Lyn Alden: Nothing Stops This Train - BTC, AI Equities, Bond Market Analysis

Will AI end inflation? Lyn Alden breaks down how AI drives service price deflation while monetary inflation and scarce assets like Bitcoin remain untouched.

• Lyn Alden differentiates between AI-driven service price deflation and persistent monetary inflation, arguing that scarce assets like Bitcoin remain unaffected by the former.
• The analysis suggests that a peak in AI stocks could lead to capital rotation into Bitcoin, while US fiscal deficits and the Fed's inability to control inflation remain key concerns.
• The discussion also touches upon gold's outlook, the differing trade dynamics of Bitcoin and gold, and the implications of currency interventions and stablecoins.

Topics: Asset types, Market cycles macro sensitivity, Institutional adoption, Alternative assets, Interest rate sensitivity, Asset manager initiatives

Tags: #ai #inflation #bitcoin #monetarypolicy #usfiscaldeficits #aistocks #capitalrotation #gold #treasurymarket #stablecoins

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Bank Indonesia Chief Says FX Defense Unchanged as Tactics Shift

The new head of Bank Indonesia said the intensity of its rupiah defense remains unchanged even as it relies less on costly spot-market interventions and increasingly uses derivatives. The central bank is diversifying its foreign-exchange interventions, with spot transactions now accounting for only around 30% of total interventions, and the rest being operations in non-deliverable forwards markets. Bank Indonesia's monetary policy is focused on stability, and the bank is seeking to maintain a yield spread that investors receive at a fairly affordable cost, while also supporting growth as the economy is operating below capacity.

• Bank Indonesia is shifting its foreign-exchange intervention strategy, reducing reliance on costly spot-market actions and increasing the use of derivatives like non-deliverable forwards to defend the rupiah.
• The central bank aims to maintain rupiah stability and a favorable yield spread for investors while supporting economic growth, navigating challenges from rising US Treasury yields and oil prices.
• Despite tactical shifts, the intensity of Bank Indonesia's commitment to rupiah defense remains unchanged, with a focus on preserving foreign-exchange reserves and managing market volatility.

Topics: Jurisdictions, Legal regulatory, Market cycles macro sensitivity, Cross jurisdictional policy, Enforcement actions litigation, Interest rate sensitivity, Market volatility liquidity

Tags: #bankindonesia #rupiahdefense #foreignexchangeinterventions #derivatives #nondeliverableforwards #yieldspread #economicgrowth #ustreasuryyields #tariffs #monetarypolicy

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Swiss National Bank warns stablecoins may disrupt monetary policy

• The Swiss National Bank (SNB) warns that large stablecoins could disrupt monetary policy transmission by bypassing the traditional two-tier financial system.
• SNB Governing Board member Petra Tschudin advocates for regulation to maintain central bank control, rather than outright bans, acknowledging stablecoins' potential for modernizing payments.
• Switzerland is exploring regulatory licenses for stablecoin issuers and conducting wholesale CBDC experiments through Project Helvetia III, while domestic Swiss franc stablecoin markets remain small.

Topics: Jurisdictions, Legal regulatory, Blockchain usage, Public debt, Banks bankingsystems, Cbdcs central bank digital currencies, Established hubs, Regulatory sandboxes pilots, Securities law classification, Private enterprise ledgers, Wholesale cbdc settlement, Interaction stablecoins rwas, Privacy policy implications, Core banking integration

Tags: #swissnationalbank #stablecoins #monetarypolicy #regulation #centralbankdigitalcurrency #projecthelvetiaiii #financialstabilityreport #disintermediation #runrisk #paymentinstrumentinstitution

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Bessent Ramps Up Pressure on BOJ to Raise Interest Rates Further

US Treasury Secretary Scott Bessent ramped up pressure on Japan to take its next steps on policy amid renewed weakness in the yen and rising bond yields. Bessent met with Japanese Finance Minister Satsuki Katayama and reportedly told her and Bank of Japan Governor Kazuo Ueda that Japan's next step should be to raise interest rates. Katayama denied discussing monetary policy with Bessent, saying decisions on monetary policy are entrusted to the Bank of Japan and instead focused on the joint Japan-US intervention in the currency market.

