In the short term, interest rates win the fight against inflation.In the long term, Bitcoin is the winner.

Global liquidity is one interconnected system.

What happens in the United States can affect the entire world economy.

The largest liquidity is in the U.S.

U.S. GDP is 29 trillion, but its debt is 36 trillion.

During the pandemic, the Fed created 20% new dollars to save the economy.

Where did Bitcoin go? To an all-time high.

After inflation reached 9.1%, the Fed raised interest rates from 0% to 5.5%.

Where did Bitcoin go? Down to 15K. Why?

For more than 10 years, the Fed had injected liquidity through a Zero Interest Rate Policy.

Because the Fed could not maintain the “higher for longer” 5.5% interest rate for a full year, where did Bitcoin go?

All-time high again.

The Fed’s mandate to create jobs and maintain stability was threatened:

millions of jobs were lost and inflation had not returned to 2%.

The Fed cut rates aggressively. Where did Bitcoin go?

All-time high again.

If the world consisted of only you and me, and each of us had 100 million, then the bank should only hold 200 million.

But instead of 200 million, there is 350 million.

Whose money is that?

The price of rice is cheaper when the money supply is 200 million than when it is 350 million. Why?

Because it’s not the rice that becomes more expensive — it’s the value of money that declines.

Bitcoin rises because the yuan will be devalued (inflated) to stimulate the economy.

As the second-largest source of global liquidity, yuan inflation can move Bitcoin.

U.S. GDP is 29T, China’s GDP is 17T — even 9% inflation is already massive.

If the yuan falls, Japan could collapse, because its market would be flooded by cheap Chinese goods.

That’s why the yen also inflates.

Remember: the largest holder of U.S. debt is Japan, followed by China.

If they sell it, the DXY (U.S. Dollar Index) will crash.