Will He Or Won’t He?! Powell Testimony Has The Answers!

Last week Federal Reserve chairman Jerome Powell testified to Congress About the central bank's ongoing Interest rate increases and the effects They're having on the economy Jerome's Comments not only moved the markets but Also shed light on the fed's role in the Ongoing crypto Crackdown in the United States They also suggest that this crypto Crackdown is far from over today I'm Going to summarize Jerome's testimony And tell you exactly what his comments Could mean for the markets and for the Crypto industry Normally I'd start with a recap of what The FED has been up to but this time I'll just give you any additional Context as we go along this is because Jerome spent more than five hours Testifying to U.S politicians across two Days I'll stick to the most important Parts to keep it short and clue you in As needed Now Jerome's first testimony took place Before the U.S Senate specifically the Senate Banking Committee if you've Watched any of our other summaries of U.S hearings you'll know that the Banking Committee is where many crypto Related hearings have happened which I Suppose isn't surprising In any case the hearing began with Opening statements from the top ranking

Politicians on the committee the first To go was committee chair Sherrod Brown He talked about how inflation is hurting Regular people but raising interest Rates won't help fix it because it's Been caused by supply shortages Sherrod also said he takes issue with The fact that the Supreme Court recently Accepted a case arguing that the Consumer Financial Protection Bureau or Cfpb is unconstitutional This is because the cfpb is funded by The FED but is apparently not overseen By the FED nor by U.S politicians in Congress If you watched our video about operation Choke point 2 you'll note that the cfpb Was allegedly behind operation choke Point 1. as such it's possible that the Cfpb is behind the ongoing operation to Debank the crypto industry given that it Was created by Elizabeth Warren who is Extremely anti-crypto if this is indeed The case then it's quite possible that Operation choke point 2 could end if the Supreme Court deems the cfpb to be Unconstitutional now I am by no means an Expert on the Constitution or the cfpb But I don't imagine it's legal for a Significant government body to be Operating with basically zero oversight Don't even get me started about the Intelligence agencies Anyhow conspiracies aside the second

Politician to speak was Tim Scott who Took over pro-crypto politician Pat Toomey's position on the committee after Pat retired last year in stark contrast To Sherrod Tim insisted that inflation Is being caused by excess demand namely All the money printing by the government Tim also begged Jerome to ensure that The FED stays apolitical and doesn't Start getting involved in things like ESG investing if you watched our recent Video about ESG regulations in the European Union you'll know that the European Central Bank is on board with This concerning investment ideology then It was Jerome's turn to speak and he Sounded well exactly the same as he does During the fed's press conferences like A disappointed grandfather reading Junior's underwhelming school report Over Sunday lunch He talked about how inflation is well Above the fed's two percent Target how The economy is still strong according to Unemployment statistics and that this Means that the FED needs to keep raising Rates Jerome also specified that the fed's Interest rate decision later this month Will ultimately depend on the incoming Data now as an aside the recent CPI Print did indeed show that inflation was Still increasing although only by 0.4 Percent and that increase was in line

With expectations so the FED sure is Going to have a tricky decision on its Hands anyway once Jerome was done the Question period began Sherrod was the First to go and he asked Jerome whether This wave of inflation is different from The others Jerome acknowledged that There are supply-side issues that the FED can't affect but that there's also Lots of work to be done on the demand Side Sherrod also asked Jerome about the Risks crypto poses to the banking system Jerome said that the FED has been quote Very active in making sure crypto Doesn't affect the banking system and to His credit Jerome said the FED doesn't Want to stifle Innovation but also Doesn't want Banks to go under Well I guess the people in power have Their fair share of scapegoats to choose From now don't they cynicism aside the Second set of questions worth covering Came from Bob Menendez Bob asked Jerome What would happen to the economy if the U.S government defaults on its debt Realizing this was a political question Jerome gave a political answer Congress Needs to raise the debt ceiling now if You're wondering exactly what will Happen to the U.S economy if the US does Default on its debt you can check out Our video about that using the link in The description I digress now Bob also

