Former U.S. President and presidential candidate Donald Trump has engaged with leaders in the bitcoin mining sector, expressing his support for the industry. Trump stressed that bitcoin mining “may be our last line of defense” against a central bank digital currency (CBDC). He emphasized the importance of producing the remaining bitcoin in the U.S., suggesting […]
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BRICS Meeting Highlights Shift to Local Currencies
BRICS Ministers of Foreign Affairs have emphasized using local currencies in trade, reaffirming economic resilience and financial sovereignty. At their meeting on Monday, the Ministers underscored the importance of the enhanced use of local currencies in financial transactions between the BRICS countries. BRICS Ministers Push for Use of Local Currencies The BRICS Ministers of Foreign […]
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BRICS Meeting: Iran Pushes for Common Currency — China, Russia Prioritize Settlements in Local Currencies
The first BRICS sherpa meeting with 10 member states has kicked off in Russia with representatives from Brazil, Russia, India, China, South Africa, Saudi Arabia, the United Arab Emirates, Iran, Egypt, and Ethiopia. China, Russia, and Iran are all advocating for the use of national currencies in trade settlements. Iran’s sherpa also expressed hope that a common BRICS currency will soon be operational.
BRICS Meeting With 10 Member States
The first BRICS sherpa meeting for 2024 under the chairmanship of Russia commenced on Tuesday in Moscow, with participation from 10 member states for the first time. In addition to, Brazil, Russia, India, China, and South Africa, the economic bloc is joined by five new nations: Saudi Arabia, the United Arab Emirates, Iran, Egypt, and Ethiopia.
Iran’s sherpa and deputy foreign minister for economic diplomacy, Mehdi Safari, said at the meeting:
In the plans of 2024, I hope that these economic and financial pillars, especially banking and financial issues, payment systems, digital currency, common currency, exchanges with national currencies, etc., will speed up and become operational.
He also stressed the importance of strengthening the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA), noting: “I emphasize once again that we in Iran have plans, and will implement the necessary plans, for active and innovative participation in this year’s program.”
Last year, there were reports that the BRICS economic bloc was planning to create a common currency. However, at the group’s leaders summit in August last year in Johannesburg, South Africa, the BRICS nations pushed for the use of national currencies to reduce reliance on the U.S. dollar, instead of discussing a common currency.
Russia’s Deputy Foreign Minister Sergey Ryabkov said at the BRICS sherpa meeting on Tuesday: “In line with the decision of the BRICS leaders in Johannesburg, we will explore ways to make greater use of national and local currencies and payment instruments in our cross-border transactions in order to reduce the negative side effects of the current global economic system.”
China’s BRICS sherpa and vice minister of foreign affairs, Ma Zhaoxu, similarly stated:
We should implement the leaders’ instructions, promote financial corporation as a strategic priority, expand settlements in local currencies, and strengthen linkage between payment systems.
Moreover, he revealed: “China is considering [the] possibility of launching a BRICS AI development and cooperation center in China.”
Do you think the BRICS nations will create a common currency this year? Let us know in the comments section below.
Fed Observer Jim Grant Foresees Long-Term High Rates as FOMC Meeting Approaches
Market participants, including both investors and traders, have their attention keenly set on the upcoming Federal Open Market Committee (FOMC) meeting, slated for Dec. 13, 2023. There is widespread speculation about whether Fed Chair Jerome Powell will continue to uphold the current elevated benchmark interest rate. Concurrently, Jim Grant, renowned for his four-decade-long work on Grant’s Interest Rate Observer, holds the conviction that interest rates will stay at a “higher for much, much, much, much longer” level.
Economic Expert Jim Grant Anticipates Persistent High Interest Rates Post-FOMC
Presently, the federal funds rate stands between 5.25% and 5.50%, reaching its highest point in 22 years. This benchmark rate, crucial for banks and other financial institutions for inter-lending, serves as a pivotal mechanism for central bank officials in steering U.S. monetary policy. This week, the investment community is eagerly anticipating the Federal Open Market Committee’s (FOMC) announcement, as well as Fed Chair Jerome Powell‘s press remarks after the meeting.
