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FISCAL AND MONETARY DIVERGENCE

This post discusses the divergence between U.S. fiscal and monetary policies and their impact on different parts of the economy. In recent years, the U.S. experienced a shift from monetary to fiscal dominance, impacting inflation, bond markets, and liquidity. The Fed's aggressive rate hikes to combat inflation contrasted with the Treasury's liquidity-boosting measures, leading to a complex macroeconomic environment. These actions affected financial markets and the broader economy, highlighting the significant impact of centralized fiscal and monetary policies. This divergence is expected to continue, with fiscal policy likely remaining dominant in the 2020s and 2030s, influencing U.S. GDP growth and the performance of various asset classes, including crypto.

RETHINKING LIGHTNING

The Bitcoin community's enthusiasm for the Lightning Network has waned due to its complexity and reliance on custodial wallets. The Lightning Network faces key issues like channel liquidity and the inability to receive challenges offline. Mutiny Wallet aims to improve this by integrating fedimint technology, offering a more user-friendly, self-custodial solution that can dynamically share ownership of UTXOs and interoperate with Lightning. It represents the current best approach to scaling Bitcoin.

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