Original | Liu Jiaolian
Overnight, BTC remained at $60,000. For the first time in BTC history, a strange scene occurred: the 100-week moving average crossed the 200-week moving average upward, forming a "golden cross".
After the Mid-Autumn Festival, the Federal Reserve will hold a meeting to decide on interest rates. This time, the interest rate cut is almost a done deal. The only disagreement is about how much the first rate cut should be. Is it 25bp or 50bp? It is said that Federal Reserve Chairman Powell is consulting with the board of directors, and there are still differences within the board of directors.
The good news is that the market has changed its attitude from fear of a recession to welcome a larger rate cut. The logic has changed. Therefore, a 25bp cut is a positive, and a 50bp cut is an even greater positive.
The most important thing for the Federal Reserve now is to ensure that interest rate cuts and the U.S. economy are implemented safely at the same time.
Some people are upset that the Fed failed to achieve its strategic goal in one stroke during this round of interest rate hikes. However, the situation is stronger than people. No matter how many American soldiers and American-made artillery shells are sent, the 38th parallel cannot be crossed. So they have to sign and admit defeat.
In Anglo-Saxon culture, there is no such thing as refusing to surrender. If you can't win, surrender is commonplace.
September is the 38th parallel for the Federal Reserve.
The Fed cannot cross this line. As early as a year ago in 2023 [“9.5 Teaching Chain Insider: The U.S. Dollar and U.S. Bonds in One Game & Deduction of the Approval Time of Spot ETFs”], Teaching Chain talked about that U.S. Treasury Secretary Yellen issued more bonds in August 2023, over-financed, and promised to repurchase the U.S. bonds that were over-issued last year in 2024.
Therefore, in its internal reference on September 5 last year, Jiaolian gave the reasoning that in the middle of 2024 or the third quarter, that is, from June to September, Powell would cut interest rates to cooperate with Yellen's repurchase. September is the "deadline" of this time window.
Yellen wants to buy back the US Treasury bonds that were over-issued last year. This is a maneuver to confuse the market: through the repurchase operation, the long-term bonds on paper (such as 10-year US Treasury bonds) are essentially turned into short-term US Treasury bonds (1-year).
It's a bit like "You are interested in the interest I give you, and I am interested in the principal you give me", isn't it?
The United States is fighting on two fronts and is short of money. Yellen had no choice but to resort to this measure.
So we have to buy back US bonds this year.
The well-known and deterministic logic is that if the Federal Reserve cuts interest rates, U.S. Treasury yields will inevitably fall, and therefore, U.S. Treasury bonds will definitely rise.
So we have seen recently that a lot of "smart people" seem to have appeared overnight, and have been deceiving people online into buying U.S. bonds.
Think about it carefully. It is 100% certain that the Fed will cut interest rates and US Treasury bonds will rise. The question is, is the rise that everyone knows about still an opportunity to make money?
Yellen repurchased US bonds and helped the leeks to pull a plate? Does this mean that all the good things in the world have been done by the Federal Reserve and the US Treasury?
Therefore, it is necessary to gradually issue new bonds to replace old bonds, and in conjunction with interest rate cuts, gradually replace high-interest bonds issued during the previous high-interest period with low-interest bonds.
What's more, last year, Mr. Buffett was "ordered" to take over a large amount of U.S. Treasury bonds to cooperate in completing the bond issuance task (refer to the article "Buffett Hoards Hundreds of Billions of U.S. Treasury Bonds" on Jiaolian on August 9, 2023). Now that interest rates are going to be lowered, it's time for Mr. Buffett to gradually unwind and exit, right?
Whether it is issuing new bonds or selling U.S. bonds, all of these require a large number of leeks to enter the U.S. bond market and take over for Yellen and Buffett.
Therefore, they have to start a public opinion offensive, making a fuss about the impeccable proposition that "the Fed's interest rate cut will inevitably lead to an increase in U.S. debt" in order to brainwash the leeks.
If you can’t harvest the big country, can’t you harvest the leeks?
For the so-called interest rate cut to take effect, there are still many arrangements to be made and many nets to be stretched to ensure that "friends" can land safely.
The Fed’s last stand.
From July to September, short-term U.S. Treasury yields have fallen by nearly 13%, which means that the corresponding U.S. Treasury bonds have risen by nearly 15%.
During the same period, gold rose by more than 12%.
Bonds went up, but the dollar went down.
BTC is still in a downward channel and is undervalued. BlackRock has worked hard to develop a spot ETF, but it is impossible for it to be a one-time deal.
The depreciating and flooding U.S. dollar will enter BTC.
Yellen smiled. Buffett smiled. BlackRock smiled. All the "friends" smiled. This is a good rate cut and a good implementation.
Seeing that their "friends" are all laughing, Powell and the other Federal Reserve board members can also smile with confidence.
(Official account: Liu Jiaolian. Knowledge Planet: reply “Planet” to the official account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrency is an extremely high-risk product and there is a risk of it returning to zero at any time. Please participate with caution and be responsible for your own actions.)
