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Author Topic: FED has increased interest rates, ECB will do the same!  (Read 71 times)
LionKing
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June 14, 2018, 08:27:29 PM
 #1

Hi Guys,
The Federal Reserve has increased interest rates, The European Central Bank will stop QE, it seems the occidental economy is starting to grow again.
Will it benfit the cryptocurrency market in his whole or it will drain money from it toward classic investments?
what do you guys think about it?
What's your opinion/analysis?
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bitmover
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June 14, 2018, 08:44:23 PM
 #2

Hi Guys,
The Federal Reserve has increased interest rates, The European Central Bank will stop QE, it seems the occidental economy is starting to grow.
Will it benfit the cryptocurrency market in his whole or it will drain money from it toward classic investments?
what do you guys think about it?
What's your opinion/analysis?


Increased interest rates do not make economy grow, as higher interest rates encourage people to lend money. At the same time, they make it difficult for entrepreneurs to borrow money.

When it´s hard to borrow money to make your own business the economy does not grow.

Usually government increases interest rates to reduce inflation rates and to attract money to the country.

This is why dollar is on a bull run, because everyone is buying dollar so they can invest in the US at high interest rates. There is no reason to invest in high risk countries, unless they increase even more their interest rates.

I think this higher interest rate may have a negative effect on crypto (not much) and a negative effect in stock market.
This is may be good opportunity to bonds in the US, so smart money may go that way.

LionKing
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June 14, 2018, 08:57:43 PM
 #3

Hi Guys,
The Federal Reserve has increased interest rates, The European Central Bank will stop QE, it seems the occidental economy is starting to grow.
Will it benfit the cryptocurrency market in his whole or it will drain money from it toward classic investments?
what do you guys think about it?
What's your opinion/analysis?


Increased interest rates do not make economy grow, as higher interest rates encourage people to lend money. At the same time, they make it difficult for entrepreneurs to borrow money.

When it´s hard to borrow money to make your own business the economy does not grow.

Usually government increases interest rates to reduce inflation rates and to attract money to the country.

This is why dollar is on a bull run, because everyone is buying dollar so they can invest in the US at high interest rates. There is no reason to invest in high risk countries, unless they increase even more their interest rates.

I think this higher interest rate may have a negative effect on crypto (not much) and a negative effect in stock market.
This is may be good opportunity to bonds in the US, so smart money may go that way.

actually an increasing of inflation is caused most of the time by an increasing of demand on supply in goods markets (due not only by money supply factors)... central banks keept low interest rates in order to encouraging  money lending from banks to entrepeneurs...
another thing: people don't lend money, they borrow money... banks lend money at higher interest rate of FED funds...
we're talking about the same thing from a different point of view!!

anyway you're pretty right about investors buying dollars in order to buy securities and government bonds that have an higher interest rate now, this will lower the price of these asset then!! and risk countries have an higher interest rates because they are risky, not only because of monetary policies.  
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June 14, 2018, 09:03:41 PM
 #4

Hi Guys,
The Federal Reserve has increased interest rates, The European Central Bank will stop QE, it seems the occidental economy is starting to grow again.
Will it benfit the cryptocurrency market in his whole or it will drain money from it toward classic investments?
what do you guys think about it?
What's your opinion/analysis?

No Mario Draghi is not so much hawkish
EBC will not increase rates and will don't stop QE
You can look dollar/euro pair
Dollar is going to raise
EBC will print to save banks they have no other choice
Other way will be not possible to save DB,italian and french banks
Fusion between big French Societe General and Uni Credito is very possible
It is all to save banks and hide his loses


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LionKing
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June 14, 2018, 09:10:31 PM
 #5

Hi Guys,
The Federal Reserve has increased interest rates, The European Central Bank will stop QE, it seems the occidental economy is starting to grow again.
Will it benfit the cryptocurrency market in his whole or it will drain money from it toward classic investments?
what do you guys think about it?
What's your opinion/analysis?

No Mario Draghi is not so much hawkish
EBC will not increase rates and will don't stop QE
You can look dollar/euro pair
Dollar is going to raise
EBC will print to save banks they have no other choice
Other way will be not possible to save DB,italian and french banks
Fusion between big French Societe General and Uni Credito is very possible
It is all to save banks and hide his loses

Fair point mate. A lot of banks in Europe are like zombies.
But you're not updated!! Draghi already decided to stop QE...
ECB is confident about the future of the economy... the problem is represented by populist parties, especially in Italy that has a great sovereign debt!!
bitmover
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June 14, 2018, 09:54:23 PM
 #6

Hi Guys,
The Federal Reserve has increased interest rates, The European Central Bank will stop QE, it seems the occidental economy is starting to grow.
Will it benfit the cryptocurrency market in his whole or it will drain money from it toward classic investments?
what do you guys think about it?
What's your opinion/analysis?


Increased interest rates do not make economy grow, as higher interest rates encourage people to lend money. At the same time, they make it difficult for entrepreneurs to borrow money.

When it´s hard to borrow money to make your own business the economy does not grow.

Usually government increases interest rates to reduce inflation rates and to attract money to the country.

This is why dollar is on a bull run, because everyone is buying dollar so they can invest in the US at high interest rates. There is no reason to invest in high risk countries, unless they increase even more their interest rates.

