Time flies, and in the blink of an eye, we’ve reached the last day of the first half of 2024, June 30th. Tomorrow, with the arrival of July 1st, the curtain will slowly rise on the second half of the year.
Summer 2024, like summer 2020, is scorching hot. However, unlike 2020’s “DeFi Summer,” 2024 seems to have nothing. Even on Ethereum, gas fees have dropped unbelievably low to 1 gwei, akin to a popular restaurant suddenly devoid of its usual queues, as if diners had collectively vanished to escape the sweltering heat.
Project teams and crypto funds resemble lazy dogs, lounging in the shadows of buildings or under the shade of large trees, tongues lolling out lazily in the oppressive heat. The weather is hot, the market is cold, and for traders facing losses, the feeling is chilling indeed.
A viral video blogger surprisingly defends the Federal Reserve, criticizing claims that U.S. dollar capital is exploiting the Fed’s artificial dollar circulation cycles to harvest global wealth. This behavior puzzles many. Supporting the Fed’s “nobility” is mainstream consensus on the grand stage, backed not only by countless Nobel laureates, academic papers, theoretical books, and school textbooks but also sustained by a system that would have ousted the Fed long ago if not for such support. So why the need for an obscure blogger to fan the flames?
In reality, what’s commonly referred to as “harvesting” isn’t some clandestine act but rather the Fed’s open and legitimate strategy of resource allocation optimization, termed academically as “capital optimization.” In financial markets, the purpose is not to create value but to optimize the allocation of resources or capital.
Simply put, according to Coase’s theorem, capital naturally flows to those who can increase its value most effectively. For small retail investors dreaming of wealth accumulation with meager capital and lacking insider information or the authority to print money, entering the financial markets often results in substantial losses. They cry foul, feeling “harvested,” yet according to Nobel laureates, their capital has merely been “optimized” by the financial market—flowing to those with the capability to maximize its growth.
If you study finance, you learn that the significance of financial markets lies in the “optimization” of capital. Engage in finance, and you’ll experience firsthand how your capital can be “optimized away.” Replace the refined term “optimization” with the blunt term “harvesting,” and the meaning remains unchanged.
This morning, Liu Jiaolian spent considerable time in his June 30th internal reference [Reflection on the U.S. Dollar Index and BTC Trends: Who Plans to Win Without Fighting?], delving into the U.S. dollar index and BTC trends over the past year to highlight the Federal Reserve’s persistence in raising interest rates, despite external pressures, asserting its hawkish stance. Could this be for global capital “optimization,” or is there room for charitable intentions towards the lower echelons of society?
Perhaps Fed Chairman Powell understands better than anyone that success in this endeavor could secure his place in history, while failure could mark him as a villain, unable to deliver results to his superiors and potentially tarnishing his legacy forever.
(WeChat Official Account: Liu Jiaolian. Knowledge Planet: Reply “Planet” to the official account.)
(Disclaimer: This content does not constitute investment advice. Cryptocurrencies are highly risky assets with the potential to lose all value. Please participate cautiously and take personal responsibility.)
Tags:
Ethereum
Liu Jiaolian
Investment Insights
Bitcoin
Source Link:
https://mp.weixin.qq.com/s/T2w-5oojt0aisZMoRGk79Q
Note: Republishing this article represents the author’s viewpoint and does not constitute investment advice.
Original Article Link:
https://www.bitpush.news/articles/6912745
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