Latest / The Paul Barron Crypto Show / Fed Rate Cut Countdown📉Crypto Market Update
Transcript
- 0:00Speaker 1: Today, let's break down the FOMC countdown because this week
- 0:03Speaker 1: could be huge for the markets, and of course it
- 0:06Speaker 1: all centers around one thing, that's Iran. We'll break it
- 0:08Speaker 1: down for you guys. Before we get started, I want
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- 0:33Speaker 1: Let's go into it today. There's a lot happening. Of course,
- 0:37Speaker 1: it is now FOMC week and you've got Kevin Warsh
- 0:41Speaker 1: at the helm. Now this is going to be different
- 0:43Speaker 1: because as Mohammad was talking about this earlier, he said,
- 0:48Speaker 1: being in that meeting is going to be interesting because
- 0:51Speaker 1: you've got a pass chair, you've got what could be
- 0:54Speaker 1: dissenting governors, and you have a new guy coming in
- 0:59Speaker 1: that people would say is the mouthpiece for Trump. So
- 1:04Speaker 1: the real question is is how does he play the
- 1:06Speaker 1: market If you just look at where some people think
- 1:08Speaker 1: this will go. Consider this of how and what the
- 1:12Speaker 1: market has done post these FED chairs. So when Jerome
- 1:16Speaker 1: Powell became the new FED chair in twenty eighteen, the
- 1:19Speaker 1: spy crashed five or almost four. Kevin Wars the new
- 1:23Speaker 1: FED chair on May fifteenth. Now, and the real question
- 1:27Speaker 1: is does history repeat itself? Do we see an average
- 1:32Speaker 1: MAX draw down under the new FED chair? I don't know.
- 1:35Speaker 1: I'm interested because there are so many factors playing into
- 1:38Speaker 1: not only this week, but just in general, of how
- 1:41Speaker 1: the market is responding to the Iranian deal, what's happening
- 1:45Speaker 1: with the S and P five hundred, obviously with SpaceX IPO,
- 1:48Speaker 1: what's going on in the risk markets, and you have
- 1:52Speaker 1: of course inflation and fuel prices all centered around this.
- 1:56Speaker 1: So data is going to be a big, big factor
- 2:00Speaker 1: going into his decision. Markets bet the Fed will hike,
- 2:04Speaker 1: and of course this is looking at over time when
- 2:07Speaker 1: you consider this though on the near term, right now
- 2:10Speaker 1: it is pretty much a flat line and whether or
- 2:13Speaker 1: not we're going to even get any hikes right now,
- 2:16Speaker 1: currently zero basis points is the winner on polymarket does
- 2:21Speaker 1: not look like we're going to see that. And if
- 2:22Speaker 1: you look at the rate hike probability right now, going
- 2:26Speaker 1: all the way into December. That is also falling now
- 2:29Speaker 1: down below forty percent, holding it thirty six right now,
- 2:33Speaker 1: down from a considerable high too. That was at sixty
- 2:35Speaker 1: one percent on June seventh, So just what ten days
- 2:40Speaker 1: ago we were at that kind of scenario. This is
- 2:42Speaker 1: all of course starting to lay into the market. Bitcoin
- 2:46Speaker 1: trading around sixty sixty sixty seven. We've got SpaceX absolutely
- 2:50Speaker 1: just going berserk like a rocket literally on the charts,
- 2:56Speaker 1: and you've got this coming in which is going to
- 2:59Speaker 1: be the FOE meeting. And remember since September, we've had
- 3:03Speaker 1: six FMC decisions. After every single one of them, bitcoined
- 3:07Speaker 1: up ten percent within days. Doesn't mean it held it there,
- 3:10Speaker 1: but those are the usually what we have seen in
- 3:13Speaker 1: terms of reaction in the market. Bitcoin moves. You know
- 3:16Speaker 1: what happens to do all coins. I want to go
- 3:18Speaker 1: to a clip real quick, and this will get into
- 3:21Speaker 1: what to watch for. This is Andre Sick breaking it down.
