Fed Cuts Interest Rates for First Time Since 2008 Crisis!!
The Federal Reserve cut interest rates on Wednesday for the first time
in more than a decade, as it tried to keep America’s record-long economic expansion going by insulating the economy from mounting global risks.
The widely expected quarter-point decrease was the Fed’s first since it slashed rates to near zero in 2008. But unlike those cuts, which were intended to rescue a failing economy, Wednesday’s move was seen as a precautionary effort to protect the United States from slowing growth in China and Europe and uncertainty over President Trump’s trade war.
Read Again.. Fed cuts interest rates for the first time since the birth of Bitcoin.
LOW INTEREST RATES CANNIBALIZE YOUR SAVINGS
Low interest rates are designed to encourage spending and investing, not saving.
Think about it like this. The best savings accounts in the US only offer ~1.9 percent interest
. Since the Fed cuts, you can expect that to go lower.
INVESTORS LOOK FOR BETTER RETURNS IN BITCOIN?
Cutting rates is designed to encourage investors to put their money in the market. But after a decade of low interest rates, it’s not easy to find a good return.
Investors will start to look elsewhere to put their money. And it’s getting harder to ignore the best performing asset of the decade
, bitcoin. In the absence of traditional yields, investors will cautiously start allocating to bitcoin.
BITCOIN: BETTER ECONOMICS
Today’s rate cut is a good time to think about the broader economics of fiat money. Is endlessly printing money a wise decision? China, Europe, Japan, and the US are all easing monetary policy in a race to stay competitive on the global arena
It might temporarily boost stock markets. But the average person putting their hard-earned money in a savings account is getting screwed.
Bitcoin may not be perfect, but it’s an alternative.
Bitcoin’s supply can’t be manipulated or expanded at will. It can’t be used for global power games
. The supply is hard-limited at 21 million. No more will ever be created or “printed.”
Bitcoin’s daily supply is programmed and kept in check by an evolving “difficulty” algorithm. The output is predictable and impossible to manipulate.
BITCOIN DAILY SUPPLY DECREASES AND THE DOLLAR INCREASES
Bitcoin is a scarce asset while the dollar’s supply is abundant and ever-growing. Supply and demand economics tells us scarcity is more valuable than abundance.
To put this in perspective, bitcoin will cut its daily supply in half
in May 2020. It’s about to get more scarce. At the same time, the Fed is about to flood the market with dollars.
Which would you rather be holding?