Fed vs Trump: What 1929 and 1980 Teach Crypto Holders Today

97 years ago today, on October 28th, 1929, the Dow Jones fell almost 13% in a single day. Over the next 3 years, it fell 89%. A third of America's banks closed their doors. And one of the most famous economists who ever lived spent his career proving who was to blame. Not the speculators, not [music] the banks, the Federal Reserve.

It was produced, the Great Depression was produced by a failure of government, by a failure of monetary policy. It was produced by a failure of the Federal Reserve system to act in accordance with the intentions of those who established it. It was produced by a failure of the Federal Reserve system.

Today, on the same date, Donald Trump is at war with his own Fed chair. The 30-year Treasury yield just touched its highest level since 2002. And in a few hours, the Fed makes its last rate decision before the midterms. Today's Fed meeting is not a normal one. Trump picked Kevin Worsh to run the Fed.

Then Worse raised rates. Now Donald Trump says Worsh doesn't even have the votes. Bond yields are at a 24-year high. And a lot of smart people are saying the words Great Depression out loud. So in this video, we're going back to 1929 and even 1980, the two times the Fed broke the economy.

And we're putting those charts right next to today's. Then I'll show you what it means for Bitcoin and XRP in the rest of the crypto market and what I'm doing about it. So stay all the way to the end because this lesson changes how you look at your crypto portfolio. Let's run it. Here's where things stand this morning.

The Fed's key rate sits at 3.75 to 4%. 6 weeks ago on September 16th, the Fed did something it hadn't done in three years. It raised rates. It was the first hike under the new chair Kevin Worsh. Why?

Because inflation came back. Prices rose 3.7% in the year to September. Producer prices, what businesses pay, are up 6.3%. And oil, Brent crude, pushed past $116 a barrel last week. So, what does the market expect today?

Well, according to the CME Fed Watch tool, about 90% odds that the Fed holds and about 10% odds of another rate hike. And in a Reuters poll, 94 out of 100 economists expect to hold today. All 100 expect a hike in December. On the prediction market Koshi, traders put the odds of another hike before the end of the year at 84%. The Kobesi letter calls it a hawkish pause.

Hold today and set up a hike in December. And that's the problem for one man in particular. Donald Trump says rates should be 1% or lower. He's called the Fed board very hostile and very political. He told Worsh, "You might as well vote with the board." [music] In an interview with Time on October 1st, he said Kevin Worsh should have voted against the hike.

On October 7th, he went even further, saying the board would like to see the country do badly, and now he says Worsh doesn't have the votes. Think about how strange that is. Donald Trump picked Kevin Worsh. Worse was supposed to be the chair who would finally cut rates. Instead, the first big move of his term was a rate hike.

Donald Trump wants cheap money six days before the midterms. The Fed is looking at 3.7% inflation. Insane not yet. In this fight, the White House against the Fed. It's not new.

It happened before. And the last two times it got this loud, the outcome shaped the next decade. And we'll get there in a little bit. And what's about to happen first, the part of the story most people skip, the bond market. Here's a simple version of how bonds work.

When the US government needs money, it borrows by selling bonds. The yield is the interest it has to pay. When yields go up, borrowing gets more expensive. And for the government, for your mortgage, for every business with a loan, on October 6th and 7th, the 30-year Treasury yield hit about 5.67%. That's the highest since 2002.

The 10-year sits near 5%. And that matters because the Fed only controls short-term rates. The long end is set by the market. When the market demands more interest to lend to America for 30 years, it's telling you it's worried about inflation, about the debt, or both. Some traders are sounding the alarm, too.

QMO Crypto put it this way. Inflation is at 3.7%. Energy is up. So, will the Fed print money to rescue markets under those conditions? His answer is, history says no.

Not until something breaks first. and he points to 2008 when everyone expected a rescue and Lehman Brothers was allowed to fail. Now, let's look at another claim going around. A viral post says China is dumping more than hundred billion dollars of US treasuries, its biggest sell-off since 2007 while piling into gold. And here's what the official data is actually showing. According to the US Treasury, China held $590 billion of treasuries in August.

A year earlier, it held 700 billion. So yes, that's about $109 billion less in a single year. Part of that may be bonds moved to accounts in other countries like Belgium. In total foreign holdings actually went up to about 9.25 trillion. So this is not the whole world dumping America here, but China, the second largest foreign holder, is stepping back.

And it's gold. China's central bank reports a record 2346 tons. Fewer dollars, more [music] gold. So remember that pattern because the last time the world lost faith in paper money, gold went from $35 an ounce to $850. Now that was 1980.

