The Fed's purpose of "QT" or Quantitative Tightening.

[Wind_FURY]

QT is merely an act for the Fed to control demand by removing cash/liquidity from the financial system. But before the people feel the real effects of QT, what will happen is, your savings will diminsh because of inflation, then as inflation is felt by companies through increasing expenditures, job lay-offs after another will happen. It's already starting. Tesla will fire 10% of its work-force, Coinbase has also started laying off some employees. Plus with less liquidity, some of these big banks/companies WILL start to FAIL. What would then the Fed do? START QE BRRRRR-MONEY-PRINTING AGAIN, AND BAIL OUT THESE COMPANIES! WAIT FOR IT IN 2023, OR 2024! New Bull Cycle after that.

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[hugeblack]

It is almost impossible to predict the Fed’s policies in the coming period, especially during the second and third quarters of this year, but it seems that we will face it.

Either consider inflation as the problem and start withdrawing liquidity and raising interest rates, or trying to accelerate the economy to push it away from recession as the main problem.

In any case, we are facing a state of uncertainty and therefore a lot of markets will be very turbulent during the next few months, and some random variables such as closings in China, food and energy situation will complicate a lot of calculations.

Therefore, you cannot say that the scenario you mentioned will come true.

[buwaytress]

Yeah, we've all seen this before haven't we? Our parents have seen it before really, and since the 1970s was in the generation they were born in, even our grandparents have seen it before.

Don't even need to look so far away from home, in my tiny enclave in Southeast Asia it's the same old cycles of banking problems, followed by fiat printing, interest hikes, and relentless bailouts. Our most famous CEOs, politicians, corporate moguls have all bankrupted several times in the past decades. Whereas for the regular joe, bankruptcy is the end of adult life, for them it's a chance to give speeches about how they had to fail 10 times to succeed finally.

Bull run in 2023? Not so soon though I think. That'll be too little pain to bear (laughs+cries).

[Wind_FURY]

It is almost impossible to predict the Fed’s policies in the coming period, especially during the second and third quarters of this year, but it seems that we will face it.

Either consider inflation as the problem and start withdrawing liquidity and raising interest rates, or trying to accelerate the economy to push it away from recession as the main problem.

Ser, a RECESSION is what the Fed wants to contol demand. They literally want U.S. plebs out of savings, and laid off from their jobs. If they accelerate the economy by injecting liquidity it would risk Hyperinflation.

This is literally the kind of manipulation that motivated Satoshi to build Bitcoin.

In any case, we are facing a state of uncertainty and therefore a lot of markets will be very turbulent during the next few months, and some random variables such as closings in China, food and energy situation will complicate a lot of calculations.

Therefore, you cannot say that the scenario you mentioned will come true.

It will come true. It's in their "instruction" manual.

Yeah, we've all seen this before haven't we? Our parents have seen it before really, and since the 1970s was in the generation they were born in, even our grandparents have seen it before.

Don't even need to look so far away from home, in my tiny enclave in Southeast Asia it's the same old cycles of banking problems, followed by fiat printing, interest hikes, and relentless bailouts. Our most famous CEOs, politicians, corporate moguls have all bankrupted several times in the past decades. Whereas for the regular joe, bankruptcy is the end of adult life, for them it's a chance to give speeches about how they had to fail 10 times to succeed finally.

Bull run in 2023? Not so soon though I think. That'll be too little pain to bear (laughs+cries).

I believe not a bull run, QE and bail outs, and the bullish effects of that will start several months after when the money/liquidity starts going around the economy.

[Fortify]

QT is merely an act for the Fed to control demand by removing cash/liquidity from the financial system. But before the people feel the real effects of QT, what will happen is, your savings will diminsh because of inflation, then as inflation is felt by companies through increasing expenditures, job lay-offs after another will happen. It's already starting. Tesla will fire 10% of its work-force, Coinbase has also started laying off some employees. Plus with less liquidity, some of these big banks/companies WILL start to FAIL. What would then the Fed do? START QE BRRRRR-MONEY-PRINTING AGAIN, AND BAIL OUT THESE COMPANIES! WAIT FOR IT IN 2023, OR 2024! New Bull Cycle after that.

