US inflation rate drops to 7.7%, Wall Street surges , Bitcoin gains

[stompix]

In August I started a topic:Bitcoin doesn't like high inflation either
and it didn't, every single time bad news came from the US Bitcoin did the same, it dropped, the pattern is there, and the numbers are there, if you can't see them then you didn't see this coming yesterday when inflation has finally shown signs of cooling down



Or if you don't like that simple graph, and love narration maybe this explanation on the course of events from the WO suits you better:

Explanation

Inflation printed marginally lower.
Green dildo incoming.

Explanation

And the big green dildo did come!

So the story right now, despite all the wanna-be economists that preached about hyperinflation, economic destruction, and recession back in the stone age, things are getting too cool off just like the heads of revolutionaries with the first snow falling on their heads.

The bounce in markets came after the annual rise on the US consumer price index was reported at 7.7 per cent in October, the smallest 12-month increase since January and a sharp drop from an annual rate of 8.2 per cent in September. Economists had forecast an 8 per cent rise.
The core CPI reading, which excludes food and energy prices, rose 6.3 per cent year on year, below expectations of 6.5 per cent and September’s reading of 6.6 per cent.

Wall Street’s benchmark S&P 500 index gained 5.5 per cent, while the tech-heavy Nasdaq Composite closed 7.4 per cent higher.
In government bond markets, the yield on the two-year Treasury note, which is particularly sensitive to interest rate moves, fell 0.25 percentage points to 4.33 per cent, its largest drop since October 2008. Yields fall as prices rise.

I will never get tired of telling people the apocalypse they're preaching for the economy will not help anyone, if everything is destroyed, if people lose their jobs, if logistics chains are destroyed, if nobody is willing to spend a dime anymore preparing for the end of the world it will not be "good for bitcoin", and most importantly, not just telling them, but proving them with facts!
Two vultures in the desert trading one roadkill squirrel for a pair of two years old buffalo bones won't bring bitcoin to $1 million, even if the two vultures do the trading on bisq. In order for people to invest they need money, people that lost their jobs and have no money for food won't be able to invest a dime, they will actually sell their investments to buy necessities!

So, rather than being mad as again, the US seems like it's postponing its death by a few more years, cheer as this is also good for bitcoin, with Europe that as always is lagging behind also showing signs of easing although I don't buy the next month optimism of the ECB, probably more like a trimester we can finally say goodbye to this whole mess and focus on real growth, based on business, not on the fear of an apocalypse.

PS, my bad, probably some of you don't like the mainstream media narrative, let me fix this:

Decrypt: Bitcoin and Ethereum Get a Boost as CPI Shows Inflation Cooling
Coindesk: Bitcoin Gains 10% After Report Showed US Consumer Prices Rose Slower Than Expected in October
Beincrypto:  Bitcoin Rises After Inflation Numbers Reveal Slowdown
Forkast:  Bitcoin gains 5% as U.S. inflation slows down in October

[fillippone]

No asset class likes inflation.
At least in the short term. In the short term inflation act like a value-depressing event. To put it simply, inflation means the value of future things drops, so the value of things, that should be equal to the sum of all future cash flows, drops as well (think at real estate valuation: you are willing to pay for a real estate the sum of all future cash /flows + rents, -mortgages, -maintenances , - taxes). An increase in inflation means the net present value of all the future cash flows decrease, so it decrease.

In the medium range, of course thins are different. In the long term rents raise with inflation, maybe mortgage go downs, because of fixed rates, or whatever, you end up broadly unchanged.

Bitcoin acts the same way. In the hours, days, or weeks after inflation data release, valuation can be hurt. This has been noticeable in the recent month, when bitcoin saw first inflows from traditional finance which used it as a volatile, low beta asset class. So basically something to invest on in the short term. A “risk-on” (as opposed tocaxfinancially defensive asset, or “first-off” asset).
But in the long term, hard assets, like Bitcoin, gold, or real estate, protect you against inflation.
Of course, it’s a long process, but we are not here to become rich tomorrow, we are here to secure intergenerational wealth.

[el kaka22]

I mean cooling off was expected, that’s not a shocking result to be fair. Yes, there were a lot of people who saw the doomsday there is no denying that, and to be fair there is a bit of "doom" involved which is the fact that we shouldn't have these type of periods this quickly, we should have them rarely, humanity goes through terrible periods of economic crisis very commonly for the past 2 decades or so, and that’s the doomsday if you want one.

However, "it’s not going to recover, we will hit 100% inflation!!! RUN!!!" type of idiot so called experts just like to make big scary situations so that they would be heard, "it sucks that we have this, but we will be fine in the end" is not really a story to write about on newspapers.

[fillippone]

I missed this nice read from Coindesk:

What Bitcoin’s Inflation Hedge Narrative Needs: More Time

One of the conclusion:

There has never been a time in bitcoin’s existence where the risk-free rate has been this high, and the eventual outcome will be very helpful for investment managers in the future. Whether or not Bitcoin and other cryptocurrencies are long-term inflation hedges and a store of value or simply a “risk-on” speculative assets preferred in times when bond yields are unattractive is yet to be perfectly understood.

We have to be patient.

