Fed, US , Russia, China

Back in 2008 I posted about how the reserve currency of the world changes every ~100 years.  The USD has passed 100 years since the Federal Reserve was created, but we still have until 1932~1944 for USD to hit 100 years as the official reserve currency.   Looking ahead, The Fed, US Government and Russia/China know our 'kick the can' debt machine will run out of runway in the decade(s) ahead.

In advance of this event, Russia/China have been purchasing gold, and in the case of China banned Crypto currencies.   The US and FED knows this.

So if the world will eventually move off of the USD, what is the best options for the US to align as the new reserve currency?  Gold is terrible as it puts control to who can dig gold up quickest, and it isn't easily useable in international exchange.   China/Russia currency puts the world at the mercy of dictatorships.

In steps Crypto!   The FED asked for feedback on crypto USD, signaling the future of the USD.  Making USD into crypto alone doesn't change the world, as it could be viewed as similar as Tether. What will be a change is when ALL USD is only valid if on the USD blockchain.  When that occurs, the government could in seconds stop all USD change with any nation, like Russia.  Each movement of dollars could be tracked down to the penny of who sent money to who.  That is a game changer.

Some have speculated the USD may ban Bitcoin, I don' think so.  They can bury Bitcoin with regulation, taxation, or other measures.   Bitcoin must survive as a 'plan b' for the USD world reserve currency (store of value, not actually a currency) for international banks to exchange reserves.   This could become the alternative to USD for 'reserves' only, not for actual money per say.

Last night, 3/9, Biden issued an executive order on Cryptos.  While itself doesn't say much, the timing is huge.  Russia is trying to take over the Ukraine, the US is doing everything it can to financially punish Russia, and Biden just signaled to the world, the US is moving forward.  Russia and China will be offering a backward look, gold and central control.

The world will need to choose in the years ahead.  Go Crypto!

The jump the shark moment?

The Federal Reserve bank just froze bank reserves within Russia.  This step has been taken before from what I read in WW2.  We are dancing on the edge of something big in the USD financial system.  Dare I say that the cascading consequences of asset devaluation in Russia, and counter party risk, plus assets unable to pay debts, we are lighting a fuse.

I know the US must take such steps to discourage Russia from aggression.  Ukraine is paying the highest price right now, but the world may also suffer with economic consequences.  I still think the market rebounds to form a mega right shoulder, but it wouldn't surprise me if the market throws in the towel from here.

Changing World Order, by Ray Dalio

 Ray Dalio is a world leader in financial markets, as head fund manager of Bridgewater Associates, managing over 140 Billion dollars.  I am very pleased to share a well done summary of how our current global finance fits in the the history over the last 500 years.

History doesn't repeat itself exactly, but patterns do exist.  This is true simply because age old issues humanity faces are consistent across our entire history.  The shape and situation varies, but human social and economic problems are never resolved.

The last post was on effects of QE and the financial suppression (not expansion) it promotes.  This video puts into context the forces driving central banks to repeat the failures of the past.

Does the FED print Money?

 I have been watching Emil Kalinowski for about the last year, he does a fantastic job as a youtuber talking about Macro economics and the banking system.

This excellent video really digs in about the FED QE effects, they do NOT print money, they only generates bank reserves.  Most people believe FED QE promotes economic growth, in reality it is financial repression every time they do a QE.  It does promote existing wealth, not new growth.   
Grab a cup of coffee, grab a seat in a quiet area, it is a dense listen.

Economy is hot, market new highs before breaking?

 The economy is on fire, with hiring at huge pay increases.  That's good right?

Well, for the Federal Reserve Bank, the worst situation is run-away inflation.  That is the only way for the US dollar to become no longer the store of value the world depends upon.   There are soo many bonds out there, that if fear truly took hold, we would see rates catapult quickly as treasuries dump.

So the FED is forced to throw water on the economy.  The top 0.05% of the wealthiest are looking further out than the vast majority of investors.  IF (this is an IF) the FED must take aggressive action, the wealthiest will dump as it becomes more apparent the FED must take action.

The saying is Never fight the FED, well, this is the same for up and down for the market.

But I do think the market will move higher first.
The purple outlines the 'head and shoulders' mega topping pattern we may be seeing unfold.
We had many people in total fear, since the top, and huge fear with Russia.  Russia will pass, America will open up from COVID, and I think we get a nice bounce into the summer, then fail hard core before the elections.  The top is still likely in, simply because as the market tries to make new highs, there will be more dumping by the top 0.05%.  Good luck!