Asked Jerome when the fed's Mandate of Keeping inflation at around two percent Comes into conflict with the fed's Mandate of also keeping unemployment at Around four percent Jerome had a clever answer and that's That it won't happen anytime soon Because unemployment is still sitting at Historic lows at least on paper the Third set of questions worth covering Came from John Kennedy John pressed Jerome about whether the FED is Purposely trying to increase Unemployment with its rate hikes Jerome Tacitly admitted this was the case but Refused to admit to John that Unemployment could rise as high as 10 Percent The fourth set of questions worth Covering came from Mark Warner Mark Asked Jerome about debt levels in the U.S economy what's odd is that Jerome Started rambling about the housing Market and said that many of the empty Offices in the United States will be Converted to Apartments funnily enough This is exactly what we predicted would Happen in our video last summer about The housing market crash a contraction In demand for short-term and long-term Rentals combined with an increase in Supply of short-term and long-term Rentals will eventually result in lower Housing costs more about that in the

Description moving on Mark went on to ask Jerome about the Crypto industry and the non-banking Sector in general what's scary is that Jerome said stable coins need Regulations because they're like money Market funds this is scary because it's Exactly the same thing that SEC chairman Gary Gensler has said about stable coins Put simply it foreshadows a Crackdown on Stable coins by the SEC which may have Already happened by the time you see This video on that note the fifth set of Questions worth covering came from Elizabeth Warren patron saint of the Anti-crypto movement Elizabeth spent her time blasting Jerome Over the fed's rate hikes forcing him to Admit that they will result in millions Of people being unemployed and likely Causing a big recession the only thing More intense was the sixth set of Questions worth covering which came from JD Vance JD asked Jerome about the Drawbacks of the US dollar being the World's Reserve currency Jerome conceded That it was a good question and spent Most of his time talking about the Benefits of the USD Jerome also Highlighted the fact that there Currently isn't any currency which could Replace the US dollar as the world's Reserve currency even so history Suggests that this is inevitable it's

Not beyond the Realms of possibility That BTC could eventually become the World's Reserve currency if central Banks start holding it more about that In the description Anyways the seventh set of questions Worth covering came from Kevin Kramer Kevin asked Jerome whether the fed's Climate stress tests of large Banks Include assessing the risks coming from An energy grid that relies on Intermittent sources like wind and solar Surprisingly Jerome said that they don't Jerome also admitted that he's concerned The climate stress test being conducted By the FED are a slippery slope to the Institution's politicization Some would say that the FED is already Politicized especially given its key Role in the ongoing crypto Crackdown but That is a topic for another time The eighth set of questions worth Mentioning came from Catherine Cortez Masto Catherine asked Jerome why the Fed's two percent Target is so important Jerome said it's important because all The central banks agreed to adopt the Two percent Target in 2012. for context Many believe the FED could soon raise Its two percent Target obviously Jerome Stressed that the FED has no plans on Changing its two percent inflation Target it's believed that this is Because changing the inflation Target

Would irreparably damage The credibility Of the fed and all other central banks This is because people would always Wonder if the target will be raised Again essentially it destroys the fed's Efforts at forward guidance Now the ninth set of questions worth Covering came from Cynthia Lamas who is A very pro-crypto politician naturally She asked Jerome about the warnings the Fed and other Regulators had issued to Banks working with the crypto industry Jerome reiterated that stable coins Require more regulation this time However Jerome specified that the fed And other Regulators take issue with Stable coins on Smart contract Cryptocurrency blockchains and further Specified that stablecoin issuers need To be regulated like Banks until that Happens we can expect the Crackdown on Stable coins to continue now the last Set of questions worth covering from the Senate hearing came courtesy of Kristen Cinema Kristen asked Jerome how War impacts Monetary policy shockingly Jerome said That the FED doesn't pay attention to Geopolitics this can't possibly be true Given that geopolitics clearly have an Impact on inflation Kristen also asked Jerome again about the warnings the fed And other Regulators had issued to Banks Working with the crypto industry Jerome

Repeated that the fed and its allies are Being cautious about crypto's impact on The banking sector and want Banks to be Hyper aware of the risks associated with It this is also a bit dishonest because The Practical effect of the fed's Warnings is that the banking sector has Shied away from serving the crypto Industry Now this brings me to Jerome's second Testimony which took place before the U.S House of Representatives Specifically the financial services Committee if you've watched any of our Other summaries of U.S hearings you'll Know that the financial services Committee has likewise concerned itself With the crypto industry like the Senate Hearing the house hearing began with Opening statements from the top ranking Politicians on the committee The first to go was committee chair Patrick McHenry who happens to be Pro-crypto Patrick spent his time Slamming fed Vice chair Michael Barr who Wasn't present if you watched our video About Michael Barr you'll know that he Wrote the law which created his own Position at the fed the law in question Is the Dodd-Frank Act which also happens To include the creation of the cfpb This law even legalized bank balance Wherein A bank's deposits can be used to Keep a bank afloat during a crisis

