Bitcoin has gained some 7% in the past two days, rising from circa $10,200 to now close to $11,000.
In a rare reversal for months, bitcoin is now up while all other cryptos, including ethereum, are down.
Suggesting maybe BTC is taking the show and that could be because monetary policy is taking centre stage.
There appears to be no clear pattern for bitcoin, except if we go on the weekly, there’s what could with a great stretch be seen as a very unfine cup and handle.
On the hourly, it looks like a bull run, and just as importantly the recent stable high is above the previous one in 2019.
Back then it briefly reached $14,000, but as can be seen above realistically it rose to $11,400 while this time it breached $12,000.
That $11,400 is likely to once more be resistance, but bitcoin looks a bit bullish in part probably due to the halvening and in part because Fed is to remind us again of their new policy of high inflation.
If you remember some weeks ago the Chairman of Federal Reserve Banks, Jerome Powell, said the policy aim will be to tolerate high inflation if it follows a prolonged period of low inflation, as it has.
Just how high is high, or in their terms just how much above 2% is to be tolerated, is not clear, but they are to meet at 2PM Eastern Time (7PM London time) with Powell then to address the world half an hour later.
No change is expected on interest rates, but whether there might be some new tools to pump inflation, is not clear.
He is to give economic forecasts as well. Recent data for other countries have shown the economy is recovering at a faster pace than expected. The same presumably would apply for America as well.
America has not had a surplus in trade since the 70s. Back then, it was constantly either selling about as much as buying or often more likely, selling a bit more than buying at 2% or so.
That’s what made the United States rich and is also why since the 70s all economic figures for ordinary Americans, like wage increases, affordability of housing, and so on, all have gone down. But they have iPhones now, the other side retorts.
What happened in the 70s has become a meme, but what happened in the naughties we all know.
Valuable resources were directed towards chasing propaganda fantoms with fear-mongering depressing the American population, lowering productivity and turning their once glittery sky-scrappers a bit grey.
In the process the government took more and more power for itself, away from the people, demanding licenses nowadays even for barbers.
Licenses as you might know are a different name for a tax, in this case a business tax, usually a regressive one because the license fees are priced at the same level whether you’re a startup or a trillion dollar corporation.
So for two decades now America has been getting poorer because it’s paying a circa $60 billion premium on goods by buying them instead of producing them, and is paying that premium every month.
Exports went up 8.1% to $168.1 billion for July, boosted by sales of cars, crude oil, semicondutors and diamonds. Imports surged 10.9% to $231.7 billion, mainly due to cars, auto parts, civilian aircrafts, cell phones and finished metal shapes.
How these two numbers move, this $170 billion and $230 billion, is in part determined by what Powell decides because he is in charge of defining just what is $1 billion.
As there is no objective anchor to this billion any longer, he is basically flying blind, without much of a clue of what is one billion at least while that goes through the process of being defined.
It’s only when you look at house prices in the 90s and today that you realize how blind he is flying with the tendency generally being to devalue.
Now they want to devalue on steroids, with it reflected on bitcoin because is more and more being used for international trade.
Unlike gold therefore, which generally is not used for trade except for in very rare circumstances, bitcoin may well rise as that objective anchor of what is the value of money and what is $1 billion.
That hasn’t crossed our mind before in a realistic sense, but one can see a day when fiat is measured in bitcoin, instead of bitcoin in fiat as currently.
That’s because the value of fiat changes, and by that we mean its intrinsic value, not the comparative number. The quality of fiat changes. One dollar in the 90s may have the same look as one dollar today, but these two are not the same dollar.
One bitcoin in the tens is the same exact bitcoin as now in the 20s. Its comparative value may change, it’s number in dollars, but its quality has not changed one bit.
As Nakamoto said, it’s quality has been set in stone, making this one type of objective money. A lazy type, because it doesn’t quite track production, but that’s not really possible at least in our age.
Making it the most objective measurer that humanity could come up with in our times, and that includes measuring what is $1 billion which Powell will try to define in a few hours with it to be seen whether the market has a different view or what bitcoin thinks.