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Here you can see Bitcoin to gold. This This one isn't as clear cut. Um there's been a lot of fear around quantum computing, around Michael Saylor selling, many people saying, "Oh my gosh, you know, his debt to asset ratio, or debt to market cap ratio, I think, is in the 40 45% range. He may be forced to sell more and more Bitcoin."
Um we shall see. We shall see. As I said, we think gold will continue to come down. So, that will put upward pressure on this ratio. And as far as Bitcoin, uh there are a few on-chain indicators that are saying the bearishness has reached an extreme. We shall see. We shall see. Maybe this is going to be a test.
Cathie Wood recently shared a daring new perspective on the economy, Bitcoin, and her predictions for the future of the market. The greatest possibilities may yet lie ahead, according to Cathie, despite the fact that many investors are still concerned about inflation, interest rates, and rising uncertainty.
She thinks that significant technical advancements and shifting economic circumstances are fostering the ideal conditions for significant assets like Bitcoin to flourish. Is the market about to make a move that most people aren't ready for? We'll examine her most recent forecasts, her view for Bitcoin, and why they might have significant ramifications for investors worldwide in today's video.
. Here, we're on to markets. And fascinated by this chart still. Uh the gap that opened up, and I think this when history is written and has enough hindsight, uh we'll look at the 22 2022 rate hikes as, you know, a massive mistake. It caused a lot of harm. The metals to GDP I mean, metals to gold ratio in the green there, went straight down.
It is now starting to recover. That's good news. It's consistent with the economy uh starting to recover. Um as you can see, interest rates have pretty much been range bound in the last few years despite some of uh the the charts I showed earlier in terms of the disgorgement of Treasury securities around the world.
Uh and they're buying gold. If we're right, that's going to be a major mistake because if you'll notice uh the day that Kevin Warsh was appointed, that President Trump appointed Kevin Warsh, the gold price peaked. The gold price peaked. Uh and I do believe that Kevin Warsh, just like Greenspan, uh will keep a very close eye on gold as an important inflation gauge.
Here, S&P to crude oil bouncing back. Uh this is very reassuring. You saw what happened in the '70s, it absolutely imploded, and that created a bear market that lasted from 1966 to 1982. And uh and you can see we're we're we're not continuing down. We're moving in the other direction, and we think that will continue, especially if we're right on oil prices.
Here is the S&P to gold. And again, I reference this because I respect Gavekal, uh a research house out there. They they um tuned us into this many years ago, and you can see again in the '70s what a disaster. Um you can see we're stabilizing here, S&P picking up relative to gold because the S&P is going up and gold is going down.
Uh we do think that's going to continue today notwithstanding if we've got Kevin Warsh right, and I think we do. Here you can see Bitcoin to gold. This This one isn't as clear-cut. Um there's been a lot of fear around quantum computing, around Michael Saylor selling, many people saying, "Oh my gosh, you know, his debt to asset ratio or debt to market cap ratio, I think, is in the 40 45% range.
He may be forced to sell more and more Bitcoin." Um we shall see. We shall see. As I said, we think gold will continue to come down. So, that will put upward pressure on this ratio. And as far as Bitcoin, there are a few on-chain indicators that are saying the bearishness has reached an extreme. We shall see.
We shall see. Maybe this is going to be a test. But you can see here where the dollar is. It's a little above 99. So, Kalshi or the prediction markets are expecting an appreciation in the dollar despite all of the narratives out there that the dollar is in a death spiral. I mean, that's a bit of an exaggeration, but a lot of a lot of forecasters predicting uh the dollar continuing to go down.
And you can see here it has actually stabilized. Uh continuing to go down uh because of whether it's the end of American exceptionalism exceptionalism or our twin deficits, the budget deficit and the trade deficit. Um but if we are right, the dollar will turn up decisively this year as the impact of the tax package, which started last year, filters through into booming economic activity.
And the returns on invested capital in the in the United States continue to go up relative to those in the rest of the world. Now, one other thing I'll say about the dollar here, high energy prices typically help the dollar. Uh and and and so it should have stabilized if not have gone up because oil is priced in dollars for the most part.
Um so so that didn't happen and we have to recognize that. Uh but look what is also happening on the other side of that. Here are the holdings of Treasury securities by countries in the world. We have uh China, Japan, and India. And we also have Turkey. Turkey's in the green. And I saw the headline a couple of weeks ago which said Turkey has effectively drawn down its Treasury reserves to almost nothing.