But to understand 1980, we have to start back in 1929. Bravos Research points out something worth seeing. Since the Fed was created, there have been liquidity crisises back in 1929, 1974, 1987, 2001, 2008, and 2020. different causes every single time. One thing in common, money dried up. And the first and worst was 1929.

The 1920s were a party. New cars, radios, electricity in every home. Stocks only went up and ordinary people bought them with borrowed money. By 1928, the Fed was worried, so it raised rates. In August of 1929, the New York Fed raised its rate by 6%.

[music]

On September 3rd, 1929, the Dow peaked at 381. Then came Black Thursday. Then Black Monday, 97 years ago today. Then Black Tuesday. In a single week, the market lost about a quarter of its value.

But here's the part most people don't know. The crash was not the Great Depression. In early 1930, the market bounced almost 50%. Many people thought the worst was over. What turned a crash into a depression came after.

By July of 1932, the Dow was at 41, down 89% from the top. Unemployment hit about 25%. Thousands of banks failed. People lined up for bread. And for 30 years, the story was the greedy businessman and wild speculation caused it.

Then in 1963, Milton Friedman and Anna Schwarz published a book that changed the story forever. They showed that the money supply in America fell by about a third, and they showed the Fed let it happen. But as an objective scholar, I can tell you what the facts are. The facts were that from 1929 to 1933, the total quantity of money in the United States, the amount of currency, the amount of bank deposits, what Mr. Eckles referred to as M2, that total amount of money declined by 1/3.

The total number of banks went down by 1/3. And why did the quantity of money decline? It declined because the Federal Reserve system failed to prevent the decline. The Federal Reserve system could have prevented the decline at all times. There never was a moment during that period when the Federal Reserve did not have the power to prevent the decline in the quantity of money.

If it had prevented the decline in the quantity of money, you might still have had a recession, but it would have been a garden variety recession. It would have been over in the middle of 1930 or early in 31 at the latest. It would not have been the major catastrophe, not only for this country, but throughout the rest of the world. Listen to that again. A garden variety recession.

That's what Freriedman believed 1929 should have been. The Fed had the power to stop the bank runs. It had been created in 1913 for exactly that reason and it didn't. And this isn't just one economist opinion anymore. In 2002, at Freriedman's 90th birthday, a Fed governor named Ben Bernaki stood up and said this.

The Fed admitted it. 6 years later, Bernaki was running the Fed during 2008, and he did the opposite of 1929. He flooded the system with money. But Freeman had already warned about the other way the Fed can fail. The Federal Reserve will not fail in the same way again.

This time it will fail in a different way. This time it has been failing not by producing a great depression but by producing an inflation. Because just as you will hear the story that it was business that was responsible for the depression, so you will today hear the story that it is labor and management that are responsible for inflation. It is the same kind of a myth. Inflation is made in one place and one place only.

Washington DC. Freeman was talking about the 1970s. 10 years of rising prices. By March of 1980, inflation hit 14.8%. A dollar lost about a seventh of its value.

Every year, gold went from $35 to over 850. [music] In August of 1979, President Carter picked a 6'7 Fed chair named Paul Vulkar. And on Saturday, October 6th, 1979, Vulkar called a surprise press conference. Wall Street called it the Saturday Night Special. The Fed would stop managing interest rates and choke off the money supply instead, whatever it took. The Fed's rate went to about 20%.

Mortgage rates went near 18. The 30-year Treasury yield hit 15.21% [music] in October of 1981. That's still the record. Today, it's around 5 1/2. So, when you hear that bond yields are at a 24-year high, remember how high they've been [music] in the past.

And the pain was real. Two recessions back to back. Unemployment hit 10.8% in late 1982. Homebuilders mailed 2x4s to the Fed in protest. Car dealers mailed in the keys of cars they couldn't sell.

Farmers drove tractors to the Fed's front door. Stocks fell 27% and through all of it, Vulkar kept going with the president mostly standing behind him. Then inflation broke and in August of 1982, one of the longest bull markets in history began. So here's the two lessons that you need to know in this video. In 1929, the Fed held money too tight while the system was breaking and a crash became a depression.

In 1980, the Fed held money tight on purpose, took the pain and killed inflation. Same tool, opposite result. The difference was timing in whether the Fed was fighting the right problem. Now look at today. Inflation is 3.7% and rising.