- 3:25Speaker 2: First, pay attention to Kevin Worsh's language around inflation. If
- 3:30Speaker 2: he says the word transitory or anything like it, that
- 3:34Speaker 2: means he's suggesting that inflation from the Iran war is
- 3:38Speaker 2: temporary and it'll go away on its own, And that
- 3:42Speaker 2: would be what's called a dovish signal. Right, the markets
- 3:45Speaker 2: will like that and they'll most likely go up. If
- 3:48Speaker 2: he sounds concerned about inflation being persistent, then that's hawkish.
- 3:54Speaker 2: Markets will not like that. They will most likely go down.
- 3:57Speaker 2: Second thing to look out for is watch whether he
- 4:01Speaker 2: mentions the bond market specifically, if he says stress in
- 4:06Speaker 2: the treasury market or hints that the Fed has tools
- 4:09Speaker 2: to support the bond market, that's him signaling to us
- 4:13Speaker 2: that the money printer is warming up. A QE will
- 4:17Speaker 2: happen if it needs to happen. If he says that
- 4:20Speaker 2: or some version of that, then gold and bitcoin will
- 4:23Speaker 2: go up almost right away.
- 4:26Speaker 1: So when you listen to Andre there and he is right,
- 4:28Speaker 1: I mean, what he's dealing with here is kind of
- 4:32Speaker 1: a rock in a hard place. And to this point
- 4:34Speaker 1: right here, global bond yields are crashing. You've got the
- 4:37Speaker 1: US ten year dropping four six a to four four two.
- 4:40Speaker 1: This is the last thirty days. That's that is a
- 4:43Speaker 1: large drop for a bond move, and then the twenty
- 4:45Speaker 1: year also falling from five point two down to four
- 4:48Speaker 1: point nine, so Japan is even moving harder. So remember
- 4:51Speaker 1: the Japanese ten yere is yield is down eight point
- 4:55Speaker 1: nine percent in twenty seven days. The twenty year has
- 4:58Speaker 1: dropped nine point five percent. So these are all very
- 5:01Speaker 1: significant because he is right. When bond yields fall, it
- 5:05Speaker 1: means bond prices are raising, which is money is flowing
- 5:08Speaker 1: into bonds across both US and the Japanese market. At
- 5:11Speaker 1: the same time, if you look at lower long term yields,
- 5:15Speaker 1: it's going to reduce borrowing costs for governments. And the
- 5:18Speaker 1: real question is where is interest rates going to fall.
- 5:22Speaker 1: In this next clip, Jick looks at Walsh's master plan
- 5:27Speaker 1: because there's a lot playing into this right now, and
- 5:30Speaker 1: back to his point. If it's transitory, yes, part time,
- 5:33Speaker 1: no worry about inflation. If it's something they think is
- 5:36Speaker 1: going to be sticking around longer, that is more damage
- 5:39Speaker 1: to the market for sure, especially because what we have
- 5:42Speaker 1: seen in the S and P five hundred, which is
- 5:43Speaker 1: no slowdown in terms of overall market value. Take a
- 5:47Speaker 1: look at Andre's next clip.
- 5:49Speaker 2: Specifically, the plan is to remove the capital requirements that
- 5:53Speaker 2: limit how many treasury bonds banks are allowed to hold now.
