They’re Going to Inflate the Debt Away and Send Bitcoin to $500K?! | Simply Originals

**SPEAKER_1** (0:00)
Well, the new Fed Chairman, Kevin Warsh, showed no mercy on Jackson Hole. It didn't take but a couple minutes into his speech for him to go absolute prison rules on markets. Bitcoin dumped, but nonetheless remained resilient. Actually, Bitcoin flashed a signal. It's only flashed one other time. And that time, Bitcoin went on to 8x. But this time is different. The Fed and Treasury appear to be at war. Trump just relaunched strikes on Iran and they've responded along with markets. Just wait until you see some of these inflation numbers and it doesn't stop there. Treasury Secretary Scott Bessent just said a disorderly sharp decline in the yen could set off forced unwinds of major trading positions. He warned that this could spread stress across global markets, not just Japan. Don't worry, Bessent says he expects the BOJ to do the right thing on policy despite yields being at 31-year highs. Just carry on, move along. What if what appears as chaos may be all by design? We have evidence.
There is much more to the story here. Rockets and robots are not going to save you from whatever the hell this is. It kind of looks and smells like hyperinflation. Maybe just like we were the carbon. We are now the death they seek to eliminate. Wait, uh, oh, hold on. So the Fed is talking hikes? The Treasury warns the global economy could blow up? The war relaunches? The Taliban declares war on Bitcoin? And we're at 77, 78k as of this morning. And Bitcoin just flashed a signal that led to an 8X last time. Do you know what this means? Did Bessent and Warsh just confirm the plan to milkshake the planet and inflate the dead away right as Bitcoin flashed a 500k signal? Well, you're about to find out.
Sign it!

**Kevin Warsh** (2:10)
The economic literature has long described the distorting effects, what it called the Hall of Mirrors problem. If markets rely materially on the Fed's guidance and the Fed relies on market prices, we're more likely to be blinded to new developments, more likely to be caught unprepared, and more likely to commit errors in policy making. Now, perversely, market participants are unlikely to bear the biggest costs of the Hall of Mirrors problem. The most serious harm is likely to befall those without any financial assets.
If the Fed gets inflation wrong and judges the economy wrong, who gets the worst of it?
Not the financial high flyers.
Hard working Americans are the ones left to deal with inflation that's too high, or jobs that suddenly appear less secure. I am not alone in noticing that forward guidance in 2021, to cite just one example, might well have slowed the policy response to high inflation. The Fed's preferred measure of inflation, the one I talked about earlier, the 12 month change in the PC price index stands at 3.7 percent, with the six month change a little above four. The comparable measures from the CPI index are also elevated, as our core measure is both the PC and CPI inflation. None of these measures are perfect, but they all tell a similar story. Inflation is running above our 2 percent target, so the Fed's predominant focus right now should be on prices. So here is my standard. We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That's our job, that's our mandate, and that's our charge to keep.

**SPEAKER_1** (4:14)
Well, bad news, Kevin, because inflation is too damn high. Just look at all those things above 2 percent. And of course, the things we need most to survive as a species and civilization, they're rising the fastest. Here's a little problem with those proposed rate hikes. You basically force a default. David Friedberg just talked about this on the All In Podcast. His theory and argument is this. There is no action that Bessent can take that's actually going to have a meaningful effect on the long end of the curve. And for every 1 percent change in the interest rate, the US government has to pay 1.25 percent GDP in excess interest each year.
1.25 percent of GDP in interest each year for that 1 percent change in the interest rate. Good luck raising rates, Kevin. Especially when Japan could be the reason the global markets break. Treasury Secretary Scott Bessent just sent a warning across global markets. A disorderly yen triggers forced unwinds. Forced unwinds destabilize global markets and destabilize global markets push US borrowing costs higher. The yen is already weakening back at 160 despite the joint U.S.-Japan intervention just last month. The intervention failed. Bessent knows what happens next. And he's telling you without telling you, Japan's problem is also America's problem. And you look at it from the to what end angle.