The Fed is hiking and the president is demanding rates at 1%. So which history is this? 1929, 1980, or something completely different. This is the S&P 500 on a log scale. Almost 100 years of it.

Watch the crashes light up here. 1929 down 86%. 1973 and 1974, down 48%. 1987 down 34% in a few months, including the worst single day in history. The.com bust [music] down 49, 2008 down 57% and 2020 down 34% in about a month.

Every one of those had a Fed story behind it. And every single one ended. The market came back and went to new highs, but some took months and one took 25 years. Some traders are lining up past bubbles next to today's AI stocks. The Nifty50 in 1972, Japan in 1989 when the land under the Imperial Palace was said to be worth more than all of California, the do-com bubble in 2000.

One viral post even drew a chart of an AI crash that hasn't happened yet. Now, there's no point in showing that one because nobody knows the future of when the crash will happen. What we can show you is where the S&P is right now. The S&P closed at a record 7,818 on October 6th. As of last week, it was about 2 and a half% below that.

Not a crash, not yet anything like the boxes on the chart. But the ingredients people are worried about are on the table right now. High yields, rising inflation, oil spiking, and a Fed that says it won't rescue markets. Some even go back to this. In 1875, an Ohio farmer named Samuel Benner published a chart of good times and hard times based on the price of pig iron, corn, and hogs.

People still pass it around 150 years later. It's a fun piece of history. It's not a crystal ball here, but it shows you times of good times, bad times, and depressions. [music] It's interesting to take note of. So, a second great depression. Well, a lot of people are using those words.

One post with Freriedman's clip from Stern Drew Crypto claims the 1929 crash was engineered and that it's happening again, but it's bigger this time. It claims banks have found rogue AI agents inside customer accounts and that the system will be crashed on purpose to bring in a new stable coin system. Now, that would be crazy if that happens. But here's what's real. The Genius Act signed in July of 2025, created the first US law for stable coins.

Big banks and payment companies are building on it. A new financial plumbing is being laid right now under our feet. And Freriedman's actual lesson isn't that crashes are planned. It's that the Fed's choices decide whether a crash stays a recession or becomes a depression. That's why today's meeting matters.

So, [music] where does crypto fit in? Well, Coin Bureau tracked what Bitcoin did after each Fed meeting this year. After September 16th, a 16% rally. After July 29th, 31%. After July 17th, a 13% drop.

After April 29th, up 11%. Three ups, one down. past moves, not a promise of the next one, but Bitcoin is sitting near $80,000. The analyst, Dr. Profit, points out that this is roughly where Bitcoin treasury companies and the spot ETFs bought on average around 80 to $81.5,000. So, in [music] other words, the big buyers are right around break even.

And for a reminder for how fast sentiment can flip, last November, Bitcoin had a death cross. when the 50-day average falls under the 200 day. Benjamin Cowan noted that that past death cross had marked local lows and that if the cycle was over, the rally after would fail. Bitcoin went from 126,000 down to the 60s and back to the 80s. Same same coin, wildly different headlines along the way. [music] And XRP is trading around $130. And here's where history lessons come back.

In 1929, people who had money sitting in the wrong bank lost it. In 1980, people who had cash sitting idle lost a seventh of it to inflation every year, while people who understood what the Fed was doing put their money where it earned 15% in Treasury bills. Two different crisises, same lesson. [music] The people who did best weren't the ones who guessed when the crash would happen. They were the ones who understood the system and made their money work for them instead of just sitting there idle doing nothing. And that's why I want to show you something powerful here.

Most XRP holders do that. They just hold. The coins sit in a wallet doing nothing while the Fed, the bond market, and the White House fight over what your dollars are worth. Now, there are ways to put your XRP to work. And I made a free walkthrough that shows you exactly how it works step by step, including all of the risks, so you can decide for yourself.

The link is the first thing in the description. No hype, [music] just how it works. Whatever the Fed does today, I'd rather understand the system than be surprised by it. In 1929, the Fed said it did everything right. In 2002, it admitted that it didn't.

Today, Kevin Worsh has to choose between the White House and the inflation numbers. Which history do you think this is? 1929, 1980, or something completely different? Let us know in the comments. Now, as always, this is not financial advice.

Crypto's risky. You can lose money in these markets if you don't know what you're doing. That's why we created a private intelligence network with the smartest researchers in the crypto market to help educate you to maximize your upside and minimize your downside in this crypto market. Results aren't typical, so don't be typical. I'll see you on the next video.

I'll see you at the top. As always, you know what to [music] do. Stay bullish.