We are thankful for you
Remember, It’s “Transitory”
On Tuesday The White House announced that it will tap into the US Strategic Petroleum Reserve (SPR) and make 50 million barrels of oil available to help relieve rising oil prices.
In an unprecedented move, the US will coordinate the release with China, Japan, India, South Korea, and the UK who will also release reserves in an effort to lower oil prices.
The US stockpile currently contains 606 million barrels of petroleum — enough reserves to last the US one month. It’s strictly reserved for emergency situations, and many have criticized the order saying that the reserves should only be tapped for true supply disruptions, not for attempts to control prices.
The market didn’t respond as hoped, with oil prices rising to a one-week high after the announcement.
Officials from OPEC+ also warned that they’re likely to retaliate by cancelling their plans to boost their own production, to counterbalance any dilution of the supply that occurred with this release.
There is talk about returning the oil to the reserves “once prices have eased”, perpetuating the current narrative that inflation across the board is “transitory” and that the prices will indeed “ease”.
Many have wondered about the end game of this move. A one-time flooding of the market might bump prices down temporarily, but as long as the US Federal Reserve continues to print obscene amounts of money, prices across the board are only going to continue to go up. Continuing to release reserves in a vain attempt to control prices isn’t sustainable.
This isn’t the only mention of rising prices from government officials this week.
Elizabeth Warren tweeted that rising costs of Thanksgiving dinner was due to “greedy corporations”. A huge number of people immediately responded by mentioning the giant money-printing elephant in the room.
While Paul Graham’s rebuttable eloquently called a spade a spade, Gene Epstein’s response included a graph, which is always helpful in calling out falsehoods.
Coupled with this M1 money chart, we’ll leave the reader to ponder what might be the cause of rising prices this Thanksgiving.
Let the Money-Printing Continue!
President Biden announced on Monday his nomination of Jerome Powell for a second term as Chair of the Board of Governors of the Federal Reserve System. Given the Fed’s plan to continue printing money, there is indeed no one else who can match Powell’s experience when it comes to money printing.
Citing Powell’s handling of the nation’s balance sheets, President Biden stated his support saying:
“That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery”.
There was initial hubbub leading up to the announcement that Fed Governor Dr. Lael Brainard would replace Powell, however she was relegated to a Vice Chair nomination.
“I don’t think the Fed’s policies toward crypto would be that much different under Brainard than they would be under Powell,” said managing director of Capital Alpha Partners Ian Katza. “Both are mainstream Fed institutionalists who would want a strong role for regulators in overseeing crypto and making sure it doesn’t cause financial-stability risks”.
President Biden also stated, “Together, they also share my deep belief that urgent action is needed to address the economic risks posed by climate change, and stay ahead of emerging risks in our financial system.”
If you’re wondering why “climate change” is part of the purview of the Federal Reserve, given that Fed bureaucrats are not climate scientists, you may not be alone.
Bitcoin City! Backed by the full faith of the El Salvadorian Govt
President Nayib Bukele of El Salvador has announced his intentions to build what he is calling “Bitcoin City”. In rock-star fashion, he addressed a crowd of excited crypto enthusiasts at the #FeeltheBit event in El Salvador last Saturday night. The city will have no income tax, property tax, capital gains taxes, or payroll taxes. It will have residential and commercial areas with restaurants, an airport, rail service, and a port, all located near the Conchagua volcano, in order to use the geothermal energy to power the city and bitcoin mining.
How the El Salvadorian government plans to pay for the city is another matter.
Bukele plans to issue a $1 Billion “bitcoin bond” that will be developed by Blockstream — half of it will be used to create the necessary infrastructure and the other half will be invested in bitcoin.
Blockstream’s chief strategy officer, Samson Mow stated that, “$1 billion in tokenized bonds will be 10-year and U.S.-dollar denominated and pay 6.5% initially. Following a lock-up period of five years, El Salvador will start to sell its cryptocurrency holdings and pay an added dividend to bond holders”.
Blockstream estimates that by the time 10 years have elapsed, APY will be 146%, based on Blockstream’s price prediction of $1 million within the next 5 years for BTC.
That’s quite a price prediction. Given the solvency of the bonds relies on this price increase of bitcoin, some have asked why they wouldn’t just buy bitcoin directly, instead of a bond backed by the faith of the El Salvadorian government.
Meanwhile, the International Monetary Fund (IMF) is flexing its muscles again, and published a statement saying that Bitcoin should not be used as legal tender at all in El Salvador. Someone needs to tell the IMF that bitcoin is the captain now.
Big questions about Bitcoin City’s funding aside, a tax-free city built on volcano energy that mines and accepts bitcoin does sound pretty cool.
Happy Thanksgiving
For those based in the USA, we wish you a happy Thanksgiving, and for those based elsewhere, giving thanks for the things we’re grateful for is never a bad idea!
So we’d like to thank all of you for reading our weekly CryptoBeat newsletter, everyone who has supported us to 100k subscribers on the NBTV YouTube channel, and everyone who supports us on our alternative video platforms like Odysee also. We appreciate you 🙏.
We would also like to thank the builders in our community, especially those who are building privacy tools — you are helping us carve out much needed private space in our digital lives.
And finally, we are thankful for Satoshi Nakamoto, for helping us begin the process of the separation of money and state, and igniting a revolution that is giving people back control over their money.
Our decentralized future is an exciting place, and we’re excited to be exploring it with all of you! 💛
By Will Sandoval, NBTV Associate Producer, and Naomi Brockwell.