The macroeconomic flaws of macroeconomics are highlighted by the emergence of macroeconomic crises in China, Taiwan, and Pakistan.
"Fed Watch" a macroeconomic podcast that is true to bitcoin's rebellious nature, is called "Fed Watch". Each episode examines current macroeconomic events from around the world, with a focus on central banks, currencies, and challenges mainstream and Bitcoin narratives.
This episode of Fed Watch featured CK and I going through charts and giving market updates on bitcoin (DXY), the dollar (DXY), and the Hong Kong dollars. We then discussed the situation in Pakistan and asked the question: Is it the next Sri Lanka. We also discussed Taiwan/China and I was able to read important excerpts from Wang Yi, a Chinese foreign minister, and Wang Wen, a think tank expert.
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Bitcoin and Other Currencies
The show opened with a look at a weekly bitcoin chart. This is what we have done for the last few shows. It's a great way to anchor our discussion in bitcoin. Below you will see that the price is very stable and still above the level of the volume-by–price indicator.
The bitcoin price is very stable
Zooming out, we can see that the last week with weekly candles like today was September/October 2020 right before the massive rally from $10,000 to $45,000,000. We don't believe it will, but it is possible.
Today's bitcoin price is similar to the one it saw in 2020, when it went through a massive rally.
The Dollar Index (DXY), another major currency, was also taken into consideration. It is essential to look at the dollar in every episode.
Although it does appear that the dollar has reached its peak, there are no signs it will crash. The dollar will likely form a new, higher range than 100 over the next few years. Similar to its 2015-2020 higher range, this is likely to continue.
Source for above images: bitcoinandmarkets.com
A strong dollar is not a bearish sign for bitcoin, I will add. Although a strong dollar may initially be associated with lower bitcoin, it becomes more so when the dollar stabilizes in a higher range. This is where bitcoin has historically rallied.
Below is a screenshot taken from the Hong Kong Monetary Authority website. It releases statistics each month on its foreign currency reserves. These statistics are used to stabilize the peg. Last week, I suggested that the Hong Kong dollar (HKD), peg was quickly draining its reserves. According to the press release, it used less than 1% of its reserves to keep the peg in July. This means that the HKD will likely be able to keep it (if it so chooses) for many years.
Source HKMA
Pakistan on the Brink
The current situation in Pakistan shares many similarities with Sri Lanka's recent collapse. I mentioned i5w's involvement in the World Economic Forum (WEF) during the podcast. Pakistan has received funding in excess of $100 million to improve its agricultural sector and create national parks.
Source Twitter
A similarity between Sri Lanka and Pakistan is the significant role that Chinese funding played over the past decade. Sri Lanka lost control over its main port due to Chinese loans. Pakistan now has approximately $20 billion in high interest loans to China and Chinese companies.
Pakistan is in desperate need of new lenders, as it has two months to pay its budget. It has been rejected by the Chinese, and the Arab States are now reconsidering their options. The only option is to return to the IMF. That means severe austerity.
It is not surprising that Sri Lanka and Pakistan are both important nodes in Belt and Road Initiative (BRI).
Source Asia Green
The BRI is doomed, as I have repeatedly stated. China attempts to make routes and places economically viable where it has not done so in the long history of humankind. No amount of money will change millenia of history and eons worth of geography.
The Chinese central planners have bankrupted yet another important link in the BRI.
Taiwan/China Situation
Source AZ Quots
On my Telegram live streams, I have been talking about the Pelosi situation as well as the Chinese response for days.
This episode of Fed Watch features excerpts from a prominent Chinese minister and expert in Chinese think tanks. The full comments of Wang Yi can be found here. It is enough to say that he repeatedly repeated "One China" and called the U.S. side trying to alter the status quo. Tsai-Ing-wen, Taiwan's current president, was also a target of his savagery. He stated that she had "betrayed the ancestral spirits." Another translation of his original comments is Yi's. Yi's original comments indicate that she also betrayed her ancestors and her race.
Next, I read comments from Wang Wen (executive dean of Chongyang Institute for Financial Studies at Renmin University of China) and executive director of China-U.S. People-To-People Exchange Research Center). His comments, as well as many others, can be found here. He attempts to explain China's weak response and suggests that China shouldn't provoke an armed war with the U.S. unless it can "outperform" the U.S. in terms economic power, financial and military strength, and have an overwhelming capability to counter international sanctions.
It sounds far away. I will simply tell the reader not to get too caught up in fear-baiting rhetoric regarding Taiwan and China. They are Sun Tzu's disciples, who once said "appear strong even when you are weak." Wen also quoted Sun Tzu.
A major military conflict with the U.S. does not serve China's goal or provide a path to better living standards for its citizens. Remember what Sun Tzu said in 'The Art Of War: 'Don't act unless you have something to gain Fei LiBu Dong ; don't use military force without the certainty that victory Fei De Bu Yong, and do not go to war unless it is critical Fei Weibu Zhan em>
The podcast ended with discussion about the CPI data release, and other topics related to bitcoin.
This guest post is by Ansel Lindner. These opinions are not necessarily those of Bitcoin Magazine or BTC Inc.
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By: Ansel Lindner
Title: As Pakistan, Taiwan And China Reach The Brink, The World Needs Bitcoin
Sourced From: bitcoinmagazine.com/markets/pakistan-taiwan-china-need-bitcoin
Published Date: Tue, 30 Aug 2022 09:00:00 GMT
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