Uh as it's been supporting its currency. So, what's it doing? It's selling Treasury securities, getting dollars for those, and then selling the dollars and buying Turkish lira to try and support the currency. Well, they're almost at the end of that road. Uh and they're also selling gold as is Japan.
And I'm sorry, Japan has not been selling gold. Japan has been selling Treasury securities to support its currency. It does not want the yen to depreciate below 160. Um well, it's it's kind of below really is above 160. So, that's uh 160 yen to the dollar. So, we've been getting more and more yen per dollar.
It's been trying to hold the line at 160 uh because that's uh where the its economy really in 1989, 1990 started to unravel. The problem is as they sell treasury securities, get dollars, put the dollars out there and buy yen. Um to the extent they cannot control the their currency, their inflation rate is going up and they like the US will have a monetary decision in the middle of June and they may take their interest rate to 1%, which is still lower than where we are at 3.75% for the fed funds rate, but the gap has been narrowing significantly.
So and then you can see the others. Japan is in the purple there and we just got the latest month. They sold 76 billion dollars worth of treasury securities. Wood might pay greater attention to economic innovation and productivity growth rather than only conventional inflation metrics, according to Wood.
This is significant since improved efficiency and new technologies can help cut expenses and naturally lessen inflation. Future economic cycles may not require the Federal Reserve to hike interest rates as forcefully if policy makers begin to recognize this trend. According to Wood, a lot of investors are still concerned about the kinds of policy errors that caused market damage in 2022.
However, the Fed may eventually have more leeway to promote economic expansion if inflation keeps falling due to increased productivity and decreased energy costs. Growth stocks and innovative businesses, which have suffered under high borrowing rates, would probably benefit greatly from that change.
. This economy is moving into boom territory. We've been talking about this for a while. But the markets are plummeting. What the heck is going on? Well, we think we have the answer. I think it has to do with Kevin Warsh, our new Fed chairman, who is not saying anything, at least not yet. And maybe he won't until June 17th, which is when the Fed announces its next interest rate decision.
So we've got roughly 12 days. I do hope he says something in the meantime. He may not. But if I understand who he is, he has much more of a supply-side policy bent. And he does not believe that strong employment and strong growth is bad news. In fact, people who do believe that adhere to something called the Phillips curve.
When growth grows up, they think inflation goes up as well. And that's just not true. In fact, the most vibrant growth periods have been associated with much lower than expected inflation. Why? Because of productivity. And I think the same thing is going to prove true now. But we have a bunch of hawks on the Fed and they may not be talking as much as they did under Chairman Powell.
And I think Kevin Warsh is going to stymie that a bit because it just causes volatility unnecessarily. But they are out there whispering. And so a lot of people are afraid they're going to make another interest rate decision that that is not that is not conducive to growth and lower inflation. And believe it or not, that would be higher interest rates.
Now, we think that where this all will end is a clear understanding. And we'll show you in charts what's going on. It's clear what's going on. Uh that productivity is driving this economy. And that inflation is going to break to the downside. And if the Iran war is settled anytime soon. And we're beginning to see oil prices peak and and come down already.
So, there is that anticipation. Uh that inflation will probably go negative sometime this year. And that will be first of all, the oil price unraveling. Uh but second, the impact of productivity enabling companies to actually lower prices. And we are seeing some companies lower prices. I know I featured here a couple of months ago Frito-Lay, which is owned by Pepsi, cut the price of some of its products by 15%.
Uh and we're hearing other companies like Walmart and Costco saying that they are not passing price increases through as much as one would expect because they are seeing efficiency gains in productivity. Thanks in large part to AI and robotics. Despite the fact that markets have been declining and anxiety is growing, Kathy Wood thinks the economy is actually stronger than most investors currently believe.
According to her, a lot of people are concerned that the Federal Reserve would make the same policy errors it did in 2022 by maintaining excessively high interest rates for an extended period of time. A large portion of the present market volatility is being caused by this uncertainty. Wood contends, however, that the true narrative is taking place beneath the surface.
According to her, emerging technologies like robotics and artificial intelligence are rapidly increasing production. The economy can expand without producing the same level of inflation that people anticipate because to these technologies, which enable businesses to create more while spending less. She also clarifies that it's not always the case that rapid growth inevitably results in increased inflation.
According to her, rising productivity can actually counteract inflationary pressures. Furthermore, declining energy costs may contribute to a quicker than anticipated reduction in inflation. Wood's main argument is that efficiency gains in the real economy, rather than severe interest rate increases, may be the reason why inflation continues to gradually drop.
The Federal Reserve might not need to maintain its aggressive, strict monetary policy if that occurs. This may eventually allow them to support growth once more. .
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