[BIT-BENDER]

Recently I noticed the the US dollars just dropped and I could determine that by the fact that my local currency came up top against the dollar recently, this just shows that no currency is safe during this inflation period, if that be the case that's to say that even if you are Savin in crypto-currency stable coin there are big chance you may still be affected due to the fact that stablecoin are actually pegged to the United state dollars.

That's said with the inflation at its peak and the market not bright what are the most favorable crypto-currency escape from all this?

[DaveF]

Nobody who was knowledgeable and looking at the real big picture was that worried about inflation. You could not put that much money into the economy with all the bailouts and covid funds and not have inflation happen. A lot of people were surprised it took as long as it did. But it should be cooling off now for the next year or so. Lets see what the sky is falling people come up with next to send everyone into a panic.

After all if there is no panic nobody watches the news. And then they can't sell advertising.

-Dave

[DrBeer]

I have to upset those who are waiting for the "collapse of the USA" In addition to the fact that the United States will survive the current, albeit protracted, crisis with minimal problems, their level of ... unemployment has also decreased! And ahead is the GROWTH of the economy! This has a completely logical explanation - the transfer of part of the production back to the United States, the growth of government orders for the military industrial complex. Well, the fact that the dollar was, is, and will be the currency of the world economy.

[Fortify]

In August I started a topic:Bitcoin doesn't like high inflation either
and it didn't, every single time bad news came from the US Bitcoin did the same, it dropped, the pattern is there, and the numbers are there, if you can't see them then you didn't see this coming yesterday when inflation has finally shown signs of cooling down

So the story right now, despite all the wanna-be economists that preached about hyperinflation, economic destruction, and recession back in the stone age, things are getting too cool off just like the heads of revolutionaries with the first snow falling on their heads.

The bounce in markets came after the annual rise on the US consumer price index was reported at 7.7 per cent in October, the smallest 12-month increase since January and a sharp drop from an annual rate of 8.2 per cent in September. Economists had forecast an 8 per cent rise.
The core CPI reading, which excludes food and energy prices, rose 6.3 per cent year on year, below expectations of 6.5 per cent and September’s reading of 6.6 per cent.

Wall Street’s benchmark S&P 500 index gained 5.5 per cent, while the tech-heavy Nasdaq Composite closed 7.4 per cent higher.
In government bond markets, the yield on the two-year Treasury note, which is particularly sensitive to interest rate moves, fell 0.25 percentage points to 4.33 per cent, its largest drop since October 2008. Yields fall as prices rise.

I will never get tired of telling people the apocalypse they're preaching for the economy will not help anyone, if everything is destroyed, if people lose their jobs, if logistics chains are destroyed, if nobody is willing to spend a dime anymore preparing for the end of the world it will not be "good for bitcoin", and most importantly, not just telling them, but proving them with facts!
Two vultures in the desert trading one roadkill squirrel for a pair of two years old buffalo bones won't bring bitcoin to $1 million, even if the two vultures do the trading on bisq. In order for people to invest they need money, people that lost their jobs and have no money for food won't be able to invest a dime, they will actually sell their investments to buy necessities!

So, rather than being mad as again, the US seems like it's postponing its death by a few more years, cheer as this is also good for bitcoin, with Europe that as always is lagging behind also showing signs of easing although I don't buy the next month optimism of the ECB, probably more like a trimester we can finally say goodbye to this whole mess and focus on real growth, based on business, not on the fear of an apocalypse.

You're a pessimist, you're also not unique or special. You have not figured out some special formula, it is the same boom and bust scenario that has been going on for centuries. In the good times people borrow and spend a lot, in the bad times loans are called in and people have to pay down debt. Most recessions are triggered by some new and unforeseen event, like this time it is inflation creeping up / the War in Ukraine / China's zero covid strategy all stifling the world economy right now. The stock market is generally an optimistic place, so any shreds of good news will generally see happier days but it is pointless trying to look at individual days and extrapolate a bigger picture.

[stompix]

You're a pessimist, you're also not unique or special.

I never said I'm special or unique, thank you for letting me know that, as for the pessimistic thing, what is pessimistic about inflation going down, recession not happening and people not losing their job or dying of hunger?
Sorry to bring it to you but if that makes me a pessimist it makes somebody else a psychopath!

After all if there is no panic nobody watches the news. And then they can't sell advertising.
-Dave

Exactly!
Thousands of breaking news when lumber prices went through the roof, hundreds of interviews of people who can't afford to build their houses, crying, screaming, now that lumber prices are at 432 compared to 439 in 2017 5 years ago nobody is doing any report on it?
You will see hundreds filming a mob battling for toilet paper but nobody on the second day showing there is enough toilet paper to wipe our asses till 2030 in the deposits!

I simply don't get these people that need to live in this constant fear that everything will collapse, I'm starting to think there are a ton out there who really want this, they just want to see everything destroyed because of whatever personal failures they've had in their own lives.

No asset class likes inflation.

Nobody likes inflation, not when we talk about anything up that a full point, nobody would give a damn if real inflation would be under 1%, it would mean that prices would go up by 50%-75 in your whole lifetime.

I never said and I don't believe either that bitcoin won't be able to protect your wealth when we go on long-term timespans, but I still believe from a personal point of view each individual would be far more pleased with tiny inflation knowing in case something bad happens he has his coins rather than experiencing constant hyperinflation and with everyone around him dirt poor so there is little left to buy with your expensive coins.