• US Treasury Secretary Scott Bessent is pressuring Japan to raise interest rates due to yen weakness and rising bond yields.
• Japanese officials, including Finance Minister Katayama, deny discussing monetary policy with Bessent, emphasizing the Bank of Japan's autonomy.
• The article highlights the increasing focus on Japanese monetary policy by the US and the market's expectation of a potential rate hike in September.

Topics: Jurisdictions, Public debt, Market cycles macro sensitivity, Established hubs, Tokenized us treasuries, Interest rate sensitivity

Tags: #scottbessent #bankofjapan #interestrates #yen #bondyields #monetarypolicy #currencyintervention #japanesefinanceminister #kazuoueda #ustreasury

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The next currency crisis may be harder to contain because of stablecoins

A new report from New York Fed researchers found that stablecoin usage tends to rise during currency crises.

• A New York Fed report indicates that stablecoin usage increases during currency crises, providing individuals with dollar access outside traditional banking systems.
• This trend complicates traditional capital control measures, as stablecoins offer an alternative channel for foreign exchange exposure.
• While issuers and regulated exchanges offer some control points, the growing scale of stablecoins presents a significant challenge to governments defending their currencies during financial stress.

Topics: Asset types, Jurisdictions, Scalability, Stablecoins digital cash, Cross jurisdictional policy, Institutional capital inflows

Tags: #stablecoins #currencycrisis #newyorkfed #capitalcontrols #blockchain #dollarexposure #financialstress #monetarypolicy #enforcement #usdc

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Ray Dalio advierte sobre una crisis de deuda en EE. UU. y sugiere invertir en oro y Bitcoin

Ray Dalio advierte sobre los riesgos de la deuda estadounidense y recomienda diversificar las carteras con oro y una pequeña exposición a Bitcoin.

• Ray Dalio warns of an impending US debt crisis within three years, advising a reduction in exposure to sovereign bonds.
• He recommends diversifying portfolios with 10-15% in gold and a small allocation to Bitcoin as hedges against inflation, currency devaluation, and sovereign debt risks.
• The analysis highlights rising US Treasury yields, Japan's reduced holdings, and significant fiscal deficits as key indicators of this potential crisis, favoring assets independent of government solvency.

Topics: Asset types, Market cycles macro sensitivity, Public debt, Financial instruments, Interest rate sensitivity, Tokenized us treasuries, Global sovereign bond tokenization, Impact monetary policy

Tags: #raydalio #usdebtcrisis #gold #bitcoin #diversification #bridgewaterassociates #treasurybonds #fiscaldeficit #monetarypolicy #inflationhedge

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Venezuela abandoning the bolivar and adopting the U.S. dollar would be the biggest currency switch since the advent of the euro, Hanke says | Fortune

"Taming inflation is the key to restoring stability in Venezuela, and all the other progress flows from that."

• Economist Steve Hanke proposes Venezuela officially adopt the U.S. dollar to combat 400% inflation and restore economic stability.
• This move would involve abandoning the bolivar and the central bank, a significant currency switch with potential to attract foreign investment and lower interest rates.
• Despite 'spontaneous dollarization' already occurring, challenges remain, including relinquishing monetary policy control and potential political hurdles, though Hanke sees a 50-80% chance of approval.

Topics: Jurisdictions, Public debt, Financial inclusion, Emerging hubs, Tokenized us treasuries, Access unbanked underbanked

Tags: #venezuela #stevehanke #dollarization #bolivar #inflation #currencyswitch #usdollar #monetarypolicy #centralbank #foreigninvestment

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Arthur Hayes Flips the Yen Risk Thesis for Bitcoin

Key Takeaways For Bitcoin, how Japan strengthens the yen may matter more than the currency move itself. Hayes’s scenario relies […] The post Arthur Hayes Flips the Yen Risk Thesis for Bitcoin appeared first on Coindoo.

• Arthur Hayes proposes a new thesis where Japan could strengthen the yen by utilizing the Federal Reserve's FIMA Repo Facility, rather than aggressive Bank of Japan tightening.
• This strategy would involve Japan exchanging US Treasury securities for dollars, which they would then sell for yen, potentially injecting dollar liquidity into the market.
• However, the FIMA facility is currently unused, and Hayes's scenario hinges on significant policy changes by the Federal Reserve and substantial, persistent usage by Japan.

