{"id":11731,"date":"2020-08-11T04:30:38","date_gmt":"2020-08-11T04:30:38","guid":{"rendered":"http:\/\/emilynews.com\/blog\/?p=11731"},"modified":"2020-08-11T04:30:40","modified_gmt":"2020-08-11T04:30:40","slug":"news-commentary-1134-inflation-and-hedge-with-bitcoin","status":"publish","type":"post","link":"https:\/\/emilynews.com\/blog\/?p=11731","title":{"rendered":"News Commentary #1,134 \u2013 Inflation And Hedge With Bitcoin?"},"content":{"rendered":"

We do not stop bringing some useful articles from the global financial system here on EN, because we are sure that this applies to everyone and especially investors around the world, whether they are forex investors, real estate investors or hyip investors.<\/p>\n

Below is another interesting piece of material that might prompt you to think a little more about the current situation in the global economy.<\/p>\n

*PLEASE remember that none of this and other articles are financial advice.<\/em><\/p>\n

Here is the article:<\/p>\n

\n
\n

Federal Reserve’s Expected Inflation Ramp-Up Drives Institutional Investors to Hedge With Bitcoin<\/h3>\n<\/header>\n
\"Federal<\/div>\n
 <\/div>\n
The U.S. Federal Reserve is expected to ramp up inflation by keeping interest rates low. <\/strong>As the U.S. dollar falls sharply and gold\u2019s price soars, i<\/strong>nstitutional investors are moving their money into alternative investments, including bitcoin.<\/strong><\/div>\n

 <\/h3>\n

Fed Policies Drive Demand for Bitcoin<\/h3>\n

The Federal Reserve is completing a year-long policy review and \u201cis expected to make a major commitment to ramping up inflation soon,\u201d CNBC reported last week. Investors have been making heavy bets accordingly as evidenced by record-high gold prices, the falling U.S. dollar, and increased demand for Treasury Inflation-Protected Securities (TIPS).<\/p>\n

The Fed is expected not to raise interest rates until inflation and unemployment targets are hit. Supporting the Fed\u2019s policies, President of the Federal Reserve Bank of Chicago Charles L. Evans said he would like to keep rates where they are until inflation gets up around 2.5%, the publication conveyed. However, it could take years for the Fed to hit its targets since inflation is currently closer to 1% and the unemployment rate is higher than it has been since the Great Depression.<\/p>\n

\u201cWe believe that the Fed publicly would welcome inflation in a range of 2% up to 4% as a long-overdue offset to inflation running below 2% for so long in the past,\u201d explained Ed Yardeni, head of Yardeni Research. He calls this approach \u201cwildly bullish\u201d for alternative asset classes.<\/p>\n

Some institutional investors are shifting their strategies to reflect the new environment. Citing Federal Reserve Chairman Jerome Powell saying \u201cwe\u2019re not thinking about raising interest rates and we\u2019re not even thinking about thinking about raising interest rates,\u201d the CEO of Nasdaq-listed Microstrategy Inc. (ticker symbol MSTR), Michael Saylor, said during the company\u2019s Q2 2020 earnings call:<\/p>\n

If you have large dollar values and you\u2019re hoping for any kind of return on them, that\u2019s faded. Gold, silver, and bitcoin are showing strength.<\/p><\/blockquote>\n

\"\"<\/p>\n

\u201cThe dollar, the DXY index is weakening. Faith in fiat currency across the market is fading and we\u2019ve seen that in rallies in most asset classes during Q2,\u201d he noted. \u201cAccordingly, it wouldn\u2019t be prudent to continue to hold a large portion of USD as our treasury strategy, and that\u2019s prompted us to rethink this.\u201d<\/p>\n

Microstrategy CFO Phong Le told investors:<\/p>\n

We will seek to invest up to another $250 million over the next 12 months in one or more alternative investments or assets which may include stocks, bonds, commodities such as gold, digital assets such as bitcoin, or other asset types.<\/p><\/blockquote>\n

\u201cPublicly traded companies are starting to diversify their cash holdings into bitcoin,\u201d commented Marty Bent, Editor in Chief of Marty\u2019s Bent, a daily newsletter about Bitcoin. \u201cBoardrooms across the country will begin to ask, \u2018Should we be diversifying into bitcoin too?\u2019 Hyperbitcoinization can happen faster than you can imagine. Be prepared.\u201d<\/p>\n

Meanwhile, some experts doubt the effectiveness of the Fed\u2019s policies. Peter Boockvar, chief investment officer at Bleakley Advisory Group, remarked:<\/p>\n

Just manipulating interest rates doesn\u2019t mean you get to some finger-in-the-air inflation rate that you choose.<\/p><\/blockquote>\n

Regarding the Fed\u2019s plan to crank up inflation amid record-high unemployment while the economic recovery is in jeopardy, he was quoted as saying: \u201cIt doesn\u2019t make any economic sense whatsoever. The consumer is very fragile right now. The last thing we should be shooting for is a higher cost of living.\u201d<\/p><\/blockquote>\n