iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
19,520 Blog Posts

Inflation is Coming

Fed’s Powell just said the June jobs report did not change his view on interest rates, which means he’s gonna cut.

And then there’s this:

“Crosscurrents have reemerged,” Powell said. “Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.”

I cannot give you a rational explanation as to why the Fed, all of a sudden, acquiesced to Trump. Maybe the specter of having Dr. “Gold Bug” Shelton on the board made them bend to Trump? Maybe not. Maybe, just maybe, they’re all fuckheads. But that’s not the point here today. We have to trade the market in front of us, not the one we want.

The fact is, the Fed will be cutting rates into a roaring economy, with stocks at record highs.

Digest that for a moment.

Who wins and who loses?

The dollar should be denigrated — seeing it down 0.4% today confirms that. How about inflation? Yes, inflation should come in hot — helping gold prices explode. Gold is up 0.7% and oil is up almost 3%. This is going to be inflationary, cheap vaudeville money sloshing around and looking for yield.

Value stocks will be in play.

Overall, this is very bullish for stocks and that’s why we’re rallying.

I sold out of CRWD for +3%. It was purchased yesterday before the bell. Each and everyday I buy a stock for an overnight hold. Thus far, the results have been nothing less than staggering.

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17 comments

  1. WrongView

    Bitcoin is dead.

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    • Dr. Fly

      How do you figure?

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      • WrongView

        Look at it.

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        • metalleg

          BTC will die and out of the ashes, BSV will rise like a phoenix.

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          • numbersgame

            Two questions:
            1) How can anything serve as a currency if its value is unstable?
            2) How can the value of anything be stable when its maximum supply is fixed?
            3) How can anything be useful as a currency when the transaction costs get more expensive over time?

            This is why within 50 years (or less), both BSV and BTC will be gone. In the meantime, if you think your technical trading skills are better than Wall Street’s, go for it.

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    • acehood

      Wrong!

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    • numbersgame

      Bitcoujn will not die during a bull market.

      The whole system is leveraged, so bitcoin will drop when forced selling takes place either directly in crypto currency or to raise cash to cover other positons). , and since 99% of investors are net long stocks, that will only happen during a sustained (ie 4 months or longer) drop of at least 10%.

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  2. awanka

    We will pay for this degeneracy someday, Mr. Fly. Hopefully this pig be dead by then.

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  3. ferd

    Another factor may be that the Fed’s employers have been sufficiently scared by the Dem candidates’ verbal competition to give stuff to the eaters at the expense of the bankers and the already-asset-rich and have decided that they’re better off with Trump.

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  4. numbersgame

    10 weeks ago, I made the prediction that the amrket will hit 3000, but that 30-year bonds would be a better play.

    30-year treasuries – the old man play – has returned 30-40% on an annualize basis since then.
    https://ibankcoin.com/flyblog/2019/04/23/checking-soon-work-done/

    So now think about the FED:
    1) If the FED cuts, rates drop, bonds go up
    2) if the FED doesn’t cut, market cries and crashes, rush to safety, bonds go up

    So you think US Treasuries are overpriced? They currently are *cheaper* (higher yields) than Greek bonds

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  5. flea

    1) How can anything serve as a currency if its value is unstable?

    Depends how you assess it’s value. It’s the instability of the massively inflated US dollar you’re seeing. BTC looks pretty stable versus a stable limited stock currency like Gold.

    2) How can the value of anything be stable when its maximum supply is fixed?

    Why not? Rather, how can anything be stable whose supply is easily and grossly manipulated?

    3) How can anything be useful as a currency when the transaction costs get more expensive over time?

    Transaction costs are zero. Conversion costs will disappear as fiat currencies disappear.

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    • numbersgame

      1) Well, I’ll agree that BTC’s stability is comparative to Gold, but that’s not saying much. Show me a chart of bread, milk, gas, or even iPhones or Honda Accords vs BTC/Gold and you will see the flaws of your logic..

      2) True that currencies are manipulated and equating manufacture 2% inflation with stability is a crime against wage-earners. However, if the number of people, services, and [rodicts keep increasing while the money-supply is fixed, then you are baking in deflation, which is just as bad (some say worse).

      3) Zero? For each transaction, new BTC are created (infaltion). That means that the value of the cryptocurrency that the seller received has decreased. More importantly, the resources (computing power and energy) used to process the transactions keep increasing (by design) as well, so BTC transaction processing becomes less efficient over time.

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      • flea

        Yep. Sorry was coming back to amend the statement about transactions! You are right, they are non-zero and are based on the computing power required to add the transaction to the blockchain at the time of the transaction. However, transaction growth has not been linear or one-way to date. The current fee is $0.28 if you can wait an hour.

        See: https://bitcoinfees.info/

        Bitcoin has embedded inflation control. Every four years compensation for mining a single coin is halved. That keeps the important ‘stock-to-flow’ ratio very high and the money itself is not inflated.

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