Fed hikes rates, Banking Crisis: Silicon Valley Bank implodes, Google's Bard to Rival ChatGPT
Fed reversed roughly half of all QT in one week. The telephone, internet, and crypto
By Terrence Hooi
Chief Investment Strategist
This Substack Post does not take into account nor does it provide any tax, legal or
investment advice or opinion regarding the specific investment objectives or
financial situation of any person.
1.) FED Hiking Rates Causing Historical-Scale Bank Runs
Last week, the FED’s balance sheet experienced an increase of around $300 billion, primarily due to the implementation of emergency lending programs aimed at addressing the ongoing banking crisis. These fresh loans effectively reversed the central bank's balance sheet reduction from the previous three months.
The Fed claims to have "high rates" like SF has "low crime rates," but it's all fake news. The recent rate hike doesn't mean the Fed is fighting inflation, as they're already printing trillions of new money for banks, both domestic and foreign. They're hiking rates to trick people into thinking there haven't been multiple bank failures recently. In reality, they're faking the rates just like SF claimed to have low crime rates even as criminals robbed stores in broad daylight. The Fed's policies are causing bank insolvencies, but they're printing even more money to cover it up. This infinite money is directly connected to people's checking accounts, causing historical-scale bank runs.
If the Fed were honest about their actions, people would flee for the Bitcoin exit. FED hiking rates will cause more losses on bank balance sheets.
Currently, there are unrealized losses amounting to $620 billion, which is a significant increase from $8 billion observed a year ago. Janet Yellen has stated that the Federal Deposit Insurance Corporation (FDIC) will NOT guarantee all deposits, despite concerns raised regarding the potential risks associated with these unrealized losses.
2.) Why Crypto is Here To Stay
The telephone, internet, and crypto have a common thread - each technology has progressed in enhancing fraudulent activities.
The rise of cryptocurrency has raised concerns about the potential for fraudulent activities, including pump-and-dump schemes, and it is possible that many digital coins are being used for fraudulent purposes. However, the blockchain technology underlying cryptocurrency has the potential to bring significant positive impact to various industries, such as finance, healthcare, and supply chain management. With sensible regulation and oversight, blockchain technology could be transformative and comparable to the impact of the telephone and internet on society and the economy. It is important to address fraud and manipulation, but we must not overlook the potential benefits of blockchain technology.
Two examples
Helium has created a global Wi-Fi network used by Limebike and others to track devices around the world
Helium's network was crowd-created by individuals who purchased and deployed Helium hotspots to mine HNT, its native token
Customers must purchase HNT to use the network, which creates a two-sided market for HNT where miners buy hotspots to earn tokens and users buy HNT to use the network
The more demand there is for the network, the more demand there is for HNT, making it a valued commodity with a price determined by supply and demand
DIMO collects valuable auto data from data ports in cars, allowing car owners to mint tokens by capturing data from their own car
A two-sided market for DIMO tokens could develop where data-users buy and burn tokens minted by car owners with DIMO data collection devices
Crypto-based business models like Helium and DIMO leverage the power of the blockchain to create decentralized, self-sustaining networks that are difficult to replicate using traditional business models
While Tesla can build DIMO’s datasets, DIMO's token-incentivized model can achieve real-time access to this data making connectivity and data collection feasible. These models can create new markets and opportunities that would be difficult or impossible to achieve using traditional business models.
3.) Google launches Bard to rival ChatGPT
This week, Google launches Bard. Google seems to have finally realized the worth of a worthy opponent. They have now decided to expand access to Bard, their ChatGPT rival, to a select group of users in the US and UK.
The decision to open up access to Bard is part of Google's efforts to keep pace with the advancements made by its competitors in the language model space. In particular, OpenAI's GPT-3 model has been making waves for its ability to generate highly coherent and natural-sounding language responses.. Kudos to Google for stepping up their game and joining the race towards technological advancement.