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Fedbalencesheet

FED's plan still in progress..A while ago two ideas were uploaded trying to predict btc cycle tops and bottoms based on correlations between dxy,gold and fed balance sheet - and This chart is the next iteration with updated indicators and adjusted logcurve that accomodates recent btc top and tries to predict the bottom. Current anticipated bottom between 25-22k with potential wicks lower. We do have few x factors like substantial inflation which can produce extended sideway action before the final move. Lets see what we get.
BITSTAMP:BTCUSDShort
by EMAflow
1
The myth of hyperinflation series- #3. Fed's effectivenessHow effective are Fed's monetary policies and tools? Fed has three simple goals- Grow GDP, keep inflation rate steady and keep the unemployment rate low. Some argue that Fed's perceived power over the market was exposed during several occasions- #1. During the 2008 in the midst of sub-prime mortgage crisis, the market continued to plunge despite the Fed's efforts to bail out Fannie & Freddie and other financial institutions, implement the Troubled Asset Relief Program (TARP) and issue $800b stimulus package. The market finally stopped the bleeding in early March 2009. #2. When Fed ended the QE3 in 2014 by announcing its attention to raise the interest rate and slash the Fed balance sheet, many people believed market would crash. Instead, market shot up to ATH in 2015. #3. This year during the onset of the Covid-19 crisis, Fed started out by cutting the rate by half percentage to no avail. Afterwards, Fed intensified its intervention effort by reducing Fed fund rate to zero. Nonetheless, the market tanked another 15% before it hit the bottom. One can point to the Fed-induced booming housing market in early 2000 as the major factor for the fast economic recovery after the Dot.com bubble and uses it as the counter example. Market is driven by crowd sentiment, but crowd sentiment, which in turns, is partially driven by Fed's decision. It is a chicken and egg conundrum. They both influence each other, but the degree to which each influences one another is impossible to discern. The safe conclusion to draw is that it would be overly optimistic to rely on Fed to get us out of the next financial crisis unscathed as it will take more and more stimulus package to get the job done. The best it can do is to mitigate the severity of damage. Next, let's examine some of the conditions and criteria that are related to inflation.
FRED:GFDEBTNEducation
by Libratus
1
The myth of hyperinflation series- #1 Fed's decisionEven as Fed balance sheet keeps climbing up and U.S takes on more national debt in the current low-interest rate environment, I am not eager to jump to the premature conclusion and entertain the idea of hyperinflation. I'm not saying that it is improbable, I am just saying that it is an unlikely and low-probability event. Yes, it is a fat tail risk that shouldn't be overlooked because it comes with the devastating consequence. However, several conditions and criteria need to be met before we can even realistically begin to talk about the probability of hyperinflation. Federal Open Market Committee's (FOMC) recent decision to keep the fed fund rate unchanged within the target range of 0-0.25% pretty much signaled FED's intention to hold rate effectively to zero until 2022, for at least two years. why? Based on the CPI of the past decade. Since great recession ended in mid-2009, inflation has stayed below 2% for all but two years, therefore; Fed is more worried about disinflationary risk than inflationary risk. Fed's initiative of "average inflation targeting" is determined to hit 2% inflation while keeping the employment low. Since Fed has been missing its inflation goal for a decade, people speculate that Fed may let the inflation run up to 3% or 4% to make up for it being below 2% for so long, thus triggering and opening the doorway to the potential hyperinflation. While such theoretical risk is not completely unfounded, the fact remains the same that we need to have the inflation first before we can have hyperinflation. Next, we will look at Fed's tools and to what extent Fed can influence the market.
TVC:DXYEducation
by Libratus
4