Current market sentiment does not foresee a rate increase by the Fed in the imminent meeting. As per CME’s Fedwatch Tool, the likelihood of a rate hike stands at a mere 2.9%. Conversely, the odds favor the rate remaining unchanged at 97.1% as of Dec. 10, 2023. Additionally, a significant number of market observers predict that the U.S. central bank will have to reduce rates soon. Wall Street Journal journalist Justin Lahart, on Dec. 9, opined that the Fed “can’t put off preparing for rate cuts.”
According to Lahart’s analysis, a shift towards reduced rates seems imminent, with early 2024 likely seeing Powell needing “to start preparing for it.” Yet, not all share this view of impending rate reductions. JPMorgan’s leader Jamie Dimon anticipates an increase in interest rates and a looming recession. On December 9, esteemed financial author and publisher Jim Grant shared insights with Forbes, asserting his belief in persistently high rates for an extended duration.
With over four decades of monitoring the U.S. central bank through his publication, “Grant’s Interest Rate Observer,” Grant voiced concerns in his Forbes interview about an impending economic crisis, highlighting the U.S. economy’s burgeoning debt problem, worsened by years of almost zero interest rates. He anticipates the federal funds rate remaining “higher for much, much, much, much longer.”
Grant added:
It is the historical track record, it is the pattern, that interest rates exhibit a tendency to trend over generation-long intervals.
Still, contrary opinions suggest a shift towards rate reductions by the Fed in mid-2024. In an interview with CNN, KPMG’s chief economist Diane Swonk remarked, “We’re moving into higher-for-long-enough.” Additionally, futures markets indicate a high likelihood of a rate cut by the Fed in March 2024.
As the financial sector awaits the FOMC’s verdict, views are sharply divided. In the meantime, Grant expresses concern over the credit market, burdened by years of inexpensive debt affecting businesses, consumers, and governments. Grant’s opinion is very similar to Dimon’s who emphasized at the 2023 New York Times Dealbook Summit he wasn’t trying to scare people.
What do you think about Jim Grant’s insights? Share your thoughts and opinions about this subject in the comments section below.
APEC Meeting: Yellen Acknowledges Digital Assets’ Potential, Announces Regulation Advancements
U.S. Treasury Secretary Janet Yellen has acknowledged the advantages that the adoption of digital assets might bring to several key economic activities. After the Asia Pacific Economic Cooperation (APEC) finance ministers’ meeting, Yellen stated that while digital assets do pose risks, they have the potential to increase financial inclusion.
U.S. Treasury Secretary Janet Yellen Acknowledges Potential of Digital Assets
U.S. Treasury Secretary Janet Yellen acknowledged the possibilities that adopting digital assets might bring to several areas in the economies of the Asia Pacific Economic Cooperation (APEC). In a speech given after the APEC Finance Ministers’ Meeting held in San Francisco, Yellen delved into the achievements of the officials of the 21 different economies integrating the organization.
Yellen stated:
We see increasing adoption of digital asset technologies across the region and note their potential to increase financial inclusion and reduce the cost of cross-border transactions.
However, Yellen stressed this potential cannot be fulfilled without compliance. Yellen, who chaired the meeting, also warned about the problems that uncontrolled adoption of these assets might originate, stating that “digital asset technologies carry risks” and calling for establishing “proper regulation and other policies to manage those risks.”
The Need for Regulation
Yellen reported that topics like digital assets regulation, sustainability, and inclusion were discussed during the APEC meeting. She declared the group cemented its progress on key priorities, with advancing the group’s approach to digital assets’ regulation being one of them.
The U.S. Treasury secretary also said that APEC had achieved a commitment to continue working on the “responsible development” of digital assets, sustaining that many APEC economies were already leaders in this industry.