I think this higher interest rate may have a negative effect on crypto (not much) and a negative effect in stock market.
This is may be good opportunity to bonds in the US, so smart money may go that way.

actually an increasing of inflation is caused most of the time by an increasing of demand on supply in goods markets (due not only by money supply factors)... central banks keept low interest rates in order to encouraging  money lending from banks to entrepeneurs...
another thing: people don't lend money, they borrow money... banks lend money at higher interest rate of FED funds...
we're talking about the same thing from a different point of view!!

anyway you're pretty right about investors buying dollars in order to buy securities and government bonds that have an higher interest rate now, this will lower the price of these asset then!! and risk countries have an higher interest rates because they are risky, not only because of monetary policies.  


I know this topic is a lot more complex, I just cannot cover it all on a 300 characters post lol people write books about it.
I just said the basic to show that economy is now growing because interest rates are increasing. In fact that is mostly the opposite in most cases.

davis196
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June 15, 2018, 04:38:25 AM
 #7

Hi Guys,
The Federal Reserve has increased interest rates, The European Central Bank will stop QE, it seems the occidental economy is starting to grow again.
Will it benfit the cryptocurrency market in his whole or it will drain money from it toward classic investments?
what do you guys think about it?
What's your opinion/analysis?

I think that the USD value will increase and this might stabilize the bitcoin price,because most of the fiat/BTC trading is done with USD.Anyway,the economy growth makes people  want more risky investments,which lead to the conclusion that they will choose cryptocurrencies and BTC as a part of their portfolios.

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June 15, 2018, 06:19:38 AM
 #8

I think this higher interest rate may have a negative effect on crypto (not much)
The crypto space is more or less disconnected from the traditional markets So it has nothing to gain(lose) from the change of interest rate. If there is a negative effect we will hardly see it. The FED changes are irrelevant when you such have high volatility in the crypto markets.
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June 16, 2018, 02:15:08 AM
 #9

Increased interest rates generally slow the growth of an economy and definitely in speculative investments such as cryptocurrency. When interest rates increase saving is more favorable as an alternative to investing.

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June 16, 2018, 04:02:56 AM
 #10

Increased interest rates generally slow the growth of an economy and definitely in speculative investments such as cryptocurrency. When interest rates increase saving is more favorable as an alternative to investing.
right, with the added interest rate then the person owed for the business to be reduced, so that will slow the growth of economi, because all entrepreneurs i think can not be separated from the bank

stompix
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June 16, 2018, 10:31:46 AM
 #11

No Mario Draghi is not so much hawkish
EBC will not increase rates and will don't stop QE

You can look dollar/euro pair
Dollar is going to raise
EBC will print to save banks they have no other choice
Other way will be not possible to save DB,italian and french banks
Fusion between big French Societe General and Uni Credito is very possible
It is all to save banks and hide his loses

Already happed:
https://www.theguardian.com/business/live/2018/jun/14/ecb-qe-stimulus-mario-draghi-fed-rate-hike-uk-retail-sales-business-live

Quote
The ECB has decided to halve the pace of its QE programme after September to just €15bn per month, from €30bn per month at present.
And then it will stop buying new bonds altogether at December.

And why do you think it's not possible to save those banks? And since you've said DB, zerohedge much?

I think that the USD value will increase and this might stabilize the bitcoin price,because most of the fiat/BTC trading is done with USD.Anyway,the economy growth makes people  want more risky investments,which lead to the conclusion that they will choose cryptocurrencies and BTC as a part of their portfolios.

Wait...You just labeled BTC as a risky investment?  Grin


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June 17, 2018, 02:25:16 PM
 #12

Increased interest rates generally slow the growth of an economy and definitely in speculative investments such as cryptocurrency. When interest rates increase saving is more favorable as an alternative to investing.
right, with the added interest rate then the person owed for the business to be reduced, so that will slow the growth of economi, because all entrepreneurs i think can not be separated from the bank

Yep, borrowing increases and so there is less investment in to the economy from businesses also. Saving is more advantage over spending. Interest rates are seen as a sign that an economy is doing well but in fact they're used to slow growth.

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June 17, 2018, 09:09:09 PM
 #13

I think this higher interest rate may have a negative effect on crypto (not much)
The crypto space is more or less disconnected from the traditional markets So it has nothing to gain(lose) from the change of interest rate. If there is a negative effect we will hardly see it. The FED changes are irrelevant when you such have high volatility in the crypto markets.

Crypto isn't entirely disconnectd from traditional markets. Many people borrowed fiat to buy crypto, and the rising interest rates won't help them.

Also - some people went into crypto simply because interest rates were so low they were searching for an alternate income. But once interest rates normalise, the money should flow back to traditional investments.

bitmover
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June 18, 2018, 12:14:24 AM
 #14

I think this higher interest rate may have a negative effect on crypto (not much)
The crypto space is more or less disconnected from the traditional markets So it has nothing to gain(lose) from the change of interest rate. If there is a negative effect we will hardly see it. The FED changes are irrelevant when you such have high volatility in the crypto markets.

Crypto isn't entirely disconnectd from traditional markets. Many people borrowed fiat to buy crypto, and the rising interest rates won't help them.

Also - some people went into crypto simply because interest rates were so low they were searching for an alternate income. But once interest rates normalise, the money should flow back to traditional investments.

yeah, that's exactly why I said it may have a negative effect on crypto.
Raise in interest rates will make  the money from all types of investments to bonds.

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