Patrick was upset about Michael because He was reviewing Capital requirements at Banks in the United States presumably Because he intends to raise these Capital requirements This would ultimately lead to a Consolidation of the banking sector Which we are coincidentally seeing in Real time probably nothing Anyhow the second politician to speak Was Maxine Waters who famously blew a Kiss to FTX and Alameda research founder Sam bankman freed she spent her time Talking about the debt ceiling and her Concerns about a debt default I reckon She should be concerned about a full-on Investigation What's strange is that two more Politicians then briefly spoke typically It's just the chair and the second in Command the only one worth mentioning is Bill Foster who wanted the US government To have the power to reverse Transactions on cryptocurrency Blockchains yes I wish I was joking as For Jerome his opening statement was Almost identical to the day before I Should point out that Jerome's comments On both days caused the markets to slide This is because investors are concerned That the FED will be pausing its rate Hikes or even lowering interest rates in Response to whatever inflation data Comes to light once Jerome was finished

The question period began Patrick went first and he went straight For the jugular what will the FED decide At the March meeting Jerome explained That this depends on the data they get Between now and then and confirmed that Keeping rates higher for longer was on The cards Patrick then pressed Jerome about what Michael is planning with his review of Capital requirements believe it or not But Jerome admitted that he has no idea What Michael is up to he said that all The information is being kept within Michael's own team and they have yet to Recommend anything Now the second set of questions worth Covering came from French Hill French Asked Jerome whether the FED will be Issuing a retail Central Bank digital Currency or cbdc Jerome said that that's up to Congress French followed up by asking Jerome About the fed's upcoming fed now fast Payment system if you watched our recent Video about cbdc's you'll know that fed Now is analogous to a digital dollar French ask Jerome why the Fed was Planning to roll out fed now in a few Months time given that it appears to be Complete Jerome didn't have a straight answer but I have a few theories For one thing there's a concern that

Fednow could place smaller banks at risk That's because the ability to instantly Withdraw 247365 means that their customers could Basically run on the bank and withdraw Perhaps the FED knows how precariously Positioned these banks are and is Worried about letting the cat out of the Bag it's also possible that the FED Wants to try and get rid of stable coins First take a second to consider that Usdc wouldn't have depegged if Circle Had the ability to process redemptions 24 7 with fed now note that Circle had This ability via silvergate's exchange Network before that crypto Bank was shut Down speaking of which the next Politician to ask questions was Brad Sherman who is very anti-crypto he Didn't ask any questions worth covering Because he spent so much of his time Talking smack about crypto that his time Expired something along the lines of Crypto not wanting regulation and such Anyhow the third set of questions worth Covering came from David Scott David Told Jerome that he'd heard that the FED Is planning on drastically increasing The capital requirements for small Banks Which would put most of them out of Business he asked Jerome whether this Was true Jerome said he didn't know Recall that Michael Barr is secretly Reviewing these Capital requirements the

Fourth set of questions worth covering Came from Frank Lucas who expanded on David's previous questions about Capital Requirements Frank said that he had heard that the FED is planning on increasing Capital Requirements for banks with exposure to Commodities for climate related reasons Jerome denied that the FED is looking to Implement climate policy in such a Manner but I certainly wouldn't put it Past Michael Barr note that the Politicians asking these questions came From both sides of the aisle call me Crazy but I think they know what's Coming and they've known for a while Now the fifth set of questions worth Noting were similarly spicy and came From Stephen Lynch he asked the FED why It hadn't provided any updates about its Cbdc development Jerome said it's because the FED is Still in the early stages of cbdc Development but said that updates will Be coming soon Stephen then asked Jerome about fed now Which is not a coincidence when you Remember that fed now is analogous to a Cbdc system Jerome tacitly confirmed That fed now would likely eliminate the Need for stable coins and went on to Ramble about cbdc's further confirming That the two are related Stephen took things one step further by

