🎈Inflation Stops. Why You’re Still Hurting… 🤕
😢 Could our current economic woes be the perfect storm for crypto? ⛈
Inflation. It’s how your ego provides you with self-confidence and it’s the most important force behind the Macy’s Thanksgiving Day Parade.
Without inflation, how would a hundred-foot-tall Kung Fu Panda awe and terrify children?
We’ll go on record, we like inflation. But when it comes to economic inflation, we’ll take a pass.
And yes, inflation has stopped, but it’s still pretty high and things still feel bad.
But could these current economic conditions be the perfect setting for a crypto surge?
☕️ Altman Ousted
Sam Altman, the founder of OpenAI, has been removed as both CEO and from the board of the company he started.
"Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities," reads a blog post from the board of OpenAI.
After the news of Altman’s departure went public, Worldcoin (WLD), the token for Altman’s eye-scanning crypto project, dropped 12%.
Chief Technology Officer Mira Murati has been placed as interim CEO while OpenAI searches for Altman’s replacement.
Currently, the top three candidates for permanent CEO of OpenAI are a Rumba, the Netflix algorithm, and a smoke detector that needs its batteries replaced.
☕️ Ramaswamy’s Crypto Policy
On the Republican debate stage, presidential hopeful Vivek Ramaswamy quickly distinguished himself as a Trump-style disruptor.
But Ramaswamy has also set himself apart from the other Republican candidates… as the only one with a comprehensive crypto policy.
Ramaswamy aims to protect the core tenants of crypto by reducing the federal regulatory workforce, and he wasn’t afraid to fire off against current regulators during the Messari Mainnet conference in New York.
"Ambiguity is the friend of the tyrant," said Ramaswamy, adding "The good news is this is something that a U.S. president can fix."
“Sic Semper Ambiguity!” screamed John Wilkes Booth, who was not scheduled to speak at the conference.
☕️ Smokeless Snoop?
Snoop Dogg, the famous rapper and crypto enthusiast, shocked the world last week by announcing that he was quitting smoking.
I’m giving up smoke.
— Snoop Dogg (@SnoopDogg)
Nov 16, 2023
Yes, at 52 years old, Snoop is finally growing up and ditching the blunts. But not everyone’s so sure he’ll stick with it, and some degens decided to make it interesting.
According to betting on the crypto predictions platform, Polymarket, 73% of wagers believe that Snoop will stay smokeless.
We just can’t help but admire Snoop’s craftiness, by strictly giving up smoking, he can stay true to his family and his doctors while still getting wrecked on edibles every single day.
With CPI cooling to 3.2% YoY, it’s now widely accepted that the Fed’s historic interest rate hikes have come to a stop, with some speculating significant cuts as soon as next year.
Markets rallied on this news.
— InTheMoney (@InTheMoneyAdam)
Nov 14, 2023
Do you think the Federal Reserve will lower interest rates by Q1 2024? 🏛
Spilling the Beans
Inflation Stops. Why You’re Still Hurting… 🤕
It’s no secret that America has an inflation problem.
You look around and there’s evidence everywhere.
Gas prices are creeping back up and a single box of cereal from the grocery store is steadily rising to the price of a 2011 Chipotle burrito.
But don’t fret, we’ve technically got some good news.
Inflation reports for October were better than everyone hoped, with the Consumer Price Index (CPI) remaining flat instead of the .1% increase that economists anticipated.
So yes, inflation has paused, but it’s still a little high, above the Fed’s ideal 2%. And the core CPI has remained above 4% for the past several months.
And how did those levels get so high?
Well, there are several macro factors to consider. There’s the economic strain of the war in Ukraine coupled with the cost of American support to Israel in the developing conflict in the Middle East.
And even without America’s responsibilities as an international peacekeeper, we’re dealing with our own case of long COVID as the country continues to grapple with the long-term effects of the global pandemic on the supply chain.
Not to mention that $33.7 trillion in national debt that’s hanging over our country’s head like the sword of Damocles.
But all that aside, we’re actually in a pretty good spot and headed for disinflation.
US October CPI: core inflation up 0.2% m/m and 4% y/y. Core goods actually declined .02 on the month. Expect more disinflation moving forward especially as shelter costs ease into mid 2024. This is good news folks.
— Joseph Brusuelas (@joebrusuelas)
Nov 14, 2023
And as soon as the news about the October CPI hit the market, Bitcoin popped up 1% to $36,700.
Now, with the flat CPI, there’s a decent chance that the next Fed rate hike will be the last for some time.
But this means that yields will decrease, the economy will slow down, and most traditional investments will sort of… stagnate.
And where will bored investors turn for that next hit of financial dopamine?
You guessed it. Crypto.
Yes, Bitcoin has a reputation as an inflation hedge, but that doesn’t mean that it’s out of the game when inflation declines.
Quite the contrary, Bitcoin is just revving its engine waiting to race to the top.
And the fuel in Bitcoin’s tank is both the enthusiasm surrounding the impending ETF applications as well as the almost certain price hike we’ll see at this April’s Bitcoin halving.
Yes, 2024 could very well be crypto’s year.
Fed rate hikes aside, the only inflation we’re thinking about is the warm feelings of DeFi hope ballooning in our chests.
Consumer Price Index: This is the measure of the average change over time in the weighted average of consumer goods and services purchased by households and urban consumers.
This is different from the “Core CPI” which measures those same purchasing habits but does not account for spending on food or energy consumption.
The Last Sip
The Last Sip: If OpenAI can’t pick between the Rumba, the Netflix algorithm, or the smoke detector that so desperately needs that new AA, the board will be forced to go with the default choice for CEO: the ornery ghost of John Wilkes Booth.
Coffee & Crypto Team
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