Boom and bust is a natural economic cycle that has existed in free markets since they began. It is like the sun rising and the sun setting. What you are describing with quantitative easing and quantitative tightening is government meddling in that process which usually ends up going wrong at some point. Quantitative easing, like you say, floods the market with cheap money which occurred after the financial crisis all the way back in 2008, it was jolt to bring the economy back to life which was helpful at the time. However giving away cheap money keeps people happy and makes it easier for politicians. It should have ended after a couple years, with maybe the next ten years paying back the original overspending to balance the budget. They left the money tap on for far too long though and just ended up blowing the balloon up for a bigger burst next time around.

[Wind_FURY]

QT is merely an act for the Fed to control demand by removing cash/liquidity from the financial system. But before the people feel the real effects of QT, what will happen is, your savings will diminsh because of inflation, then as inflation is felt by companies through increasing expenditures, job lay-offs after another will happen. It's already starting. Tesla will fire 10% of its work-force, Coinbase has also started laying off some employees. Plus with less liquidity, some of these big banks/companies WILL start to FAIL. What would then the Fed do? START QE BRRRRR-MONEY-PRINTING AGAIN, AND BAIL OUT THESE COMPANIES! WAIT FOR IT IN 2023, OR 2024! New Bull Cycle after that.

Boom and bust is a natural economic cycle that has existed in free markets since they began. It is like the sun rising and the sun setting. What you are describing with quantitative easing and quantitative tightening is government meddling in that process which usually ends up going wrong at some point. Quantitative easing, like you say, floods the market with cheap money which occurred after the financial crisis all the way back in 2008, it was jolt to bring the economy back to life which was helpful at the time. However giving away cheap money keeps people happy and makes it easier for politicians. It should have ended after a couple years, with maybe the next ten years paying back the original overspending to balance the budget. They left the money tap on for far too long though and just ended up blowing the balloon up for a bigger burst next time around.

But the pandemic forced the Fed to print money to keep the economy chug along, or a recession would happen. The Fed will do whatever it could to "balance" the economy. If they're doing a good job, or not, is another debate altogether. Currently, the Fed needs to increase interest rates and QT, the U.S. Federal Government needs to increase taxes to draw money out of the system, control demand, and lower inflation. The Fed will not stop until a big company, or a big bank, or the money market "breaks".

[buwaytress]

Bull run in 2023? Not so soon though I think. That'll be too little pain to bear (laughs+cries).

I believe not a bull run, QE and bail outs, and the bullish effects of that will start several months after when the money/liquidity starts going around the economy.

Yeah, we're mid-way through the year, just months into the winter, so even if 2023 Q4 is the bull run, that's far too short a bear period -- given that we had a whole year of rally just behind us.

Also that the next halving probably needs to be factored into the timing (the rally doesn't come with it but only about a year after it).

Really need the economy to "realise" it's bad though. May job reports was another higher-than expected month in the US so we're again presented with false bits of hope like that.

[Wind_FURY]

Bull run in 2023? Not so soon though I think. That'll be too little pain to bear (laughs+cries).

I believe not a bull run, QE and bail outs, and the bullish effects of that will start several months after when the money/liquidity starts going around the economy.

Yeah, we're mid-way through the year, just months into the winter, so even if 2023 Q4 is the bull run, that's far too short a bear period -- given that we had a whole year of rally just behind us.

It might not be the bull run, but it might be the bottom it will probably be around the part of the cycle when the Fed might start QE/BRRRRR-Money-Print again.

Also that the next halving probably needs to be factored into the timing (the rally doesn't come with it but only about a year after it).

The halving has never been priced in before that actual event. Bitcoin has always surged weeks after it. I learned not to play the devil's advocate, the hard way.

Really need the economy to "realise" it's bad though. May job reports was another higher-than expected month in the US so we're again presented with false bits of hope like that.

It will "realise" it in its own time. The Fed is using all its tools to be sure of it.

[davis196]

QT is merely an act for the Fed to control demand by removing cash/liquidity from the financial system. But before the people feel the real effects of QT, what will happen is, your savings will diminsh because of inflation, then as inflation is felt by companies through increasing expenditures, job lay-offs after another will happen. It's already starting. Tesla will fire 10% of its work-force, Coinbase has also started laying off some employees. Plus with less liquidity, some of these big banks/companies WILL start to FAIL. What would then the Fed do? START QE BRRRRR-MONEY-PRINTING AGAIN, AND BAIL OUT THESE COMPANIES! WAIT FOR IT IN 2023, OR 2024! New Bull Cycle after that.

