcoming events could influence Bitcoin's price movement?

The debt ceiling limit deadline in July and the Federal Reserve's confirmation of a July launch for its FedNow instant payment service, which is a CBDC, could coincide with market movements and potentially influence Bitcoin's adoption and price.

Outlines

00:00

📉 Financial Turmoil and Bitcoin's Resilience

The script discusses the ongoing banking crisis and the global financial system's instability. It highlights the Federal Reserve's aggressive interest rate hikes, which have increased by 4.5% since January 2021, marking the fastest increase in history. Despite banks collapsing and financial turmoil, Bitcoin has surged by nearly 70% this year. The script also mentions a speculative bet on Bitcoin reaching a million dollars, which is deemed unlikely and undesirable due to its inflationary implications. Furthermore, it points out the Fed's balance sheet expansion, which has counteracted months of progress, and the acquisition of Credit Suisse by UBS. The narrative suggests that more bank collapses are imminent, and the Fed's new backstop plan to inject up to two trillion dollars into the system is introduced. The script also touches on China's rate cut to boost its economy post-pandemic and the US government's spending plans, which are expected to exacerbate inflation and national debt issues. It concludes with the potential shift towards hard assets like stocks, cryptocurrencies, and gold as a hedge against currency devaluation.

05:02

📈 Bitcoin's Future and Market Speculations

This paragraph delves into the potential short-term bearish trends for Bitcoin, suggesting a possible retracement to around $24,000, which would be a 15% decline from its peak. It posits that such a retracement would be healthy for the market. The script speculates on the Federal Reserve's potential policy moves, hinting at a possible pause in rate hikes. It also discusses the upcoming debt ceiling limit deadline and the implications of the Fed's instant payment service launch in July, which could lead to the adoption of a central bank digital currency (CBDC). The paragraph concludes with a warning about the convergence of these events and their potential impact on the financial system, encouraging viewers to consider the long-term outlook for Bitcoin as a hedge against traditional finance and currency devaluation.

Keywords

💡Banking tsunamis

The term 'banking tsunamis' metaphorically describes a series of significant disruptions or crises in the banking sector, akin to the devastating impact of a tsunami. In the video's context, it refers to the ongoing financial instability and the collapse of banks, which is a central theme of the video.

💡Federal funds rate

The federal funds rate is the interest rate at which depository institutions lend balances to each other overnight. The video discusses its increase from 0.25 percent to 4.75 percent since January 2021, highlighting the fastest increase in history, which is a key factor contributing to the banking crises discussed.

💡Quantitative easing

Quantitative easing is a monetary policy used by central banks to inject liquidity into the economy by purchasing government securities or other securities from the market. The video mentions that some argue the recent actions by banks are not quantitative easing, as the money is going into banks rather than directly to the public, but the script implies that the effect is similar, leading to inflation.

💡Inflation

Inflation refers to the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The video discusses how the actions of central banks, such as increasing the money supply, are leading to continued inflation.

💡Bitcoin

Bitcoin is a decentralized digital currency that operates without a central bank or single administrator. The video mentions a significant increase in Bitcoin's value and discusses its potential as a hedge against inflation and traditional financial systems.

💡Debt ceiling

The debt ceiling is the limit on the amount of money that the U.S. federal government is allowed to borrow to cover the budget deficit. The video mentions an upcoming deadline for raising the debt ceiling, which is a critical event that could impact the economy and financial markets.

💡FedNow

FedNow is a proposed real-time payment and settlement service by the Federal Reserve. The video suggests that the launch of FedNow, coinciding with economic instability, could be a catalyst for the adoption of a central bank digital currency (CBDC).

💡Bearish divergence

Bearish divergence is a technical analysis term that occurs when the price of an asset makes a new high, but a technical indicator does not confirm this new high, suggesting a potential reversal in the upward trend. The video discusses a possible bearish divergence in Bitcoin's price, indicating a potential short-term retracement.

💡Fibonacci level

Fibonacci levels are a set of ratios used in trading to identify potential support and resistance levels in financial markets. The video uses the term to suggest a potential price target for Bitcoin if it experiences a retracement, indicating a level where buying pressure might increase.