Topics: Asset types, Jurisdictions, Market cycles macro sensitivity, Financial instruments, Cross jurisdictional policy, Interest rate sensitivity

Tags: #arthurhayes #bitcoin #yen #fimarepofacility #federalreserve #ustreasuries #liquidity #monetarypolicy #bankofjapan

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Bessent’s Whatever-It-Takes Yen Vow Masks Limited Firepower

Treasury Secretary Scott Bessent's suggestion of a no-limits approach to helping Japan rescue the yen may be limited by his firepower to do the job, with the Exchange Stabilization Fund having holdings of less than $220 billion. The US can influence the narrative by coordinating with Japan on intervention, but can't rewrite the fundamentals, according to Nathan Thooft, a senior portfolio manager at Manulife Investment Management. Pressure for Japan or the US to step in again could rise if the yen sinks past 160 per dollar, a level seen as a key psychological threshold, with authorities having intervened to support the currency when it crossed that level in the summer of 2024.

• US Treasury Secretary Bessent's 'whatever it takes' vow to support the yen faces limitations due to the Exchange Stabilization Fund's finite resources, despite the Fed's theoretical unlimited firepower.
• The yen's recent slide past 159 per dollar highlights the challenges of currency intervention, with market participants questioning the sustainability of support efforts beyond psychological thresholds.
• Underlying pressures like interest rate differentials and Japan's fiscal outlook continue to weigh on the yen, suggesting that FX intervention may only offer temporary relief.

Topics: Public debt, Jurisdictions, Market cycles macro sensitivity, Tokenized us treasuries, Established hubs, Interest rate sensitivity

Tags: #yen #treasurysecretarybessent #exchangestabilizationfund #currencyintervention #federalreserve #interestratedifferentials #japanesegovernmentbonds #ustreasuries #yendepreciation #monetarypolicy

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Japan Decides on Rates – How It Can Affect Bitcoin

Key Takeaways BOJ meets July 30–31, after the Fed. Markets expect rates to remain at 1%. The Outlook Report is […] The post Japan Decides on Rates – How It Can Affect Bitcoin appeared first on Coindoo.

• The Bank of Japan's upcoming rate decision is expected to maintain rates at 1%, but the accompanying guidance will be crucial for the yen and bond yields.
• A hawkish outlook from the BOJ could strengthen the yen and pressure Bitcoin through carry trade unwinds, especially if leverage is high in derivatives markets.
• The article analyzes potential outcomes of the BOJ meeting and their impact on Bitcoin, considering factors like Fed policy, ETF flows, and intervention risks.

Topics: Market cycles macro sensitivity, Jurisdictions, Public market access, Interest rate sensitivity, Established hubs, Bitcoin etf

Tags: #bankofjapan #bitcoin #yen #interestrates #carrytrade #federalreserve #liquidity #monetarypolicy #usdjpy #riskassets

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CLO Market Whipsawed by Japan Policy Shifts, Study Shows

Japanese banks have been among the biggest buyers of collateralized loan obligations, making the cost of swapping yen into dollars a key driver of both the price and pace of issuance. Shifts in Japanese regulation and monetary policy have reshaped who the key buyers are and how aggressively they step in or pull back as funding costs change, rippling through to the financing of heavily indebted American companies. Changes in Japanese prudential regulation, BOJ monetary policy, or balance-sheet capacity reshape how forcefully funding shocks transmit to the pricing of new US CLO deals.

• Japanese banks' buying of US Collateralized Loan Obligations (CLOs) is significantly influenced by the yen-dollar cross-currency basis, which is in turn affected by Japanese regulatory and monetary policy shifts.
• Recent changes in Japanese securitization rules and the Bank of Japan's policy normalization have altered the dynamics of CLO demand, making it more sensitive to funding costs and impacting the financing of heavily indebted US companies.
• The study highlights that decisions made in Japan have a substantial, albeit often overlooked, impact on the pricing and issuance of US CLO deals and subsequently on US corporate credit.