Yellen has supported establishing regulations for digital assets, calling to plug the holes that the current legal framework presents for these. In November 2022, after the demise of FTX, Yellen stressed that the effects of this event demonstrated “the need for more effective oversight of cryptocurrency markets.” At the time, she added that Congress should “move quickly to fill the regulatory gaps the Biden Administration has identified.”
More recently, during an interview given in June, Yellen reiterated her call to Congress to step up and pass “appropriate regulation” where needed, proposing to do joint work to achieve this goal. She also signaled her support for government agencies taking action on crypto cases “using the tools they have.”
What do you think about U.S. Treasury Secretary Janet Yellen’s remarks on digital assets? Tell us in the comments section below.
Ethereum Resilient Above $1,800 Pre-FOMC Meeting – Details
Ethereum (ETH), one of the leading cryptocurrencies, is displaying remarkable resilience in the face of recent market fluctuations. Despite experiencing relatively modest gains compared to Bitcoin (BTC) and other major altcoins, ETH has managed to consolidate its position above the 00 mark.
The big question on everyone’s mind is whether Ethereum can sustain this level or if it will succumb to the prevailing market sentiment.
In the world of cryptocurrencies, prices are highly susceptible to market sentiment. Cryptocurrencies often exhibit dramatic price swings based on the emotions and perceptions of investors and traders. Positive sentiment tends to drive prices up, while negative sentiment can lead to sharp declines. In this particular instance, the catalyst for market sentiment is the upcoming US Federal Open Market Committee (FOMC).
The Role Of FOMC In Influencing ETH And The Crypto Market
The FOMC is a key division of the US Federal Reserve responsible for setting monetary policy in the United States. One of the primary tools at its disposal is the adjustment of interest rates. When the FOMC meetings take place, the decisions made regarding interest rates can have a significant impact on various financial markets, including cryptocurrencies.
If the FOMC decision leans towards a hawkish stance, implying an increase in interest rates, it could result in a surge of bearish sentiment across the cryptocurrency market. In such a scenario, Ethereum sellers might exert pressure, potentially pushing the altcoin below the 00 mark.
Conversely, a dovish or unchanged policy stance could lead to a more positive sentiment, allowing ETH to maintain its current position and even experience upward momentum.
As of the latest data available on CoinGecko, Ethereum is trading at ,816, showcasing a 1.8% gain over the last 24 hours and a notable 8.8% increase over the past seven days. While these gains may appear modest when compared to the cryptocurrency market’s usual volatility, they reflect Ethereum’s capacity to maintain a steady footing in turbulent times.
Ethereum Layer 2 Solutions Break Records
A noteworthy development in the Ethereum ecosystem is the remarkable performance of Layer 2 (L2) solutions. These scaling solutions are designed to alleviate Ethereum’s network congestion and high gas fees.
Recently, L2 solutions set a new all-time high in Total Value Locked (TVL), briefly touching billion before stabilizing around .89 billion. This achievement surpasses the previous historic high registered back in April at .85 billion, signifying the increasing adoption of Ethereum’s Layer 2 solutions.
With the ,800 threshold serving as a crucial psychological barrier, the ultimate direction of Ethereum’s price movement hinges on the delicate balance between market sentiment and the decisions of key financial institutions.
(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
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Bitcoin, Ethereum Technical Analysis: BTC Surges Above $27,000 as Bulls Return Ahead of Upcoming FOMC Meeting
Bitcoin pushed past the ,000 level on Monday, as markets prepared for the upcoming Federal Reserve interest rate decision. Bullish sentiment was in full force in today’s session, despite the prospect of yet another rate hike. Ethereum was also higher to start the week.
Bitcoin
Bitcoin surged to a multi-week high on Monday, as traders began to anticipate the upcoming Federal Reserve meeting.
BTC/USD rallied to an intraday high of ,222.98 earlier in today’s session, following a low of ,415.52 the day prior.
