Analysts say a wave of Fed rate hikes could cause a “flash crash” in the bond market or “blow up the Treasury”

Harris Kupperman, founder of hedge fund Praetorian Capital, believes the Fed’s rate hike assault could very well “blow up the Treasury“. Furthermore, amidst the gloomy macro trends, Fluid Finance’s Director of Marketing Jessica Walker says the failing economy and faltering fiat currencies are revealing the true benefits of crypto-currencies.

Praetorian’s Harris Kupperman says a barrage of Fed rate hikes could end up “blowing up the Treasury.”

This week a number of analysts who believe the U.S. central bank will codify another three-quarter point increase in the federal funds rate (FFR) at the November meeting. On October 18, Praetorian Capital hedge fund founder Harris Kupperman published an op-ed arguing that a “avalanche is on the move“as he believes the Fed is currently trapped and, despite its tough talk, will have to pivot on raising the FFR.

Kupperman also argued on the podcast “Forward Guidance” when he detailed that the Fed will have a very difficult time dealing with another oil spike. The founder of Praetorian Capital and chief adventurer of Adventures in Capitalism argued on the podcast that the Fed will have to pivot and accept high inflation as today’s reality. In the report released Oct. 18, Kupperman notes that continued rate hikes targeting a rate of 4.6 percent or higher could lead to “blow up the Treasury.“

J. Kim insists that the “financial weapons of mass destruction of 2008” still exist and that if the Fed rebels, the U.S. central bank could “create illiquidity in the world’s largest bond market.”

In addition, J. Kim of skwealthacademy substack explains in a recent blog post that the forgotten financial weapons of mass destruction of 2008 are still a problem in 2022. Kim adds that he believes that a “flash crash of the U.S. Treasury bond market is inevitable under these market conditions. Speaking of financial weapons of mass destruction, Kim details how the perception of a massive decline in global derivatives since 2008 is an illusion.

Kim’s article adds:

If one assumes that bankers have reduced their positions in these extremely risky products that can collapse like a domino procession if a major bank defaults on a major category of these derivatives, one is wrong.

Kim’s blog post explains that it is possible that the U.S. central bank has gone rogue and, like Kupperman’s position, this could cause havoc in the bond market.

“While the ECB seems to be keeping its end of the bargain by not imploding this critical derivative market, US central bankers have not“, Kim’s blog notes. “If the Fed really does play dirty by continuing to drive up the strength of the USD against all other major global fiat currencies, not only will it possibly create a liquidity crunch in the world’s largest bond market, US Treasuries, but it could also cause massive defaults in the USD-denominated interest rate derivatives market.“

Fluid Finance’s CMO says the failure of fiat currencies and the sluggish economy highlight the benefits of diversifying and decentralizing crypto-currencies.

Meanwhile, Jessica Walker, Fluid Finance’s director of marketing, told Kitco News anchor and producer David Lin that diversification and options like crypto-currencies shine during these macro trends. “There’s a huge concern right now about the security of people’s own fiat currency, and their own country’s coin“, Walker told Lin at the Future Blockchain Summit in Dubai. “Being able to diversify and have options other than fiat is really important now, more than ever, with so much geopolitical uncertainty.“

Walker also spoke about the Canadian truckers’ protest against the vaccination mandates earlier this year. At the time, the fundraising platform Gofundme blocked Ottawa’s Freedom Convoy from receiving donations. At the time, banks froze bank accounts and Canadian Prime Minister Justin Trudeau invoked emergency legislation to deal with the protests. “It was a pretty scary time, and if anything, it was a plea for decentralization“, Walker said Friday. “That’s why we need bitcoin. That’s why we need currencies that governments can’t control“, said the Fluid Finance executive.

In terms of diversification, Walker believes in bitcoin, ethereum and a few other blockchain projects. “I invest on average dollars in bitcoin, ethereum, and then I look at the projects I really believe in“, said Walker. told the Kitco host on Friday.