- 5:57Speaker 2: When COVID hit in twenty twenty, for example, FED temporarily
- 6:02Speaker 2: exempted treasuries from the SLR calculation for about a year,
- 6:06Speaker 2: and then exactly what lu Groman predicted happened. Banks instantly
- 6:11Speaker 2: piled their money into treasuries and the bond markets started
- 6:14Speaker 2: to function very smoothly. But then when the exemption ended
- 6:19Speaker 2: and expired in March twenty twenty one, banks had to
- 6:22Speaker 2: lower their treasury holdings and the bond markets did not
- 6:25Speaker 2: like that. So Kevin Worsh's plan is essentially to make
- 6:29Speaker 2: that COVID exemption permanent. And that's because there's really only
- 6:32Speaker 2: two paths forward. Path one, he signals that looser policy
- 6:37Speaker 2: is coming. Maybe he says the FED will step in
- 6:40Speaker 2: to support the bond market if things get worse. If
- 6:44Speaker 2: he says that, the markets will read that as liquidity
- 6:47Speaker 2: incoming aka money printer will be turned on. And historically
- 6:51Speaker 2: when that happens, gold goes up, stocks go up, bitcoin
- 6:55Speaker 2: goes up. Risk assets in general all go up, but
- 6:59Speaker 2: only if the Iran situation resolves soon, because without that,
- 7:05Speaker 2: all we have is higher and higher gas prices aka
- 7:09Speaker 2: higher inflation. And that makes it really hard for him
- 7:11Speaker 2: to say he's going to lower rates.
- 7:13Speaker 1: Yeah, And I think to his point is that Walsh
- 7:16Speaker 1: is walking a very razor thin line here, mainly because
- 7:20Speaker 1: the data that typically the FED is dealing with usually
- 7:25Speaker 1: comes in prior. To remember, FOMC is happening tomorrow on Wednesday,
- 7:29Speaker 1: but yet on Friday, we look like we're getting an
- 7:32Speaker 1: Iranian deal and you have a lot of people in
- 7:36Speaker 1: the mix right now. And the reason this is important.
- 7:38Speaker 1: Does Trump feed wash a little bit of data about
- 7:41Speaker 1: what this Iranian deal is going to look like that
- 7:43Speaker 1: would give him a little bit of a precursor to
- 7:45Speaker 1: making a decision here at this meeting that's happening literally today,
- 7:50Speaker 1: or does he have to pause and hold that line
- 7:54Speaker 1: until there's a little bit more public positioning here from
- 7:58Speaker 1: the White House. And of course, as he said, as
- 8:01Speaker 1: Andre said, it does depend on Iran. This is probably
- 8:05Speaker 1: the biggest deal I think, maybe in the history of
- 8:08Speaker 1: the United States because it has so much bearing in
- 8:11Speaker 1: terms of the US economy because it's so tied to energy.
- 8:15Speaker 1: I want to go to this clip because this is
- 8:17Speaker 1: a former Trump advisor saying, maybe this deal may not
- 8:20Speaker 1: be so good. Take a look.
- 8:22Speaker 3: I agree with that. So if it was good news,
- 8:25Speaker 3: it would have been leaked, we'd all know about it.
- 8:27Speaker 3: Donald Trump would stay around to sign and pass out pens.
- 8:31Speaker 3: The fact that he is getting out of town does
- 8:33Speaker 3: not bode well. Anyone with any shred of political sense
- 8:37Speaker 3: knows that, you know, politicians and cameras go hand in globe, right,
- 8:42Speaker 3: So if this was something good and going to be
- 8:44Speaker 3: you know, of global significance, donald Trump would be there.
- 8:48Speaker 3: I think that this is going to be viewed very skeptically.
- 8:51Speaker 3: I do not trust the Iranians.
- 8:54Speaker 1: All right, So this is a this is a former
- 8:56Speaker 1: White House advisor, and and whether you believe him or not,
- 9:00Speaker 1: I think the body language is kind of the thing
- 9:03Speaker 1: he's getting at is how do these people react me
- 9:06Speaker 1: in DC? And if we were getting a closer deal
- 9:10Speaker 1: to what's going on in Iran. I think he's right.
- 9:13Speaker 1: I think you'd have victory laps going around DC right now.
