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rajatsonifnance / Rajat Soni, CFA
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2024-05-06 07:52:40

rajatsonifnance on Nostr: The Federal Reserve is the central bank of the United States I think the best way to ...

The Federal Reserve is the central bank of the United States

I think the best way to think of the Federal Reserve is as a business

The only product it sells is US Dollars, which represent PURCHASING POWER around the world

The Federal Reserve has a monopoly on the creation of the US dollar

The US government and the Federal Reserve work hand in hand, even though the Federal Reserve is not federal and has no reserves

The Federal Reserve lends money to the US government whenever it needs

In exchange, it's the only bank in the world that's backed by the US government and the biggest military in the world

The pair have worked together to prevent any new assets outside of the system from rising

The value of dollars is purely based on supply and demand

The majority of people in the world use dollars as a short-term savings vehicle

For example, China and Japan hold over $2 TRILLION in US Dollar denominated government debt

Simply put, this debt is a contract that will pay out a certain amount of dollars plus interest

Since Japan and China assume they will need dollars in the future, they are OK with holding this agreement

These countries must continue using dollars for the dollar's value to remain stable

Why?

If fewer people want to use dollars, demand for the Fed's product will drop quickly

The Fed MUST convince the world that dollars are the best medium of exchange, store of value, and unit of account

If the world stops using dollars, the Fed goes out of business

So like any other struggling business, the Fed offers deals to convince its customers to continue using its product

It does so by increasing the amount of interest paid on dollar savings in bank accounts and US Dollar denominated debt

When you save in a bank account, you get more interest TODAY than you did 3 years ago - this is the Fed giving you an incentive to save rather than spend

When you choose to save in a bank account, you contribute to a(n):

1) Increase in demand for the dollar
2) Decrease in the supply of dollars in the economy (by NOT "selling" yours)
3) Decrease in demand for other goods
4) Increase in the available supply of other goods

Prices for goods drop and the value of the dollar rises

When you choose to spend dollars, you are doing the exact opposite. You contribute to:

1) Increasing the amount of dollars available to be "bought" (supply)
2) Fulfilling the demand for dollars in the economy (by "selling" yours)
3) Decreasing the supply of other goods available to be bought
4) Increasing the demand for other goods

Prices for goods rise and the value of the dollar falls

The Federal Reserve is failing at its job

The quality of this product has fallen over time - DOLLARS BUY 99% LESS GOLD THAN THEY DID IN 1933

This has led to the development of a new competitor

That competitor works REALLY WELL

Its name is #Bitcoin   

Bitcoin runs on code that can't be interfered with

It doesn't care about feelings

There will never be more than 21M Bitcoin because the people who own it don't want more to exist

If there's a way to increase the supply, demand for Bitcoin will drop to 0 very quickly (millions of people will sell if this happens)

Since Bitcoin is a direct attack on the US Dollar and the Federal Reserve, the Fed and the US government are trying their hardest to stop the Fed's customers from leaving the dollar-based financial system

- they are blocking off ramps
- they are trying to make privacy a crime
- they are working as hard as they can to spread fear, uncertainty, and doubt about Bitcoin

Their goal is to keep you a slave to their system

If you stop using their dollar, they have no more power

If you start building wealth and saving in another currency, demand for the dollar drops

When you stop relying on them, they aren't able to control you

STUDY BITCOIN

Share the message so others learn too

Want to learn more?

I made a video to teach you the basics of how money works in simple terms.

https://youtu.be/p3rgTOJDUaI?si=YLzUHaVPxPUSv_zZ
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