Arthur Hayes sends harsh warning on Fed's non-stop money printing

Core Viewpoint - Arthur Hayes believes the U.S. Federal Reserve is preparing to adopt yield curve control, which involves fixing interest rates on government bonds by purchasing unlimited amounts of debt [1][5]. Group 1: Yield Curve Control - Yield curve control is defined as a policy where a central bank fixes the rate on government bonds [1]. - The Federal Reserve may expand its balance sheet by purchasing government bonds until bond prices rise and yields fall to a predetermined level [2]. - The Bank of Japan has successfully implemented this approach for nearly two decades, capping rates at desired levels [2]. Group 2: Federal Reserve's Third Mandate - Hayes indicates that the Federal Reserve is signaling a potential move towards yield curve control through discussions of a "third mandate" in the Federal Reserve Act of 1913, which aims to maintain moderate government bond levels [5]. - The interpretation of what constitutes "moderate levels" is left ambiguous, allowing for flexibility in implementation [5]. Group 3: Political Influence - Former President Trump is cited as advocating for low government bond yields and increased money supply to stimulate the economy, which aligns with the potential for yield curve control [6]. Group 4: Impact on Cryptocurrency - Hayes predicts that the adoption of yield curve control will likely lead to an increase in the value of Bitcoin and other digital assets, as these assets tend to perform well when credit expands [7]. - The comparison is made to the 2008 financial crisis, suggesting that similar monetary policies could lead to significant upward movements in Bitcoin prices [8].