I’d like people to answer the following question: If central bank balances matter, why is the European Central Bank and Bank of Japan (BOJ), inflation rates lower than the United States while their balance sheet/GDP ratios are higher? While central banks do not print money, they can exchange inert reserve for collateral. This has caused deflationary effects on the economy and to what extent did macroeconomic developments impact Bitcoin.
Powell’s principal Xilaierbu Leonard
Powell was re-nominated in order to re-nominate President Joe Biden Fed chairman. He defeated his main rival. There were many reasons. One was that Powell’s path through Senate was more straightforward and Rahr could split votes in the Senate 50/50. Officials stated that Powell also received another “reward” term for leading the economy out the 2020 COVID-19 recess.
This is a designation that I believe has a deeper meaning:
- First, we talked in detail about Powell’s rejection for the hype with Central Bank Digital Currency. In this program, we discussed the use of Central Bank Digital Currency (CBDC). Powell continues to scoff at the idea. This symbolises the end of globalism for the US banking sector.
- Second, Powell encountered increasing progressive opposition from Congress. Crazy people, like Senator Elizabeth Warren, attack Powell because he’s not too dovish and doesn’t approve of the Fed’s role in climate policy. His reelection is a form of rejection of progressives’ toxic ESG initiatives.
- Last, Lael is an ideal choice for globalists. Powell was a symbol of a break with globalists, and a shift toward more American-centric policy.
Panic and Supervision by the European Central Bank
Next, we’ll be going straight to the European Central Bank News. He has released a new regulatory structure for electronic payments this week.
“The Euro system will use new monitoring tools to track the activation and support of payments cards, credit card transfers (direct debits), electronic transfers, and digital tokens (including electronic money tokens). The PISA wallet framework, which includes services for encryption assets, will also be included. For example, merchants can accept card payments in encrypted assets. Payments can send via epurse. Or the option to accept encrypted asset payment.
ECB Press Release
Treasury and the White House want to exclude Bitcoin from the recently passed infrastructure bill. Ironically, altcoin owners who wanted to protect themselves against nominal decentralized Fraud (DINO), thwarted the bill.
The European Central Bank is worried that the euro may lose market share and its “monetary sovereignty” will be compromised over the coming years. It hopes to limit competition from U.S. dollar stablecoins or Bitcoin and simultaneously provide a digital Euro for the market. The market, however, doesn’t believe that it is a good match for a digital Euro that it provides.
We explore the negative factors that are currently affecting Europe. While it faces inflation, it also faces Fed abandonment and shrinking import volumes. The number of COVID-19-related cases is increasing despite authoritarianism being prevalent in many countries.
Russia has increased its influence over Europe due to an escalating energy crisis. Meanwhile, Russia is deploying troops at Ukraine’s borders. It was the perfect storm that caused capital fleeing Europe to trade for US dollars and, hopefully, to switch to Bitcoin.
Macroeconomic Developments Impact to Bitcoin and US Dollar Stronger
The US dollar broke record highs this week, which indicates that the global financial system has been under severe pressure. It appears that the collateral deficit we have been talking of over the last six to twelve months is rapidly becoming a US Dollar shortfall.
Bitcoin is an asset neutral cryptocurrency that is ready and willing to accept capital fleeing Europe or China. It provides a capital escape from Europe and China, which will not create debt imbalances in other parts of the building new economy.
Investors are aware that an appreciation in the US dollar will negatively impact the global economy. The vast majority of debt is denominated as US dollars. With the US dollar increase in value, it becomes more difficult for debtors to pay. The world will prosper if the dollar falls, but the opposite will happen – the dollar will strengthen and the world will go into recession. Bitcoin can use to shorten the trip with US Dollars, and it is another way to bypass this value.
To prove this argument, Bitcoin and the US Dollar must rise together. This is exactly what we saw last year. It is not a causal relation, as they all benefit equally from the same market conditions.