Fed rate hike during 2022 and bitcoin

[Hold-n-play]

hi everyone,

Will Feds continue raising rate during the rest of 2022 and how this will affect the crypto? One can assume that at some point, crypto market may become less dependent on those rate increases. The other question is whether feds will continue raising the rate in the light of upcoming mid term elections fearing recession/potential job losses.

Any thoughts?

[Despairo]

Do you think the interest rate from banks are better than the Bitcoin volatility as long term investment? That's really bad comparison. Even a the highest interest rate banks can offer didn't make you earn profit, but you will pay more due to banks charge, fees, etc. You also doesn't need to forget, fiat has high inflation rate, the more your money doesn't mean your value will increase too!

Raising interest rate to fight against inflation isn't entirely correct solution, if they want to really stop inflation, they must not print money anymore.

[DooMAD]

if they want to really stop inflation, they must not print money anymore.

If that was an option, someone would have tried it by now.  Continual printing of money in a debt-based system is one of those baked-in requirements.  If they don't print more, the whole thing collapses.

The Debt Monster is insatiable.  It must be appeased. 

[avikz]

hi everyone,

Will Feds continue raising rate during the rest of 2022 and how this will affect the crypto? One can assume that at some point, crypto market may become less dependent on those rate increases. The other question is whether feds will continue raising the rate in the light of upcoming mid term elections fearing recession/potential job losses.

Any thoughts?

Inflation is a big challenge right now, to the entire world. There is one prominent way to fight it - Raising the interest rate so that the cash can be sucked out of the economy to the hands of the banks so that people spend less money and demand decreases. The challenge is even harder now because of the increasing prices of oil and gas. It has a direct impact on anything that requires logistics support. But that's something a government of non-oil-producing country can't control.

So banks around the world are raising interest rate because that's the thing they can control. So if the inflation doesn't show any impact of slowing down due to the recent interest rate hike, I foresee more hikes coming to us in future. But crypto should be negatively from such actions. because when the interest rate hike happens, people with additional funds, may move to banking investment because the banking investment would provide additional return to the investor.

But considering the crypto market condition now, we can expect more money to be invested there. Because the price is standing at a very low level and bullish people should invest more on cryptos to make the future brighter than ever.

[Charles-Tim]

Will Feds continue raising rate during the rest of 2022 and how this will affect the crypto? One can assume that at some point, crypto market may become less dependent on those rate increases. The other question is whether feds will continue raising the rate in the light of upcoming mid term elections fearing recession/potential job losses.

The governments do no two things to fiat during foreign reserve depletion and to be able to pay workers wages and salaries, they depreciate the value of their fiat. This is not new and has been sicne the creation of fiat. Even if the price devaluation of fiat is not that significant in short term but bearly noticeable, it would definitely be very well noticable and significant in long term. You do not have to compare bitcoin to fiat than being a inflationary hedge, which means if you buy bitcoin, it will help your money value increase against the inflation as a result of fiat value depreciation.

Raising interest rate to fight against inflation isn't entirely correct solution, if they want to really stop inflation, they must not print money anymore.

If money is not printed anymore and people go cashless and depend on the internet for spending fiat, the government can still manipulate, increase or decrease (what is always happening is decrease) the fiat value. Money printing in a way it is more than the economic output can result to inflation, but if the economic output is more, inflation will never occur. To stop inflation is for government to continuously be depending on exports, not that importing, havimg excellent work force and increasing GDP and many other factors are to be considered, like not depending on borrowing but be self-sufficient. If you consider all these factors, you will noticed that it is almost impossible for a country not to have declination in their fiat value.

[P2PECS]

Well, I will give my opinion. I think the Fed is going to continue to raise interest rates and remove liquidity until it can't anymore, as this helps to fight inflation but with the credit addicted economy, this policy is going to lead to a recession. They will be like this for a while, and then they will go back to lowering rates and providing liquidity. I don't see the Fed raising rates for a long time and keeping them high for years.

Less liquidity means less liquidity to invest in general, so BTC will suffer, as is already happening, but at the minimum that the economy recovers, BTCwill be a clear winner.

[pawanjain]

Do you think the interest rate from banks are better than the Bitcoin volatility as long term investment? That's really bad comparison. Even a the highest interest rate banks can offer didn't make you earn profit, but you will pay more due to banks charge, fees, etc. You also doesn't need to forget, fiat has high inflation rate, the more your money doesn't mean your value will increase too!

Raising interest rate to fight against inflation isn't entirely correct solution, if they want to really stop inflation, they must not print money anymore.

Yeah, even I wish that the governments should stop printing money but that will never happen.
As long as we have traditional fiat system the governments will keep printing money and the inflation will keep on increasing.
The expense will keep on increasing and at some point it will lead to an economical collapse.
This is one of the main reason to hold decentralized assets like bitcoin.
The only reason I am holding fiat money is to use it as an emergency fund. Everything else is diversified into my porfolio.

[Hold-n-play]

Does anyone believe that Feds should start the rapid balance sheet reduction first, while raising the interest rates only after the reduction is finished? This will give some time to the ordinary people to let them have enough income to pay for their monthly bills. Rates up first then bonds price down then later Fed reduce balance sheet with a lower price then public Fed lost money to private bankers.

[Hold-n-play]

Will Feds continue raising rate during the rest of 2022 and how this will affect the crypto? One can assume that at some point, crypto market may become less dependent on those rate increases. The other question is whether feds will continue raising the rate in the light of upcoming mid term elections fearing recession/potential job losses.

The governments do no two things to fiat during foreign reserve depletion and to be able to pay workers wages and salaries, they depreciate the value of their fiat. This is not new and has been sicne the creation of fiat. Even if the price devaluation of fiat is not that significant in short term but bearly noticeable, it would definitely be very well noticable and significant in long term. You do not have to compare bitcoin to fiat than being a inflationary hedge, which means if you buy bitcoin, it will help your money value increase against the inflation as a result of fiat value depreciation.

Raising interest rate to fight against inflation isn't entirely correct solution, if they want to really stop inflation, they must not print money anymore.

If money is not printed anymore and people go cashless and depend on the internet for spending fiat, the government can still manipulate, increase or decrease (what is always happening is decrease) the fiat value. Money printing in a way it is more than the economic output can result to inflation, but if the economic output is more, inflation will never occur. To stop inflation is for government to continuously be depending on exports, not that importing, havimg excellent work force and increasing GDP and many other factors are to be considered, like not depending on borrowing but be self-sufficient. If you consider all these factors, you will noticed that it is almost impossible for a country not to have declination in their fiat value.

“Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”  Milton Friedman

[justdimin]

if they want to really stop inflation, they must not print money anymore.

If that was an option, someone would have tried it by now.  Continual printing of money in a debt-based system is one of those baked-in requirements.  If they don't print more, the whole thing collapses.

The Debt Monster is insatiable.  It must be appeased. 

It was an option, it was a clear option. When a corporation starts making x10 profit, whereas people are dying, then you know what you should be doing, not print more money. During the pandemic places like tesla, amazon, microsoft etc etc all made so much money, just give them a pdenmix tax, anyone who makes over a billion dollars profit would have to pay 90% of that as a tax, just for 2 years, and that would be the end of it.

You could have gotten nearly a trillion dollars for that, probably less but still a good amount. Then, do not do anything extra, just distribute that to anyone who was making under 50k dollars a year, and you would be actually helping everyone. But no, that would be "socialism", so why not let the poor die was the option they went with.