Why the Fed Keeps Denying Its Role in Increasing Inequality

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 12 June 2020

⏱️ 27 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today on the Brief: Three Arrows holds more than 6% of Grayscale Bitcoin Trust New platform for censorship-resistant blogging Coinbase announces new token potentials as anti-surveillance hodlers flood out Today’s main topic: Why the Fed keeps denying its role in inequality Some key takeaways from yesterday’s Federal Open Markets Committee meeting: Interest rates are likely to stay near zero through 2022 Unemployment anticipated to average between 9% and 10% during last three months of 2020 Economy expected to contract 4% to 10% this year No specific discussion of yield curve control Inflation expected to be 1.0% this year and 1.5% in 2021, lower than Fed target of 2% According to Chairman Powell, inequality has nothing to do with Fed policy On this episode, NLW recaps the above and dives deeper on two of the points: Net inflation stats gloss over specifics, including food prices that have been rising at an annual rate of 17.5% The Fed’s pronounced role in exacerbating inequality by propping up artificially high asset prices, effectively locking low and middle income households out of the mechanism for economic advancement

Transcript

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0:00.0	Welcome back to the breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond.
0:13.0	This episode is sponsored by BitStamp and Cipher Trace. The breakdown is produced and distributed by CoinDesk.
0:22.6	And now, here's your host, NLW.
0:27.9	Welcome back to The Breakdown.
0:29.9	It is Thursday, June 11th.
0:31.6	And today, our main theme is going to be a recap of the Federal Reserve's FOMC meeting from yesterday, what it means for
0:38.7	the economy, and some specific focus on their continued assertion that there is no relationship,
0:44.4	no correlation between Fed policy and inequality, which, as you might imagine, I have a very
0:49.5	hard time buying. But first, let's start with the brief. First up on the brief, three arrows in
0:56.3	gray scale Bitcoin Trust. So what's the news? Based on a regulatory filing requirement in the
1:02.2	U.S., we have discovered that three arrows, which is a Singapore-based investment firm,
1:06.6	holds more than 6% of the gray scale Bitcoin Trust, which holds in total something like
1:12.1	$3.6 billion in Bitcoin. Of that, three arrows stake is worth $192 million approximately.
1:19.8	Why does this matter? Well, there's a couple reasons. First is that Grayscale's Bitcoin
1:24.0	Trust is one of the most important institutional Bitcoin actors in the space.
1:28.2	It is the on-ramp for a huge number of people who are getting exposure to the space for the
1:32.1	first time. So understanding who actually holds those assets and who is interested in new
1:37.2	Bitcoin that comes into the trust is actually very important. Secondly, it suggests, and I think
1:42.0	that a lot of people felt this way, that Three Arrow's is
1:44.7	operating at a scale much bigger than we might have assumed. There are many of us who just kind
1:48.8	of knew them from their great posts online or on Uncommon Core, which is a collaboration
1:54.1	between one of Three Arrow's founders and Hasu, who's an independent researcher. They're
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