- 9:17Speaker 1: This concerns me a little bit. Does that mean that
- 9:19Speaker 1: maybe the deal is continuing negotiation? And they kind of
- 9:22Speaker 1: give you a fluff answer on Friday? Remember all this
- 9:26Speaker 1: stuff always happens on Friday. We talk about it all
- 9:28Speaker 1: the time. It helps avoid these situations where we get
- 9:32Speaker 1: so much coverage on it, it kind of buries the lead,
- 9:35Speaker 1: as they say, And I want to go further into
- 9:38Speaker 1: this because the question will be if it doesn't happen
- 9:40Speaker 1: on Friday, how long down the pipe are we going
- 9:44Speaker 1: to have to wait for normality.
- 9:46Speaker 4: Take a look, it was extremely challenging to get to
- 9:49Speaker 4: this ceasefire. Maintaining it is going to be even more challenging.
- 9:54Speaker 4: Let's say the ceasefire it works as planned on Friday,
- 10:00Speaker 4: it would be probably by the end of the year
- 10:02Speaker 4: you could even begin to talk about.
- 10:04Speaker 1: A resumption to normality.
- 10:06Speaker 4: And the idea though, is you'd have that flush of
- 10:09Speaker 4: the sixty million barrels that are caught inside come out,
- 10:12Speaker 4: maybe sixty plus million barrels. And if you're drawing on
- 10:15Speaker 4: average six million barrels per day right now, that means
- 10:18Speaker 4: you would cover six days or ten days of inventory draws.
- 10:22Speaker 4: After that, you still have the other problem. So before
- 10:25Speaker 4: we can answer anything, you got to answer how do
- 10:27Speaker 4: you get the ships to want to go back into
- 10:29Speaker 4: the golf. We have not answered that problem yet, So
- 10:32Speaker 4: again I say it's a near term solution as you
- 10:34Speaker 4: flush it, but longer term you don't have a problem.
- 10:37Speaker 4: The markets are treating this very differently than the way
- 10:40Speaker 4: the physical markets are or the operators are treating it.
- 10:43Speaker 4: The financial markets are saying this is a done deal.
- 10:48Speaker 1: All right, So do you guys think that is the case?
- 10:50Speaker 1: Is it a done deal? If you look at the
- 10:52Speaker 1: current markets of what's going on, you kind of say, well,
- 10:57Speaker 1: maybe all of this is being masked by the spacexpo.
- 11:00Speaker 1: If you look at where we are right now, three
- 11:02Speaker 1: hundred bill out of the US stock market today, that
- 11:05Speaker 1: of course is moving what might be into SpaceX. And
- 11:09Speaker 1: I think this is continuing to be an issue right there.
- 11:12Speaker 1: If you look at SpaceX up another ten percent today,
- 11:15Speaker 1: overtaking Amazon to become the fifth largest company in the world. Guys,
- 11:20Speaker 1: this is insane to see these kind of numbers. And
- 11:23Speaker 1: the real question is how long does it hold. This
- 11:25Speaker 1: will correlate to the crypto market because if you look
- 11:28Speaker 1: at what's happening after hours on the weekends right now,
- 11:31Speaker 1: hype of course source to all time high. This again
- 11:34Speaker 1: because of what's happening over on SpaceX side and what
- 11:36Speaker 1: we'll see on the Purp side. But if you look here,
- 11:39Speaker 1: the driver on this seems to be SpaceX. NASAC closed
- 11:43Speaker 1: the after hours price discovery for the year's biggest IPO
- 11:45Speaker 1: has now been running on hyper liquid, So you've got
- 11:48Speaker 1: that PERP going on one point one billion in volume,
- 11:51Speaker 1: and that climbed about twenty three percent. So the new
- 11:54Speaker 1: contract on the third biggest market out there in terms
- 11:58Speaker 1: of the entire platform, only Bitcoin and Eat. So big deal, guys.