Who the hell cares about Tesla? They are a government supported company, that would have gone bankrupt long ago, if the government wasn't financially supporting their pretentious and failing business. Does anyone really believe that electric cars and big li-ion batteries are the future?
Anyway, this QT thing seems a little bit exaggerated to me. The Federal Reserve cannot risk creating another big depression by extracting too much money out of the circulation. The process of QT will most likely be slower and less stressful for the economy and the financial sector.
The central bankers might be corrupted, but they aren't that stupid.

[stompix]

Tesla will fire 10% of its work-force, Coinbase has also started laying off some employees.

Bulishhhh!!
I'm sure the ones that were fired and are out of a job will put all their debt into bitcoin! /3x s

New Bull Cycle after that

Because we're experienced a hell of a bullish cycle right now with all that money printing, one tiny drop more than half a month ago and we would have been at 2017 prices.  But I do love this, the government is injecting money, good for bitcoin, the government is removing money, good for bitcoin, gov is not doing anything good for bitcoin, and leaves fall from the trees good for bitcoin.

I don't understand why is so hard to figure out that people without money can't invest and the more poor people you have on the planet fewer investors you have too.

[fiulpro]

When the government of US asked the employers to hold onto the jobs for a bit longer to tighten inflation I knew this is all going to blow up so fast. At the end of the day there are few responsibilities that a Government has and one of them being ' able to have enough jobs for the people ', people are already leaving their jobs as well therefore when we talk about Feds and when we talk about their policies, we do understand that a senario like this would be very much possible, people would not have any say in the decreasing value of money and at the end of the day everyone will end up going towards things like Bitcoins and other cryptocurrencies, which will eventually raise the price, but we also have to consider CBDC's as well.

[naira]

Here we try to understand how the banking concept works. Did you know that banks are poor? Bank Royal of Scotland, Bank Santander or Bank Deutsche. Because they are said to be poor they have a Fractional Reserve Banking system. You should know that banks lend money, from printing presses that are not owned by the bank itself.

Hasn't bank lending been going on for a long time now? the biggest crime but is recognized as an act that is considered normal. Then the central bank raises interest rates and the victim pays taxes, doesn't the bank steal from the taxpayers?

I've heard the saying from John Adam: If power can be controlled or concentrated in a few hands, then we will see political power flowing in a system that deviates from the norm of people's interests only to produce a financial system only for the interests of oligarchs and anarchists.

[savetheFORUM]

New Bull Cycle after that

Because we're experienced a hell of a bullish cycle right now with all that money printing, one tiny drop more than half a month ago and we would have been at 2017 prices.  But I do love this, the government is injecting money, good for bitcoin, the government is removing money, good for bitcoin, gov is not doing anything good for bitcoin, and leaves fall from the trees good for bitcoin.

I don't understand why is so hard to figure out that people without money can't invest and the more poor people you have on the planet fewer investors you have too.

I have to remind everyone that the money is not gone. That is what the problem is with today's prices, people are moving their money out, and moving it into interests and all that, which is fine by me, but the money is there, it's not fully gone.

You have to realize that almost 50% of all the money printed in the USA history ever was printed in the last 2-3 years. If you see that, you realize that no matter where that money is, no matter how much of it is withdrawn from the markets, it is still "there", which makes it less valuable to me and to everyone else that will ever need it. Which is why I believe that crypto prices will soar in the future.

[adaseb]

Basically there is a very low unemployment numbers and with high inflation numbers last Friday. It means the fed needs to be more aggressive in its hikes. It’s already speculated the next hike will be 75bps.

They need to destroy demand and need to start to reduce employment because the tight job market is one reason why inflation is getting out of control.

Needs to do this quick before things start to get out of hand.

[Wind_FURY]

I believe there are some countries around the world that have started implementing price controls. That will cause more shortages in the supply side, because the producers are not getting the fair market price vs. the expenses/costs to make them. When there are shortages, there will be rationing. Has your local grocery started rationing some food items?