💡Hard assets

Hard assets are tangible, physical assets like real estate, precious metals, and commodities that hold value and can act as a hedge against inflation. The video suggests that investors might move out of the dollar and into hard assets like stocks, cryptocurrencies, or gold as a response to the devaluing currency.

💡Gold deposit

A gold deposit refers to a discovery of a large amount of gold in the Earth. The video mentions a significant gold deposit found in China, which could increase the supply of gold and potentially decrease its value per ounce, contrasting with Bitcoin's fixed supply cap.

Highlights

The banking crisis is global, with governments using temporary fixes like 'Band-Aids and bubble gum'.

The federal funds rate has increased dramatically from 0.25 percent to 4.75 percent since January 2021, marking the fastest increase in history.

Bitcoin has experienced a significant surge of nearly 70 percent in the year, attracting attention and large bets on its value.

Despite skepticism, the potential for Bitcoin to reach extreme values like a million dollars is discussed, with implications for purchasing power.

The Federal Reserve's balance sheet has increased by about 300 billion dollars, undoing progress from the past four months.

The debate over whether recent actions by banks constitute 'quantitative easing' and their impact on the dollar's value is highlighted.

Credit Suisse's borrowing from the Swiss Central Bank and subsequent acquisition by UBS indicates ongoing banking instability.

Over 186 U.S banks are reportedly at risk of collapse, as reported by Cointelegraph.

The Federal Reserve is preparing a backstop to inject up to two trillion dollars into the system to address banking issues.

China's surprise rate cut to boost banking liquidity and economy following the COVID-19 reopening is noted.

The U.S. government's spending plans and their potential impact on inflation and the national debt are discussed.

The challenge of servicing the national debt with high interest rates and the potential for a global recession is highlighted.

The rush towards hard assets like stocks, cryptocurrencies, and gold as a response to devaluing currency is mentioned.

China's discovery of a massive gold deposit and its potential impact on the value of gold worldwide is noted.

Bitcoin's capped supply of 21 million coins is contrasted with the increasing availability of gold.

Technical analysis of Bitcoin's price chart indicates a possible bearish divergence and rising wedge, suggesting a short-term retracement.

The potential for a healthy market correction in Bitcoin's price is discussed, along with the backdrop of government spending and debt ceiling discussions.

The Federal Reserve's upcoming launch of its instant payment service, a CBDC, and its implications for the financial system are highlighted.

A call to action for viewers to share their thoughts on the discussed topics and a humorous note on the name 'Bisu' concludes the video.

