NVDA - Any Bitcoin Stocks Pay Dividends? Yeah Here's a Back Door | Benzinga
Riddle me this, my fellow contrarian.
If the Federal Reserve is really tightening its balance sheet, then why is the stock market already up 10% on the year?
Why is gold at all-time highs?
And why is bitcoin going completely bonkers?
The answer is "quiet QE."
As we discussed last summer in this column, Fed Chair Jay Powell's words have sounded hawkish. He and his cronies talked tough about inflation. But look at their actions: the Fed has quietly provided ample liquidity to the financial markets.
Which is why dollar hedges like gold and bitcoin have soared.
This "Fed pivot" happened in the fall of 2022, during the UK gilt ("gilt" is Brit-speak for bonds) crisis. Remember that? UK pension funds were levered up on "safe" gilts, which began to implode. Uh oh. Central banks sniffed a financial crisis and didn't care for the smell. They reversed course on their monetary tightening and loosened up.
Quiet QE.
Back in the day, this would have been reflected in higher gold prices. These days, investors are more likely to buy bitcoin as a hedge against money printing. Or a bet on it.
Ain't no casino like the crypto casino.
Prior to the gilt event, here in Contrarian Outlook, I'd been yapping about the Fed ad nauseam.
The upshot? As long as the Fed was tightening monetary liquidity (i.e., shrinking the money supply), it wasn't worth buying anything.
But this changed in late September 2022, when events across the pond quietly turned Jerry's tough stance inside out. I wrote the following to my Dividend Swing Trader readers:
The Bank of England is teasing financial animal spirits with its announcement ...