Picking Apart Fed Policy

Picking Apart Fed Policy | Ecency

Hey Jessocialists

I took the time to listen to the latest BS from the fed, so you don't have to, its all technical lip service and means business as usual, but I thought it would be fun to debunk what was said because for someone who reads up about economics it's hilarious.

Lol and trust me it wasn't hard, it's pretty blatant for anyone who understands economics. So while most people don't, I thought it would be essential to pick apart the narrative projected on us by the Federal Reserve.

Why do I care what America does with their policies? I'm in Africa, well since the world decided the best way forward would be to peg everything to the dollar, the rest of the worlds central banks are smaller versions that mimic what the others do, its a hive mind. So if the US does something, you can be sure the rest will follow a similar path.

Competitive devaluation

When you all pegged to a falling rock, everyone gets dragged down with you, and with a debt-based fiat economy, it's a race to who can obliterate their currency first. This is what we have to do to keep the debt bubble from imploding. Inflation is the only weapon since we've gone past the rate of repayment through higher interest rates.

We've broken the zero bound in some countries, and while the US refuses to go negative, they are trying something else, a financial trickery if you will.

The reason the US and many countries have low-interest rates is that they have to keep it artificially low or the debt payments on things like government debt, corporate debt and household debt would balloon and people would either default.

This would destroy debt, bring about deflation and massive depression. By keeping interest rates low, people can service their repayments and on top of that with added debasement through inflation; they can use cheaper dollars to pay back the debt.

The need for more inflation

So the central banks are keeping interest rates low artificially to try and keep the economy going, they now have nowhere to go apart from increasingly negative. So what is the fed proposing? They want to run the economy hot, over 2% inflation, you see the more inflation they have, the more room there will be to increase interest rates nominally.

SO let's say inflation rises to above 2% then the Fed has room to raise interest rates to try and pretend that they are raising interest rates but instead they're just destroying your purchasing power to do it.

Yet we peg back interest rates

So why not just let interest rates rise in the first place? My point exactly, they can't. They can only raise it by the amount of inflation they create so its financial trickery and not a healthy economy increasing their interest rates.

Bitcoin benefits

In a world where interest rate hikes are only nominal and based on the gap between the amount of inflation, they can create this is a super bullish environment for Bitcoin. It just means more capital rushing into the market each year into an asset that gets more scarce each year.

It's as if the Fed and central banks are doing everything to ensure Bitcoin dominance at this point. It may not seem like it now but this over 2% inflation target in one of the biggest market cap economies + the knock-on inflation we'll see from other central banks that copy this strategy will continue to show dividends for Bitcoin.