Liquidity Rises as Governments Flood the Financial System!
Summary
TLDRThe 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
- π The global banking system is facing a crisis, with governments attempting to stabilize it with temporary solutions.
- π 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.
- πΈ Bitcoin has experienced significant growth, with a 70% pump so far in the year, and speculations about its future value reaching a million dollars.
- πΉ 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.
- π¦ 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.
- π 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.
- π 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.
- π¨π³ 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.
- πΌ 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.
- π 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.
- π 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
π 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.
π 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.
Mindmap
Keywords
π‘Banking tsunamis
π‘Federal funds rate
π‘Quantitative easing
π‘Inflation
π‘Bitcoin
π‘Debt ceiling
π‘FedNow
π‘Bearish divergence
π‘Fibonacci level
π‘Hard assets
π‘Gold deposit
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
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