- 12:03Speaker 1: If it continues to trade like this, if you continue
- 12:06Speaker 1: to see this kind of flexibility and volatility, and there
- 12:09Speaker 1: could be people starting to short this and getting into
- 12:12Speaker 1: that trade as well. Right there. SpaceX of course leapfrogging
- 12:17Speaker 1: over Microsoft holding the number four position right now. Well,
- 12:21Speaker 1: I couldn't say just behind Apple. There's still about half
- 12:23Speaker 1: behind Apple. But remember this opened this week and it
- 12:28Speaker 1: was at less than two trillions, so it's almost gained
- 12:31Speaker 1: a trillion dollars in a week. If it tracks at
- 12:35Speaker 1: this level, it literally is on Apple's heels inside a month.
- 12:39Speaker 1: So let's see if this continues to hold into SpaceX.
- 12:44Speaker 1: The US Department of Justice just did something that might
- 12:47Speaker 1: actually help it, and they declared Elon Musk's data centers
- 12:51Speaker 1: national security asset and blocked an environmental lawsuit against it.
- 12:55Speaker 1: This basically green lights about everything Elon wants to do
- 12:59Speaker 1: when it comes to data centers, and imagine what this
- 13:02Speaker 1: is going to look like as he starts to move
- 13:05Speaker 1: into data centers through SpaceX in other words, in space
- 13:09Speaker 1: do we get regulatory alignment around that or is this
- 13:12Speaker 1: now protecting SpaceX from literally any kind of issues coming
- 13:18Speaker 1: out of DC in terms of investigations, compliancy, anything like that.
- 13:23Speaker 1: If this opens up the pipeline here, we could see
- 13:25Speaker 1: an unlimited supply of availability for Elon moving forward. This
- 13:30Speaker 1: is another look right here in this if you kind
- 13:33Speaker 1: of compare this to previous IPOs. These are the five
- 13:35Speaker 1: most hyped IPOs over the last fifteen years. Every single
- 13:39Speaker 1: one of them collapsed after listening. Now the question is
- 13:43Speaker 1: how long did it take. Sure many of them were weeks,
- 13:46Speaker 1: sometimes months, but Uber lost seventy percent of its IPO price,
- 13:50Speaker 1: Meta was down seventy seven percent from its peak, Robinhood
- 13:53Speaker 1: fell ninety two percent, Coinbase was ninety three and even
- 13:56Speaker 1: Rivian fell ninety five percent. It's always priced on these
- 14:01Speaker 1: early trading frequencies. And remember this is a little bit
- 14:04Speaker 1: different because SpaceX has so much private equity and private
- 14:08Speaker 1: capital that's gone into this, which will take profits. They
- 14:11Speaker 1: will get out and exit. Liquidity I think is retail
- 14:16Speaker 1: at the bottom is when nobody wanted these stocks, and
- 14:19Speaker 1: that is when everybody started to make money on these things.
- 14:22Speaker 1: Robin Hood was up twenty two x from its low,
- 14:24Speaker 1: Meta was up forty five, Uber was seven. That's when
- 14:28Speaker 1: those millionaires were made that were retail millionaires. Because now
- 14:32Speaker 1: all that liquidity has been flushed out of the market
- 14:34Speaker 1: and it's an opportunity to buy it. So if you
- 14:36Speaker 1: are looking on the backside of that, let me know
- 14:39Speaker 1: what your price is for SpaceX. If you're thinking, I'm
- 14:42Speaker 1: going to get into SpaceX, but I'm going to wait
- 14:44Speaker 1: for all of this to settle down, just put your
- 14:47Speaker 1: price down in the comments. I shares is getting ready
- 14:50Speaker 1: to or I should say I shares Bitcoin Premium Income ETF,
- 14:54Speaker 1: which is BITTA is now launching tomorrow. Now this is
- 14:58Speaker 1: interesting because this begin to put a little pressure on
- 15:03Speaker 1: the darling of these kinds of assets, and that has
- 15:06Speaker 1: been stretch under micro strategy. This, of course setting in
- 15:10Speaker 1: under Blackrock. The question will be is which one would
- 15:13Speaker 1: you buy if you were trying to go into these
- 15:16Speaker 1: preferred products out there, would you go into something like
- 15:20Speaker 1: Blackrocks offering or would you continue down the pipe of
- 15:23Speaker 1: going with strategies offering with stretch or would you jump
- 15:27Speaker 1: over to bitmind and what they're doing. Let me know
- 15:29Speaker 1: what you guys think. I think this will outpace stretch.
