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Hi Everyone,
When I was a child, my family was fortunate enough to have a live-in maid five days a week.
I remember her talking about where she came from one time and even pointing it out on the globe, a part of that small strip of land between North and South America, and telling me how she had to leave El Salvador because of the corrupt government.
Half a lifetime later, it seems we've come full circle. Now, the government of El Salvador is vying to attract forward-thinking citizens and businesses, while the U.S. seems to be making moves to hamper the freedom of their citizens.
In a video released last night, Sen. Elizabeth Warren ripped into bitcoin and cryptocurrencies, describing the situation as an "environmental disaster" and stating her intention to regulate these digital assets more stringently.
The thing is that to the best of my knowledge, the U.S. government has never regulated any industry based solely on the amount of energy it uses.
Certainly the data farms of Google, Facebook, Amazon, and the like are extremely energy intensive, but you don't hear anybody calling for them to curb those emissions.
The esports industry, big banks, and even Christmas lights all use inordinate amounts of energy, so why single out Bitcoin?
The only reasonable answer comes late in the video where Warren asks her "experts" if it's possible to create a digital version of the U.S. dollar (a central bank digital currency) that would be less energy intensive. Huh?!
The blatant hypocrisy in this statement is palpable. To place all digital assets in a single energy-wasting basket with Bitcoin, but make a preemptive exception for a potential digital version of the U.S. dollar, doesn't make any sense and is revealing of the ulterior motives.
The fact is that a country's usage of energy is reflective of economic growth.
In our opinion, the problem here isn't the intense usage of energy, it's the methods used to produce it.
If politicians were really interested in tackling the root issue, they'd revitalize moves toward clean energy rather than limiting the ways that people use the energy that's already available. |
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Another inflation spike
Well, so much for the theory that we're about to enter a deflationary period.
Today's data released by the Bureau of Labor Statistics revealed some of the highest inflation statistics in decades. |
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It's not just the U.S. either. Earlier today, European Central Bank President Christine Lagarde also mentioned that inflation is likely to pick up as the economy gets back on track.
Although their forecast has been revised upward, they are still expecting inflation under 2%, and they are not considering reducing the copious amounts of stimulus they are currently providing.
Remarkably, the U.S. figures did not seem to concern the markets at all. Stocks continued to climb into all-time high territory and bonds continued to catch their bids.
Apparently, now that the data is out, investors are happy to pretend that the Federal Reserve will not react to these figures.
After all, the Fed has been saying that they expect inflation to rise, but also that they expect that increase to be "transitory" and return to normal once the economy does. So why should the market be concerned?
Of course this sort of data justification only works in retrospect.
Any reasonable economist would expect that a sharp rise in inflation would motivate the Fed to hike rates quicker than expected.
They would also want to sell stocks, but since nobody really wants to paper hand right now, they're happy to continue buying despite the writing on the wall.
Wishing you a pleasant afternoon/evening.
Best regards, |
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Mati Greenspan Analysis, Advisory, Money Management |
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