As Bitcoin hit USD 100,000 it gave us another of it's epic displays of volatility. The price hit USD104,000 before collapsing to USD 88,000 on huge volume before rallying to USD 96,000 at the close, a daily price range of USD 16,000.
It was a fitting display as it would be wrong to hit that milestone like any normal asset. No doubt those still on the sidelines will say it's too volatile to be a store of value but after 15 years of outperforming every single other asset surely it must be the best store of value that has ever existed.
Invented in 2009 in response to the GFC, and as a better monetary policy system (programmed supply and cap) it's also fitting that it hit USD 100,000 in a week that had South Korea declare martial law (only for a few hours) and the French Prime Minister lose a no confidence vote.
The rise of Bitcoin should be interpreted as the death of fiat.
Nowhere is this more apparent than is US M1 and M2 Money Supply. M1 and M2 are measurements of the United States money supply, known as the money aggregates. M1 includes money in circulation plus checkable deposits in banks. M2 includes M1 plus savings deposits (less than $100,000) and money market mutual funds.
US M1: Federal Reserve Bank of St Louis
In 4 years M1 has increased 5 times or put another way 80% of the US dollars in M1 has been created in the last 4 years.
US M2: Federal Reserve Bank of St Louis
M2 has increased by 4 Trillion dollars in 4 years
Whichever measure you look at it's shocking. No wonder Bitcoin is going to the moon.
Swedish Core Inflation Accelerates to Highest in Six Months [Bloomberg]
Biden says he is pardoning his son, Hunter [Reuters]
Explainer: After China's mineral export ban, how else could it respond to U.S. chip curbs? [Reuters]
EU PPI October 2024
Germany Factory Orders October 2024
EU Retail Sales October 2024
Germany Industrial Production October 2024
EU GDP Q3 2024
The pain continues in Europe as surely the ECB will be considering a 50bps or maybe 75 bps cut next week.
Bundesbank chief calls for softer debt brake to increase investment [FT]
ECB to Discuss Bigger Cut But Uncertainty High, Kazaks Says [Bloomberg]
France 'dangerously exposed' in case of economic shock, national audit office says [Reuters]
What Happens If French Government Falls After Budget Showdown [Bloomberg]
France’s Barnier Offers Final-Hour Budget Concession to Le Pen [Bloomberg]
The FED's beige book was released this week and it was hawkish. No signs of systemic weakness of it's previous release in October.
US Manufacturing ISMs November 2024
US JOLTS October 2024
US Non-Manufacturing ISMs November 2024
US Nonfarm Payroll November 2024
Overall the economic releases this week portray a still growing economy and if some households are hurting there are still plenty that are doing well. This is in sync with the housing markets which are deeply polarised. All is consistent with a huge amount of money printing driving a huge wealth gap.
Monetary Policy
FED chair Powell gave his final speech before blackout for the FOMC policy meeting on the 18th.
Hawkish Powell: "The economy is strong, and it's stronger than we thought it was going to be in September. The downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation is coming a little higher."
Almost every FED Governor was on the wires repeating Powell's hawkish message.
Are markets too optimistic ?
Fed’s Goolsbee Says US Labor Market Still Looks Stable [Bloomberg]
Fed’s Collins Says December Rate Cut Still on the Table [Bloomberg]
Fed's Daly: December rate cut is absolutely not off the table [Forex Live]
Lots of hawkish rhetoric from regulators but they don't dare hike rates (or cut).
BOJ Weighs Case for First Triple Hike Since Japan’s Bubble Burst [Bloomberg]
Japan Needs Wake-Up Call on Debt, Government Advisor Warns [Bloomberg]
Yen Carry Trade That Rattled Markets Shows Signs of a Comeback
The IMF estimates Chinese ''hidden'' local government debt sitting in financing vehicles amounts to 60 trillion RMB or 8 trillion USD. It's 47% of GDP.
China kicking the can down the road again.
Wall Street Banks Predict Biggest China Rate Cuts in a Decade [Bloomberg]
China’s 10-Year Yield Sinks to Record Low on Bets PBOC Will Ease [Yahoo! Finance]
XRP Daily
XRP is another beneficiary of the next US Government's policy of light regulation.
Bitcoin is a competitor for gold, not the U.S. dollar, Fed Chair Jerome Powell says [Yahoo! Tech]
Commercial Real Estate Bond Distress Reaches Record High [Zerohedge]
Canada Unemployment November 2024
After a few months of better news, Canada is now lurching towards recession again. More cuts will be on their way.
At least Statistics Canada aren't lying with the numbers, unlike in the US.
Canada Unemployment
The UK is doing better than Europe (thanks to Brexit) but a weak and ineffective government is letting the country down. And they just lied yet again to the population as they will be raising taxes further despite promising not to do so in the budget.
Every financial advisor in the UK is helping those with money leave the country.
Starmer Says Shocks Could Spur Tax Rises, Softening Reeves Line [Bloomberg]
BoE governor expects four UK rate cuts next year as inflation eases [FT]
UK Fiscal Stance Unsustainable Without More Tax Rises, OECD Says [Bloomberg]
UK Business Activity Set to Shrink in Wake of Budget, CBI Says [Bloomberg]
Australia Retail Sales October 2024
Australia GDP Q3 2024
Australia Trade Balance October 2024
The economy is now a problem. One and a half years of slowing GDP growth with the RBA and Feds dithering.
House values tumble in Sydney, Melbourne as economy struggles [Sydney Morning Herald]
Victoria’s debt levies haul in far more than expected [AFR]
ASIC moves to expand its oversight of crypto and digital assets [AFR]
Rural MP Bob Katter rages after bank’s latest attack on cash [News.com.au]
Australia is now an economic ‘problem child’: McKinsey [AFR]
US CPI will have every number scrutinised and beware an uptick unsettling overly bullish markets.
RBA won't cut (they should) as they are too busy fighting the federal government.
Bank of Canada will surely keep cutting.
ECB needs a big cut
It's nearly Xmas so expect thin markets with some profit taking. It's been a good year.