- 15:32Speaker 1: It may cause a little bit of a struggle for
- 15:35Speaker 1: stretch here in the future. I want to go to
- 15:38Speaker 1: this last clip because this is an interesting I won't
- 15:41Speaker 1: call it a debate, but it is a different perspective
- 15:44Speaker 1: of how markets will react and where bitcoin and crypto
- 15:49Speaker 1: will be, as well as where will gold be. This,
- 15:51Speaker 1: of course is Peter Schiff and Anthony Anthony Papiano. Take
- 15:54Speaker 1: a look.
- 15:56Speaker 5: The government is backing bitcoin. The government is behind bitcoin.
- 15:59Speaker 5: The government is trying to misdirect resources into bitcoin. The
- 16:02Speaker 5: president's family, that's the family business. Now forget real estate,
- 16:06Speaker 5: they're all in crypto.
- 16:07Speaker 6: Well on a second here, the US government has been
- 16:10Speaker 6: back in gold for decades and decades. I don't hear
- 16:13Speaker 6: you complaining about that.
- 16:14Speaker 5: Second of all, the United States money in the United States.
- 16:16Speaker 6: Second of all is that the United States has frozen
- 16:19Speaker 6: Venezuelan's gold. They frozen Russia's gold. They've gone after China's.
- 16:23Speaker 2: Gold only if they have possession of it and again.
- 16:26Speaker 6: But you can't do that with an asset that cannot
- 16:29Speaker 6: be sense.
- 16:30Speaker 1: What do you mean?
- 16:30Speaker 5: Look at all the bitcoin we've seized. How do you
- 16:32Speaker 5: think we have a bitcoin strategic reserve? It's all this
- 16:34Speaker 5: seized bitcoin. There was just some rumors I don't know
- 16:37Speaker 5: that we seized Iran's bitcoin or crow whatever they ad.
- 16:40Speaker 5: It's a lot harder to seize gold because if you
- 16:43Speaker 5: have your own gold in a vault, unless you're going
- 16:45Speaker 5: to send the military on the ground to get it,
- 16:48Speaker 5: gold is far.
- 16:49Speaker 6: Let me ask you this, over the next decade, do
- 16:51Speaker 6: you think that bitcoin or gold is going to outperform
- 16:53Speaker 6: each other? If you had to pick between gold and bitcoin,
- 16:56Speaker 6: which one do you think?
- 16:56Speaker 5: I don't even know if bitcoin is going to be
- 16:57Speaker 5: around another decade, you want to make a bet on it?
- 17:00Speaker 6: But what bitcoin's going to be around in a decade?
- 17:02Speaker 1: A book? Also, I got great, goet, I got that's
- 17:08Speaker 1: easy bet. If you think it's gonna go away, make
- 17:09Speaker 1: a little bet. Well, I can't. It's go to zero
- 17:11Speaker 1: maybe zero, Let's I don't know. I think I've heard
- 17:18Speaker 1: shifts say that bitcoin goes to zero before interesting. Maybe
- 17:22Speaker 1: he's re you know, considering his position interesting though dynamics,
- 17:27Speaker 1: because I think right now you are dealing with a
- 17:29Speaker 1: new asset generation. And remember it is a different kind
- 17:33Speaker 1: of investor these days. They are looking at not only
- 17:36Speaker 1: treasuries differently, they're looking at risk markets differently, and they're
- 17:39Speaker 1: definitely looking at precious metals differently. So if you're one
- 17:43Speaker 1: of those, which one of you guys jumping into love
- 17:45Speaker 1: to hear your thoughts. If you like this video, like
- 17:54Speaker 1: and subscribe, drop a comment down below, and also join
- 17:58Speaker 1: our free private member group is in the description