Topics: Asset types, Jurisdictions, Market cycles macro sensitivity, Financial instruments, Established hubs, Interest rate sensitivity

Tags: #collateralizedloanobligations #clo #japanesebanks #crosscurrencybasis #yendollarfunding #usclomarket #bankofjapan #monetarypolicy #securitizationrules #leveragedloans

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Federal Reserve taps former Walmart CEO Doug McMillon to build real-time economic data engine

• The Federal Reserve is forming task forces to modernize its economic data analysis, co-led by former Walmart CEO Doug McMillon and academics Raj Chetty and Kevin Murphy.
• The initiative aims to leverage real-time data, similar to insights gained from retail transactions and private-sector datasets, to make economic indicators faster and more accurate.
• This focus on high-frequency data by the Fed could narrow the gap with on-chain analytics used in crypto, potentially influencing how digital asset markets are viewed.

Topics: Jurisdictions, Infrastructure providers, Scalability, Regulatory sandboxes pilots, Major financial incumbents, Growth metrics

Tags: #federalreserve #dougmcmillon #walmart #realtimedata #economicindicators #consumerspending #rajchetty #kevinmurphy #monetarypolicy #crypto

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IMF Warns Tokenization Demands Urgent Monetary Policy Adjustments as Risks Continue to Evolve

• The IMF warns that accelerating tokenization requires urgent adjustments to monetary policy frameworks due to evolving financial risks.
• Risks are shifting from traditional bank balance sheets to digital platforms and shared ledgers, necessitating new oversight and intervention strategies.
• Policy choices regarding settlement assets, legal certainty, and interoperability are crucial for managing potential fragilities and ensuring financial stability.

Topics: Legal regulatory, Scalability, Blockchain usage, Regulatory sandboxes pilots, Market depth liquidity, Private enterprise ledgers

Tags: #tokenization #imf #monetarypolicy #financialrisks #digitalplatforms #sharedledgers #smartcontracts #liquidity #operationalresilience #internationalcoordination

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US national debt reaches record $39.4 trillion, and crypto markets are paying attention

• The US national debt has reached a record $39.4 trillion, with annual deficits projected to exceed $2 trillion, raising concerns about future government financial flexibility.
• Stablecoin issuers, notably Tether, have become significant buyers of US Treasury bills, creating a complex interdependence between crypto reserves and traditional bond markets.
• The growing debt burden and potential for inflation may drive institutional investors towards hard assets like Bitcoin and gold, while also influencing Federal Reserve monetary policy decisions.

Topics: Public debt, Asset types, Institutional adoption, Tokenized us treasuries, Financial instruments, Asset manager initiatives

Tags: #usnationaldebt #treasurybills #stablecoinissuers #tether #usdt #bitcoin #cryptoinvestors #debtservicingcosts #monetarypolicy #shadowmoneymarketfunds

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American consumers remain cautious amid energy shock from Iran war

• American consumers are showing caution due to a 40.5% increase in gas prices and record-low consumer sentiment, influenced by the Iran conflict.
• This economic pressure is impacting hiring decisions and reshaping crypto investment strategies, with Bitcoin miners facing risks from oil price fluctuations.
• A new stablecoin, USDi, is gaining attention for its design to protect purchasing power against inflation, while restrictive monetary policy is expected to continue.

Topics: Asset types, Market cycles macro sensitivity, Jurisdictions, Stablecoins digital cash, Interest rate sensitivity, Inflation recession impact, Established hubs

Tags: #usdi #stablecoin #inflation #gasprices #consumersentiment #iranconflict #bitcoinminers #energyshock #monetarypolicy

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Few people have the ability to understand at a deep level both traditional finance & monetary policy AND tokenization & the new RWA frontier.

Few people have the ability to understand at a deep level both traditional finance & monetary policy AND tokenization & the new RWA frontier. Izabella Kaminska is one of those, which is why we always read her articles with great interest. Marieke Flament & Nicolas Colin's Currency of Power display the same mix of competences, and offer an interesting perspective on the same questions in their latest article titled "Tether.io Is Not a Stablecoin Company". Happy reading. https://lnkd.in/ew6M8UTq

• The article highlights the rarity of individuals possessing deep understanding of both traditional finance/monetary policy and tokenization/RWA.
• It references Izabella Kaminska and Marieke Flament & Nicolas Colin's 'Currency of Power' as examples of such expertise, particularly in relation to an article questioning Tether's stablecoin status.
• The post also links to related content about tokenized gold and corporate treasuries, suggesting a focus on the intersection of digital assets and traditional financial concepts.

