“IT’S FINALLY STARTING! The Fed’s About to Send BTC & Crypto to the Moon” – Chamath & Raoul Pal #Finance

I think that you have to like realize we are at a point in the economy where you cut rates because there’s tension and there’s tension between employment and unemployment there’s tension between earnings growth and contraction and so it’s a stimulatory move so if you

look through that stimulatory move why is the Fed doing this and why will they cut probably all the way down to 2 or 3% by the end of 26 it’s because we now need to stimulate the economy again I think a lot of people are commenting on the fact that the only other two times where we’ve

had a 50 basis point rate cut in modern history it has been just before a recession the US Federal reserve’s decision to cut rates by 50 basis points for the first time in over four years is Raising fears of an impending recession for the world’s largest economy experts have observed

that the Cent Cal bank has initiated a rate cutting cycle with a 50 basis point cut only Thrice in history during the crisis in 2001 the great financial crisis in 2007 and the covid-19 pandemic in 2020 these were all during severe situations that were followed by severe economic declines and many

believe the fed’s decision to start with a 50 basis point cut despite the official assurance that all is well with the economy signals that serious problems lie ahead for the the US economy according to billionaire investor and entrepreneur chamath Palapa and billionaire venture

Capitalist David saak the fed’s decision to start with a 50 basis point cut instead of a quarter percentage cut like the market expected means the central bank is expecting some troubling times ahead both billionaire besties warn that Powell and other fomc officials are

already in panic mode however they are trying hard to maintain a sense of calm and normaly so the entire economy does not go up in flames chamath and saaks believe the FED will announce further rate Cuts before the year ends and commence a full printing cycle when full Panic sets in next year real

Vision founder and CEO Raul pal is certain of more cowbell as he describes the fed’s quantitative easing and money printing Cycles starting in about 10 weeks a recent post he made on social media platform X reads I love the smell of more cowbell in the morning the everything code is in full

play and this is around the third inning remember Markets lag Global Liquidity by 10 weeks the new China stimulus doesn’t even appear on the chart yet so this was prior

to today’s announcement in the latest episode of the all-in podcast chath and saxs share their views on the fed’s 50 basis points rate cut and what it means for the US economy in the coming weeks and months as we bring you clips from the discussion as well as more tweets from Raul pal

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more likely scenario Cham is this similar to the dotcom in great financial crisis or similar to 2020 well I think 2020 you have to put it at Big asteris because the question is what would have happened had there not been Co and had there not been an entire global shutdown so if you go back to that

chart you could probably just extrapolate and cut out that part that’s flat because the part that’s flat from 2020 to 2022 was largely artificially created because on top of that we injected so much money into the economy the reality is we probably would have raised at some rate of

change that you could have predicted from 2016 so what do you what do you take away from that I think that you have to like realize we are at a point in the economy where you cut rates because there’s tension and there’s tension between employment and unemployment there’s tension

between earnings growth and contraction and so it’s a stimulatory move so if you look through that stimulatory move why is the Fed doing this and why will they cut probably all the way down to 2 or 3% by the end of 26 it’s because we now need to stimulate the economy again so the reason

why Markets tend to fall once the rate cut cycle starts is because the next couple of quarters sort of demonstrate what I think the FED is expecting which is that there’s pressure in

the economy we have not seen that flow through in earnings or in how companies describe Markets on the field by and large except for a few so I think this part of the cycle now will be about

all of these companies telling us whether there’s nothing to see here or whether there is actual real pressure and if there is real pressure it’ll probably look like the several times before where you’re just going to have to contract the value of financial Assets

because they’re just not worth as much when they’re earning less I think a lot of people are commenting on the fact that the only other two times where we’ve had a 50 basis point rate cut in modern history it has been just before a recession so I think this happened in 2001 2007

right before the recession and the FED had to do a dramatic rate cut because they could see in the data that things were weakening so a lot of people are asking the question well is that what’s going on here now Pal’s comments though are indicating that the economy is in good shape he

said the econom is in very good shape that um basically indicating that they had tamed Inflation and that they would look to cut another 50 basis points this year so Pal’s rhetoric is uh in a way at odds with the magnitude of this cut the you know so why didn’t they

just cut 25 basis points I think people are trying to figure that out yeah if the economy is hot why would you tipto into rate Cuts uh and just do 25 now that’s the key thing if you look at the The Dot Plot and if you look at where the Smart Financial actors are betting where rates end so

it’s hard to sort of like look at any point in time 50 now 25 later what does it all mean it’s very hard to know but what is much clearer is where do we think terminal rates will be in even in the next 18 months and it is dramatically lower for where they are now and I think that

support sacks your that argument that you just made which is if you’re going to basically cut this aggressively over the next year to year and a half by the estimates of very smart Financial actors whose job it is to spend every day observing the Fed then they must see something because

