Chainfeeds Summary:
In this speech, Hayes explained why he is bullish on Bitcoin, why Kevin Walsh is not the hawk that people fear, and how a banking regulation that quietly came into effect on April 1 could unleash trillions of dollars in new credit.
Article source:
https://www.panewslab.com/zh/articles/019dd2da-e9ba-7456-a862-8570640eb825
Article Author:
Arthur Hayes
Opinion:
Arthur Hayes: Over the past few days, I've been deeply reflecting on how money printing policies will evolve, taking into account the development of AI and the situation of the Iran war, which led to this presentation. Clearly, my stance has shifted to a more bullish one, and I'll explain why below. Of course, we cannot ignore the ongoing war, so before delving into my core arguments, I must establish a few assumptions. First, we will not die from nuclear annihilation; because in the event of nuclear annihilation, any investment would be meaningless, so let's set that concern aside for now. Second, the market will view this event as some kind of "short-term" event, whatever that means. Now is the time to think about money creation and printing, and what that means for Bitcoin. Every morning, I analyze the actual impact of the war on my portfolio using a chart from Bloomberg. This chart shows the price difference between the six-month WTI crude oil futures contract and the current month contract. I don't care about Trump's or Iran's propaganda war; my only concern is: are there enough commodities and oil passing through the Straits smoothly? The chart shows that the situation has improved, meaning that front-end prices are trending towards back-end prices, indicating that while the situation is bad, it's not at its worst. So I can temporarily ignore it and continue thinking about other things. Every time I speak, I always talk about printing money. However, my thinking has shifted since my last article about two weeks ago; I now believe that liquidity will turn positive in the medium to long term. On the negative side, we see deflation caused by AI. There's been a lot of discussion about how many knowledge workers will lose their jobs because efficient and inexpensive models can perform knowledge-based work. A few months ago, I wrote an article outlining my expectations for these losses. I believe this could cost the banking system hundreds of billions of dollars. As for the Federal Reserve, I'll discuss that later. The market is very concerned about Kevin Worsh, the nominee for Fed Chair, with everyone speculating whether he'll be a hawk or a dove. I will analyze his statements objectively; basically, they are neutral, neither beneficial nor harmful to liquidity. Those market participants who panic about Worsh being a super-hawkish Fed Chair haven't grasped the underlying signals. Finally, let's look at commercial bank lending. Why is commercial bank lending increasing? Why is the war economy in the US and overseas prompting banks to extend more loans to those involved in various weapons production and related component manufacturing? Furthermore, changes in banking regulations will allow banks to increase leverage on their balance sheets. I've been following this chart since last October; the magenta line represents the Nasdaq index, the gold line represents Bitcoin's price, and the white line represents US tech ETFs. Most people now believe Bitcoin's price is close to the Nasdaq, and their performance has indeed been highly correlated over the past few years. But if you look closely at the tech stocks that have been hit hard, you'll find they are almost all SaaS companies, producing products that AI can now complete for just $10 a month, whereas they previously charged exorbitant prices. These stocks have been severely impacted. I believe this foreshadows a credit crunch that central banks haven't realized, and they haven't printed enough money, affecting Bitcoin as well. But since the start of the war, Bitcoin has consistently outperformed other stocks, surpassing the Nasdaq and SaaS stocks. I think Bitcoin is now focused on wartime inflation. Now that the US and many other countries have explicitly acknowledged that they are in a state of war, that their defense spending is insufficient, and that they need to print more money to manufacture more bombs, what will happen next? Therefore, all arguments about the Federal Reserve shrinking its balance sheet are untenable, because politicians and the Treasury are continuously increasing the debt. The U.S. has already issued trillions of dollars in debt, and the government needs funds to maintain spending. The proportion of foreign investor purchases has not increased significantly, meaning new buyers are needed to absorb this debt, a role that is being filled by the U.S. commercial banking system. By deregulating, banks can expand their balance sheets, thereby creating more credit, which will have a profound impact on market liquidity.
Content source 
