17th September 2024 > > Central banks & Cathedra.

tl;dr

Warren is applauded for the very first time in this daily missive. It seems highly unlikely that we will ever see a repeat of such an event. Cathedra Bitcoin will soon be a part of the CC Treasury reserves, and not just because the Islingtonian elite will take offence at its core view of the world.

Market Snap

Market Wrap

All eyes on the Fed tomorrow as it embarks once more on manipulating the dollar yield curve with rate cuts all but guaranteed.

Curious Cryptos’ Commentary – Central banks

It is one of my bugbears that politicians of all stripes lie when they say that their respective central bank is independent, for it just ain’t so. Never has been, never will be.

Senator Elizabeth Warren, self-declared head of her own anti-crypto army, often appears in these pages accurately portrayed as a delusional and dastardly villain. Credit where credit is due though – Warren has just proved me spectacularly right on the subject of central bank independence, so I am grateful to her on this one occasion.

Warren and some other senators in her party have written to Federal Reserve Chairman Jerome Powell stating that this week’s manipulation of the yield curve is for a cut of 0.75% and not the 0.25% or 0.50% that many expect. The letter explicitly states:

“If the Fed is too cautious in cutting rates, it would needlessly risk our economy heading towards a recession. The Committee must consider implementing rate cuts more aggressively upfront to mitigate potential risks to the labor market.”

This high-profile and very public attempt to force the Fed’s hand is all to do with the upcoming Presidential election, though one cannot argue with the substance of the senators’ demands. They should have gone further by either reclaiming direct control over interest rates, or best of all, relinquishing the short-term price of credit risk to be left entirely to the markets to determine with no interference from politicians or their servants at the central bank.

Somehow, for one such as Warren, it seems unlikely to me that she would ever countenance letting go of control of anything ever, but she has at least finally killed the illusion of central bank independence, and we are all the better for it.

Curious Cryptos’ Commentary – Cathedra Bitcoin (CBIT)

This Canadian BTC miner is pivoting away from mining to developing data centres, stating:

“The last three years have demonstrated to us that bitcoin mining is not a reliable way to grow shareholders’ bitcoin per share.”

Accompanying this strategic shift is a public declaration that henceforth all capital allocation decisions will be made with just one objective in mind, that of increasing BTC per share:

https://cathedra.com/_resources/pdfs/Cathedra-Bitcoin-Inc-Bitcoin-Treasury-Strategy.pdf?v=091706

The company is explicit that it will follow in the footsteps of MicroStrategy by using equity, debt, and convertible bonds to raise cash to purchase more BTC.

I will be investing in CBIT later today once the Toronto Stock Exchange opens for business, though this is obviously not a recommendation, merely a statement of intention.

…

Might I suggest that you also read the “2022 Letter to Shareholders” issued by the CEO and President of Cathedra:

https://cathedra.com/investors/letters/2022-letter-to-shareholders

I must point out to those of a sensitive disposition that a part of this letter expresses the view that the rush to net-zero by rationing of energy is a modern-day version of the Malthusian philosophy, and is highly critical of the thinking behind net-zero. I understand that this is an unpopular line of argument that will upset some, and is actually not allowed to be expressed in some news outlets, such as the Financial Times and the BBC. I remain wedded to a belief in liberalism, freedom of speech, and the benefits of debating contentious issues.

This letter also takes aim at CBDCs concluding:

“The Malthusians believe progress is zero (or even negative) sum; resources are finite and “degrowth” is the only viable path forward; we ought to judge human action first and foremost by whether it disturbs the natural world. This movement is characterized by totalitarian CBDCs and a desire to make energy more scarce and expensive, so that earth’s resources can be appropriately rationed.

On the other hand, the Prometheans carry with them a more optimistic vision: progress is positive-sum; human creativity allows us to liberate and employ resources in novel ways, in turn preserving the natural world for our own benefit; and that human flourishing is the moral standard by which we should evaluate human action.”

If this upsets you, don’t say you weren’t warned.