otherwise as you said you could take a much more gradual approach according to Raul pal it’s not exactly a matter of the FED seeing something but a matter of what they’ve known all along and an agreement all central banks had in the aftermath of the great financial crisis which was to

keep printing periodically to prop up their respective economies and prevent the allout collapse that should have taken down the entire Financial system during the crisis this is the first part of Pal’s everything code thesis which he has been talking about for years and has so far shown an

insane correlation to Central bank’s actions last year when others were calling for a global recession pal maintained that it would simply not be allowed to happen because central banks would step in just before things get too bad he continues to maintain that belief noting that the fed and

other central banks will have to cut even further in the coming months in accordance with the 2008 agreement and to enable them to service their huge Debts a tweet he made after the fed’s announcement last week reads all the hot takes on the FED seem to forget that the real

fed funds rate is just way too high for the current economy and too high to service erode the Debt rates will go lower let’s get back to chamath and Sachs and so I think that the Smart Financial actors are guessing recession or guessing contraction I think what they’re

also guessing is similar to non-farm payrolls we’re going to go through a couple of difficult GDP revisions probably downward and I think that will have an impact to people’s sense of how the economy is doing even more than what their sense is today which is already teetering on

it’s at best okay and I think all of that has to play itself out so it’s going to be a very complicated and dynamic fall in that respect just in terms of the labor market what do you see you know in companies right now you know hiring the talent pool Etc well I mean in tech things are

are pretty good I mean they they’re not as absurdly frothy as they were during the bubble of 2020 and 2021 but things are good you have this huge AI Tailwind now and there’s just a ton of investment going into AI there’s a little bit of A Tale of Two Cities going on if

you’re in AI things are really bubbly and if you’re outside AI they’re they’ve returned to much more normal levels in terms of Valuation and Company operations all that kind of stuff just to go back to the state of the economy for a second the the reason why

a lot of people were predicting a recession including me for a while is that the Yield curve inverting has been an almost perfect gauge of whether a recession is coming it’s when basically the FED raises short-term Interest Rates above long-term

Interest Rates normally long rates are the ones that should be higher because investors demand a higher rate of return to tie up their money for longer so something’s really off and kind of broken when short rates go above long rates the Yield curve inverts

and it’s always been the Prelude to a recession but the recession doesn’t come when the Yield curve inverts it usually comes when the Yield curve de inverts and the reason for that is because the FED now sees weakness and dramatically cuts the short

rates so in other words it jacks up the short rates to control Inflation that works it trickles through the economy the economy cools down and then the FED says oh maybe we’ve over corrected they slam on the brakes and then they cut rates to basically make up for the effect

in the economy so the Yield curve has finally de inverted and the question is just do we now get that recession or did the FED manage this to a soft Landing I don’t think we know I’m not I’m not like calling recession but this is the the thing that people are

concerned about yeah well saak we were talking about AI in the group chat right yeah I think it’s now becoming really clear that call centers are going to be the first really big disruption caused by AI yeah I mean all the level one customer support is going to get replaced by AI I mean llms

plus voice cuz you know open AI just released their audio API you saw that at the all-in summit we released A Mir shimer AI yeah where we trained it on all of his work and you can go to Mir shimmer. and ask it questions and it will tell you the answers in his voice because we cloned his voice using

resemble AI anyway so AI can do Vo now and it can be trained extremely well on large data sets to give you answers to questions which is pretty much what customer support is so I think it’s now becoming clear that I I think within the next two to three years you’re going to see a

massive disruption in that pal is also certain about the disruptive powers of artificial intelligence and how completely disruptive Technologies like AI Robotics and energy storage will change the world in the coming years on Tuesday the real vision CEO quoted a tweet that shows a CashNews.co of

open ai’s danne vahi talking about how AI technology has been the greatest cost depreciating technology ever invented in the CashNews.co vahi explains that the cost per million tokens used for each of open ai’s models has fallen from $36 to 25 in the past 18 months Pal’s tweet

made in reaction to the incredible Revelation reads as I’ve said AI is a deflationary nuclear bomb the cheaper gets the cheaper everything gets electricity is the other one No One Believes it now but we are reaching the deflationary Tipping Point there too which accelerates AI which

accelerates cheaper energy and compute pal in fact believes this massive acceleration will help solve The World’s productivity and massive Debt problems and Ai and Robotics will provide infinite humans to help improve productivity so we can take on the massive

Debt burden more easily he believes this AI Renaissance will begin in 2030 completely changing the global economy and Markets that’s why pal says to invest and make as

much money as possible before then because the world will become completely unrecognizable are you looking forward to more rate cuts and More Cowbell in 20125 please share your thoughts on Raul Pal’s tweets and chath and sack’s Analysis in the comment section below also ensure you like

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