As a result of the move, bitcoin climbed to its strongest point since August 31, when price peaked at ,576.
Despite the rise in momentum, bulls may not be satisfied, and are likely targeting a ceiling at the ,000 mark.
Monday’s gain comes as the relative strength index (RSI) jumped past a ceiling of 53.00, and is now residing at 58.25.
A resistance level of 60.00 will likely be the next major target for bulls currently in the market.
Ethereum
Ethereum (ETH) also moved higher to start the week, as traders rejected a breakout below the ,600 point.
Following a low of ,609.96 on Sunday, ETH/USD rose to an intraday high of ,653.07 earlier in the day.
This has resulted in ethereum surging to its highest point in the past ten days, closing in on a recent resistance of ,660 in the process.
Although price strength in ETH has also surpassed an obstacle of its own, it is on the cusp of colliding with another at the 50.00 mark. The index currently sits at a reading of 49.61.
It is likely that a breakout above this mark could lead ETH back above ,700.
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How would an interest rate hike impact crypto prices? Leave your thoughts in the comments below.
Bitcoin, Ethereum Technical Analysis: BTC Consolidates Lower Ahead of FOMC Meeting Minutes
Bitcoin dropped below ,000 on Wednesday, as markets consolidated ahead of the upcoming U.S. Federal Open Market Committee (FOMC) minutes. The minutes of last month’s meeting are expected to show the Fed’s potential path to further hikes this year. Ethereum fell for a second straight session.
Bitcoin
Bitcoin (BTC) consolidated on Wednesday, as markets prepared for the release of last month’s FOMC minutes.
BTC/USD dropped to an intraday low of ,656.03 earlier in the session, following a peak at ,106.00 the day prior.
The decline resulted in bitcoin retreating further away from last Friday’s one-year high, which was at ,443.
Overall, sentiment appears to have shifted bearish, and this comes after the relative strength index (RSI) failed to break out of a ceiling at 70.00.
As of writing, price strength is tracking at 63.76, which is marginally below a support point at 63.99.
The next visible floor appears to be at 59.00, and should momentum continue in this current direction, a collision could take place in the coming days.
Ethereum
Additionally, ethereum (ETH) was in the red for a second consecutive session, after failing to sustain a breakout of a key price ceiling.
Following a high at ,964.89 on July 4, ETH/USD moved to a low at ,920.79 earlier in the day.
Ethereum’s current downturn comes after it was unable to maintain Monday’s breakout of the ,970 resistance level.
In addition to this, the RSI also fell below a ceiling of its own at 61.00, and is now at a reading of 57.54.
Bears had expected a shift in momentum after price strength rose deep into overbought territory in the past two weeks.
Despite this, bullish sentiment could potentially return following this afternoon’s report.
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What are you expecting the FOMC minutes to show? Leave your thoughts in the comments below.
The High Rate Environment — Bank of America Faces Paper Losses Exceeding $100 Billion
Following the aftermath of the United States’ three major bank collapses, several market observers argue that the banking crisis in the country persists. Bank of America has recently garnered significant attention, with the Federal Deposit Insurance Corporation (FDIC) reporting that the financial behemoth incurred paper losses exceeding 0 billion by the close of the first quarter.
Unrealized Losses Haunt Bank of America: 9 Billion and Counting
The banking industry remains under scrutiny as U.S. banks grapple with hundreds of billions in unrealized losses, with some estimates reaching as high as .7 trillion. Attention has particularly turned to Bank of America (NYSE: BAC), the second-largest financial institution in the United States boasting an estimated balance sheet of around .39 trillion.
Recently, the FDIC released data indicating that Bank of America is confronting a loss of approximately 9 billion. During the Covid-19 pandemic, when interest rates were low and funds were readily accessible, Bank of America seemingly made a substantial investment in assets such as U.S. government bonds.