Transcripts

foreign

the banking tsunamis continue to Ripple

across the globe as governments around

the world try to patch together the

broken system with Band-Aids and bubble

gum the federal funds rate has gone up

from 0.25 percent to 4.75 since January

of 2021 meaning that the interest rate

has increased by 4.5 percent but it has

gone up by 1 800 percent of what it was

before

this is the fastest increase in history

and never before has the FED raised

interest rates so drastically from such

a low level this is why the banks are

collapsing and we're starting to see

some pretty crazy things happening in

the system but meanwhile Bitcoin has

seen a pump of nearly 70 percent so far

this year you may have even heard that

somebody placed a two million dollar bet

that Bitcoin would reach a million

dollars in the next 90 days and while

this is absolutely insane and is

definitely not going to happen we don't

want it to happen anyway because if it

did then Bitcoin while it may be worth a

million dollars a million dollars

wouldn't be able to buy you really much

of anything

but that's not to say that we're not

going to be seeing some gains because

there's a lot of liquidity that's been

pouring back into the markets right here

we have a chart of the fed's balance

sheet and as you can see it has

increased by about 300 billion dollars

in the past week or so erasing all of

the progress that they've made for about

the past four months a lot of people

have been saying that this isn't

quantitative easing because it's going

into the banks and not directly to the

public but this money has to come from

somewhere and they're just printing it

this is devaluing the denominator being

the dollar and meaning that inflation is

going to continue and they're not

getting it down to two percent

at the same time as you may have heard

Credit Suisse was supposed to borrow

about 54 billion dollars from the Swiss

Central Bank but that just wasn't enough

because as you can see we've got news

today that UBS has bought Credit Suisse

for about 3.2 billion dollars

but don't worry because that's not going

to be the only Bank to collapse or the

last one either more than 186 U.S banks

are well positioned to collapse

according to this article by

cointelegraph and to deal with this

issue the FED has put together a new

backstop that has a scope to inject as

much as two trillion dollars into the

system and if that's not enough don't

worry because it's not just here in

America China has recently made a

surprise rate cut to boost their banking

liquidity and their economy because

they've just reopened from the covet

crisis and they're just trying to get

ahead of the game and like I've said

many times in the past it's not just

that the FED can't get inflation down to

two percent because the government's not

going to stop spending anyway according

to this article by reason

the president aspires to spend around

6.9 trillion dollars next year and 10

trillion dollars by 2033

apparently he hopes to raise

taxes by about 4.7 trillion dollars over

the next 10 years

but that's not even going to be a drop

in the bucket and we're definitely going

to have to print money because if they

keep spending 6.9 trillion dollars a

year and the national debt is already 31

trillion dollars then how are we going

to service that debt with interest rates

being at five percent or higher

and with us supposedly heading into a

global recession there's no way that

they're going to be able to raise taxes

because like I've said so many times in

the past taxes have to actually come

from profits somewhere and with the

global economy slowing down we're not

making more money than we were last year

so we can't bring in more taxes so this

is going to lead people to rush out of

the dollar and into hard assets like

stocks or cryptocurrencies that are

decentralized and maybe even gold

but it's not just governments around the

world that have been printing money it's

also the Earth apparently because as

this article by the citizen says China

has discovered a huge gold deposit

around three trillion dollars so that's

three trillion dollars that has just

been added to the supply of gold

meaning that each ounce of gold around

the world has just dropped in value

proportionally this hasn't showed up in

the charts yet because it hasn't been

dug out of the ground obviously but it

is there and it definitely should come

into consideration whenever you consider

how much an ounce of gold should be

worth this can't happen with Bitcoin

though because Bitcoin has a cap of 21

million coins obviously and no more than

that can be created or found in the dirt

or anything like that

so as the government continues to print

and more gold becomes available all the

time I do believe that Bitcoin is going

to continue making higher highs in the

long run and it's really going to be the

only way to escape the traditional

Finance system

in the short term though as you can see

looking at this chart on the four hour

we do have a possible bearish Divergence

that's forming here with these lower

highs on the RSI and these higher highs

here on the price

and a possible book and a possible

Rising wedge which is a bearish

indicator with about a 10 failure rate

and a price target of the bottom of the

wedge this would bring us down to the 50

Fibonacci level

at about twenty four thousand dollars

which would bring us below twenty five

thousand causing a lot of people to

panic but it would only be a decline of

about fifteen percent from the high that

we've just seen I think this would be a

healthy retracement and it probably

would be a time for a cool off anyway

and with people thinking that the FED

might actually do a pause if we do see

them do a 25 basis point hike which is

actually probably to be expected then

this could be enough to send us down for

a short-term retracement which like I

said would be healthy to do anyway

however this doesn't mean that we're

going to stop going to the upside from

here because like I said the

government's probably going to continue

spending money as they always do and

that means that they're going to

continue devaluing the dollar and

Bitcoin is going to continue to rise

especially since we have the debt

ceiling limit deadline coming up in July

and we're going to have to raise the

debt ceiling obviously or we're going to

default on our debts

this is coinciding pretty much perfectly

with this article by cointelegraph that

says that the Federal Reserve confirms a

July launch for its fed now instant

payment service which is a cbdc this

along with the banks collapsing and the

economy falling into a whole could be a

perfect excuse for the FED to roll out

this cbdc and for people to actually

adopt it that's a pretty terrifying

thought and it's actually a scary

coincidence that all of this these

things seem to be lining up at the same

time in July it's almost like it's all

part of the plan let me know what you

guys think in the comments either way

thank you guys so much for watching I

hope you have a wonderful day and I'll

see you next time bye

it's a bisu he's named after one of the

seven lucky gods of Japan according to

Legend he will bring wealth and

prosperity to anybody who evokes his

name so don't forget to write his name

in the comments or you'll bring

Dishonored to your whole portfolio and

check out this video right here say

goodbye ibisu