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Don’t Fight the Fed on Its Playing Field, Leave This Losing Battle by Opting for Bitcoin

Don’t Fight the Fed on Its Playing Field, Leave This Losing Battle by Opting for Bitcoin

You will never be able to beat the Fed under the current system.

In the investment world, there is an old and well-known saying that has become a guideline for many people over time. This adage is very simple to remember:

“Don’t fight the Fed”

It is based on a very simple observation.

In today’s monetary and financial system, it is the central banks that set the rules of the game. As the central bank of the world’s leading economic power, the Fed is the one that will dictate the rules of the game in general to all the others.

When the Fed decides to print trillions of dollars out of thin air and lower interest rates to zero, most other central banks will follow suit. In this way, the Fed exports U.S. dollar inflation. This is one of the exorbitant privileges that the U.S. dollar confers on the United States.

The Fed’s monetary policy has huge impacts on the financial markets

In terms of the investment world, this adage means that you have to take into account the Fed’s monetary policy decisions if you want to make money.

You may decide to take a chance by ignoring the Fed’s actions, but your chances of making money by investing will be more than slim.

Usually, when the Fed is going to lower interest rates, the “Don’t fight the Fed” policy invites you to buy stocks. When the Fed is going to raise interest rates, you should avoid the stock market instead.

This year 2020 confirms perfectly once again that it is useless to try to fight the Fed. Amid the liquidity crisis of March 2020, the Fed took three major decisions in terms of monetary policy:

Program of unlimited quantitative easing. Lowering of interest rates to zero. Lowering to zero of the reserve requirement rate for U.S. banks. Fed’s decisions have pushed investors into the stock market

Faced with these decisions, it became clear that the U.S....

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