Bitcoin BREAKS $85K As The Bear Market Case COLLAPSES

Scott Melker (0:01)

Bitcoin is back above $85,000, making a new higher high, and closing a week above the 50 moving average. For many technical analysts, these are the signs that the bear market case is dead. And all of this happening in context of a very bad week for news. Of course, the Clarity Act failing, and the Fed hiking rates. How is Bitcoin rising in the face of all this bad news, and is the new bull market upon us? We're going to discuss that today, and much more with Mike, Dave, and special guest, who basically is become a regular. Peter Cheer, let's go. Let's go.

Good morning, everybody. Happy Macro Monday, and welcome to the show. We're going to bring everybody on right now. We got Peter, Dave, and Mike. Mike, as usual, before we jump into Bitcoin, let's talk morning meeting. What did you guys discuss today?

Mike (1:09)

Good morning, yes.

We went over this morning, so that's part of the reason we're late. It was me. Anna Wong was kind of pretty strongly pointed out that she thinks the Federal Reserve might be acting a little too aggressively. She pointed out the FOMC has shifted immediately with urgency to get inflation back below 2 percent. The next statement says, never mind that CorePC is entering near a five-year low and declining.

Consumers not as strong as it was.

Basically, the Fed lowered their unemployment forecast from 4.3 percent to 4.1 percent despite hiking rates, which Anna thought was kind of odd. We've had 100 basis point rally and 10-year note yields, which she says is equivalent to basically hiking rates almost 200 basis points in Fed funds.

And she fully expects the rate market to materialize, the labor market to weaken into next year on the back of the hike. And she did point out that the hike did add a lot of decent credibility to the Fed. Ira Jersey agreed. He was quite bullish. It's rare for him to say that's on the long end. He thinks the long end of the curve will drop in trade well. The curve will continue to flatten. He thinks the market's price are 80 base points of hikes into next year is not going to happen, but he still thinks the long end is going to do well and the Fed, the curve flattening. And then he did add the Fed, the fact that the Fed increased rates, adds a decent amount of credibility. Not much new on stocks. Just about how we know earnings are off the charts. Audrey Chill Friedman pointed out, she's FX, pointed out this is probably decent for the dollar, at least for the while. Again, the, quote, credibility from the Fed, path of least resistance for the dollar's up. She expects the yen is more likely to head towards 160, and doesn't expect more rates, additional rate hikes from BLJ, who just hiked last week. And then me, I pointed out, we have the world's largest, the 40% of the economy, China and US meeting today. Both leaders have a vested interest in crude oil going lower. We've seen some pretty substantial peaks for good reasons, so I think that's going to be potentially maybe more solidify that $100 as a decent resistance. And also, I pointed out, if you look at that price of diesel per gallon, price of diesel overlaid with the 5 or 10, you know, it's basically the same. Right now, diesel is about $4.93. Last year, it's high as around $5.30, and the 10, you know, it's dropped on the $5.95 or so. And then I point out, the key thing is the credibility from the Fed. In London last week, one of the key themes I heard is a lot of people are just loving the concept of getting that 10% and that 5% in the 10, you know? And the Fed credibility is wonderful, but it also completely reverses all the things that really made me bullish things like gold last year. First of all, the Federal Reserve easing when bond yields are telling them to hike, and now we have the Fed hiking. And with, you know, 5% in the 10, that's a headwind for all metals, particularly gold, silver, platinum, copper, copper's a sock bucket. And then I lay low a little bit on Bitcoin. I forgot if Dave had a chance to beat on me on that one.

Scott Melker (4:13)

Before we get to Bitcoin, though, let's talk about the Fed because we haven't had the opportunity to talk about the hike. And Dave, you and I were very, very adamant, no chance that Warsh hikes. He did.

Dave (4:23)

Yeah, I mean, I think this is, this may be the most classic case of something I've been saying on this show for years. You know, the old, where all the real stuff's here. And I picked this background for a reason, right? You know, it's, hike the short rate to a level that doesn't really do a whole lot, but be ready to push liquidity out where the hell you need if something breaks.