Asking Jerome whether alternative Currencies would go to zero once fed now Is introduced Jerome seemed to confirm This is the case which is terrifying the Only thing more terrifying was the sixth Set of questions worth covering which Came from Blaine Lewis Blaine asked Jerome how much money the FED is paying The cfpb Jerome had no idea yikes As a sour cherry on top Jerome later Revealed that he had effectively Appointed Michael Barr as second in Command after fed Vice chair lail Brainard announced her resignation Earlier this year the concerns continued In the seventh noteworthy set of Questions which came from Andy Barr Anti-aust Jerome whether he would commit To not raising Capital requirements at Banks Jerome said it wasn't his call Because it's a decision that's made by The fed's Board of Governors Andy Then Followed up by asking Jerome whether the Decision to implement climate stress Tests was made by the fed's Board of Governors no said Jerome the decision Was made by a single unspecified person Andy was in awe and correctly pointed Out that this is a big big problem Following a few more questions about Capital requirements from politicians From both parties who had heard rumors They would be raised Bill huzenga asked Jerome why it was that fed officials had

Advised against scrutinizing asset Managers like BlackRock and Vanguard Jerome didn't have an answer The ninth set of questions worth Covering came from Warren Davidson Warren asked Jerome about crypto Regulation he said that it looks like There's an operation choke point two Going on and ask Jerome whether the FED Is regulating via enforcement Jerome Confirmed that this is the case Say you know who else has been Regulating by enforcement that's right The SEC nothing to see here anyhow the Tenth set of questions came from John Rose John asked Jerome about the FED Funding the cfpb he revealed that up to 12 of the fed's entire budget goes Towards funding the cfpb and asked how Much is being spent Jerome reiterated That he doesn't know because the FED has No oversight Madness The only thing matter than that was the 11th set of questions worth covering Which came from William Timmons he asked Jerome whether the FED would accept a Trillion dollar coin Jerome didn't say No He said something along the lines of That would be like pulling a rabbit from A hat now for reference the trillion Dollar coin is a concept that was Created the last time there was a debt Ceiling standoff in 2011. it essentially

Involves the U.S government creating a Coin declaring that it's worth one Trillion dollars giving it to the fed And getting one trillion dollars in Return it's a constitutional loophole of Sorts anyhow following even more Questions about Capital requirements and The cfpb from politicians of both Stripes Brian stale revealed that the U.S government will spend 14 of its Money on paying the interest on its Massive debt in the next decade hmm I Reckon they'll find a way of kicking That can down the road okay now for the Big question what does Jerome's Testimony mean for the markets and for The crypto industry well let's start With what it means for the market In short jerem's testimonies suggest That the FED will keep raising rates the Caveat is that Jerome said all of this Before the recent banking crisis Investors now believe that the FED will Either raise rates less aggressively Stop raising interest rates or even Lower interest rates in response to the Banking crisis but if you watched our Recent video about Silicon Valley Bank You'll know that a big part of why it Went under was bad management one could Argue that this was also the case for The other banks that went under and it's Arguably the case for the other small Banks that are facing higher Bank Run

Risks investors can see that their Balance sheets are weak and are Encouraging Bank runs while shorting Their stocks leading to more concerns in Other words higher interest rates Probably aren't ultimately to blame for The recent banking crisis and it is Therefore unlikely that the FED will Respond the way that many investors Expect the fact of the matter is that Inflation is still far from the fed's Two percent Target and unemployment is Still well below the fed's four percent Target So long as the markets for U.S Government debt don't break the FED will Keep raising rates they seem to have the Tools to address any emergent crises This ties in to what Jerome's comments Mean for the crypto industry from where I'm standing the collapse of silvergate Bank and Signature Bank were Fundamentally caused by the fed's Warnings this is because they forced Crypto companies to move all their Assets to just two Banks which Concentrated the risk now that both Crypto banks have collapsed the fed and Other anti-crypto Regulators have the Ammunition they need to crack down on The crypto sector and stable coins in Particular The government-controlled media is Already trying to pin the collapse of

All three banks on crypto if this is the Narrative The Establishment runs with The Crackdown on crypto will continue And stable coins would be the primary Targets in some then it seems that Neither the markets nor the crypto Industry are out of the woods just yet For the former inflation needs to come Down unemployment needs to rise or the Market for U.S government debt needs to Break otherwise the FED will continue to Raise rates and keep them higher for Longer for the latter the fed and its Allies will continue to regulate by Enforcement until reasonable crypto Regulations are passed in the United States Given that the current Administration is Not so subtly behind the ongoing crypto Crackdown this means it may not stop Until after the 2024 elections so make No mistake the next election cycle in The United States is going to be insane I suspect we're going to see no shortage Of AI generated deep fakes extensive Internet censorship and perhaps a Significant escalation in both domestic And international conflicts now Bitcoin Will eventually fix things like this but Not for a while yet


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