At that point, the bank, along with many others, deemed these bonds as safe and risk-free investments, despite their comparatively modest yields. However, the situation altered as inflation surged and the approach to economic management shifted.
The U.S. Federal Reserve transitioned from accommodating monetary policies to quantitative tightening, implementing the highest federal funds rate in 16 years. According to FDIC data, as reported by the Financial Times (FT), Bank of America’s losses reveal that the bank holds a fifth of the 5 billion in unrealized losses held by the nation’s banks at the end of Q1.
Dick Bove, the chief strategist at boutique broker Odeon Capital, commented to FT that “[Bank of America CEO] Brian Moynihan has done a phenomenal job in handling the bank’s operations, but if you look at the bank’s balance sheet, it’s a mess.” Although Bank of America’s stock has seen a 3% increase against the U.S. dollar in the past 30 days, statistics spanning six months show a decline of over 13% in the bank’s shares.
Financial institutions, such as Bank of America, have incurred unrealized losses that are much greater than the record losses recorded in 2008. Troubled balance sheets have been the driving force behind the financial turmoil experienced by Silicon Valley Bank, Signature Bank, and First Republic.
Multiple market observers anticipate further bank failures, echoing the sentiments of Robert Kiyosaki, the author of the best-selling book “Rich Dad Poor Dad.” In April, Jamie Dimon, the head of JPMorgan Chase, asserted that the consequences of the U.S. banking crisis will reverberate “for years to come.”
What do you think the long-term implications of Bank of America’s 9 billion in paper losses will be for the U.S. banking industry and the overall economy? Do you think the high rate environment will lead to more losses? Share your thoughts and opinions about this subject in the comments section below.
Brazil to Push De-Dollarization Agenda at BRICS Meeting
Brazilian President Luiz Inácio Lula da Silva has revealed his intention to raise the issue of de-dollarization at the next BRICS meeting. “Why Brazil and Argentina would trade in dollars. Why don’t we do it in our own currencies? Why can’t Brazil and China trade in their currencies? The question of why I need to buy dollars is on my agenda,” said the Brazilian president.
Brazil Intends to Discuss De-Dollarization With BRICS Partners
Brazilian President Luiz Inácio Lula da Silva stated Friday during the Paris summit on a new global financial pact that he intends to raise the issue of de-dollarization at the next BRICS meeting, Tass reported. The BRICS nations comprise Brazil, Russia, India, China, and South Africa. The economic bloc’s leaders’ summit is set to take place in Johannesburg, South Africa, on Aug. 22-24.
The Brazilian president was quoted by the news outlet as saying (translated by Google):
It’s not clear why Brazil and Argentina would trade in dollars. Why don’t we do it in our own currencies? Why can’t Brazil and China trade in their currencies? The question of why I need to buy dollars is on my agenda. And if it depends on me and only on me, then we will discuss this at the next BRICS meeting.
Leaders from 50 states are gathering in Paris for a two-day summit on a new global financial pact hosted by French President Emmanuel Macron. The objective of the meeting is to reach a consensus on reforming the global financial system and develop proposals for further discussion in other forums.
Last week, Macon reportedly expressed interest in attending the upcoming BRICS summit. However, Russia has opposed the French president’s participation, citing “a hostile and unacceptable policy” towards Moscow.
The Brazilian president has been vocal about countries ditching the U.S. dollar in global trade and using their national currencies instead. He has also expressed support for the creation of a common BRICS currency, a topic that is expected to be discussed at the economic bloc’s upcoming leaders’ summit. Lula said in April: “I am in favor of creating, within the BRICS, a trading currency between our countries, just like the Europeans created the euro.”
He also sees the BRICS bank as an alternative financial institution, stating in May: “We want the BRICS bank to strengthen as an alternative instrument for financing, and we will reinforce our cooperation with the African Development Bank.”
What do you think about Brazilian President Lula intending to raise the issue of de-dollarization at the next BRICS meeting? Let us know in the comments section below.