Topics: Asset types, Institutional adoption, Blockchain usage, Alternative assets, Asset manager initiatives, Ethereum evm l 1 s

Tags: #tokenization #rwa #traditionalfinance #monetarypolicy #stablecoin #tether #digitalgold #izabellakaminska #currencyofpower

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Stablecoins are becoming a central bank problem hiding in T-bill markets

BIS research puts private dollar tokens closer to sovereign funding markets than the payment-rail debate suggests. The post Stablecoins are becoming a central

• Stablecoins are increasingly influencing short-term Treasury bill yields, indicating their growing role in sovereign funding markets beyond just payment rails.
• The Bank for International Settlements (BIS) highlights that while stablecoins offer programmability, they lack the institutional support and liquidity backstops of traditional money, posing risks to financial integrity.
• Central banks are exploring tokenized deposits and central bank reserves as an alternative to private stablecoins, aiming to integrate digital dollar instruments within existing regulatory frameworks.

Topics: Asset types, Jurisdictions, Public debt, Stablecoins digital cash, Established hubs, Tokenized us treasuries

Tags: #stablecoins #tbills #centralbanks #bis #monetarypolicy #reservemanagement #dollarfunding #tokenizeddeposits #tether #usdc

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Stablecoins are quickly becoming the Kevin Warsh’s Fed’s next policy problem

Stablecoins have moved from a crypto-policy-side market to Kevin Warsh's Federal Reserve's dollar-policy agenda. Fed Governor Christopher Waller used the central bank's June 22 dollar

• Stablecoins are increasingly becoming a focus of the Federal Reserve's dollar policy agenda, moving beyond a purely crypto-market concern.
• The Fed views stablecoins as potential transmission channels for global dollar intermediation, impacting demand for Treasury markets and bank funding.
• The article highlights the growing scale and turnover of stablecoins, prompting central bank research into their integration with traditional financial systems and potential policy implications.

Topics: Asset types, Jurisdictions, Institutional adoption, Stablecoins digital cash, Cross jurisdictional policy, Banking depository pilots

Tags: #stablecoins #federalreserve #dollarpolicy #christopherwaller #digitalassets #tether #usdc #treasurymarket #monetarypolicy #tokenizeddeposits

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How the U.S. Dollar Influences Crypto and Tokenized Gold

• The U.S. dollar's influence on crypto and tokenized assets, including Bitcoin and gold, remains significant, with dollar liquidity shaping investor behavior and capital flows.
• Stablecoins have reinforced the dollar's dominance by acting as digital versions of dollar liquidity within the crypto ecosystem, facilitating transactions and serving as collateral.
• Tokenized gold offers a new category for investors, blending traditional gold ownership with blockchain accessibility, and its performance, like Bitcoin's, is often influenced by dollar strength and monetary policy.

Topics: Asset types, Blockchain usage, Institutional adoption, Alternative assets, Ethereum evm l 1 s, Asset manager initiatives

Tags: #usdollar #crypto #tokenizedgold #bitcoin #stablecoins #liquidity #monetarypolicy #digitalbullion #assetbackedtoken #blockchain

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Geopolitics, fiscal expansion, and the new inflation regime

Rethinking portfolio diversification in a higher-inflation world.

• The article argues that recent disinflation may be fragile due to geopolitical fragmentation, fiscal expansion, and supply constraints, suggesting a new, higher-inflation regime.
• Traditional portfolio diversification strategies (stock-bond correlation) are becoming less reliable as both equities and bonds may decline simultaneously in this new environment.
• Investors should consider assets that benefit from inflation variability, such as real assets, and focus on understanding fiscal dynamics and geopolitical alignments.

Topics: Market cycles macro sensitivity, Legal regulatory, Jurisdictions, Interest rate sensitivity, Inflation recession impact, Political opposition bans, Cross jurisdictional policy

Tags: #inflation #geopolitics #fiscalexpansion #portfoliodiversification #realassets #monetarypolicy #supplyconstraints #stockbondcorrelation #disinflation #regimechange

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