BREAKDOWN: Lyn Alden on Bitcoin, Inflation and the Potential Coming Energy Shock
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 22 June 2021
⏱️ 57 minutes
🧾️ Download transcript
Summary
One of the top minds in macro explores the key debates shaping the economic landscape.
This episode is sponsored by Nexo.io and Circle.
Lyn Alden, investment researcher and strategist with a keen eye on both crypto and traditional markets, joins NLW on today’s “The Breakdown.” Listen for a conversation about the state of the market and projections for the future including:
- Inflation: base effects and transitory in nature or here to stay?
- Foreign debt markets tapering off
- The Lightning Network and predictions for the success of El Salvador
Inflation at a high number, 5%, leaves investors and market observers jumpy. On top of that, many have a hard time believing the U.S. Federal Reserve’s narrative for inflation as outlined in the recent FOMC meeting. How is this inflation different from previous spikes?
The foreign sector has historically been a large buyer of Treasurys in structural trade deficits. In 2013, China stepped away from this practice and started investing in its own infrastructure and in other regions across the world. Even if other countries continue to invest in U.S. assets, it is increasingly in hard assets like stocks or real estate. Will the dollar weaken as the Fed is forced to be the primary buyer of U.S. Treasurys?
El Salvador’s commitment to bitcoin as legal tender is one thing, but what will the reality of this new currency look like? Bitcoin’s Lightning Network provides easy access and transaction speeds, so long as enough of the general population has access to smartphones.
Lastly, with the public’s attention captured by the current inflationary moment, what market features are getting underreported? Tune in to hear Alden’s perspective on what will have an unexpected impact in the upcoming cycles, including the potential for a significant energy shock in the years to come.
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Transcript
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| 0:49.3 | Basically, with debt levels as high as they are and with treasury issuance as high as it is, |
| 0:53.9 | it's pretty |
| 0:54.5 | challenging for the Fed to normalize industry rates without crashing the markets. And so they kind of |
| 0:59.3 | find themselves where they can either let the trade stay low and let these spikes of inflation |
| 1:04.0 | basically devalue cash and debt to a significant degree, or they can try to raise rates and |
| 1:09.8 | taper to combat that, but then they risk pulling |
| 1:12.2 | down asset valuations across the board. And because the market is so financialized, if asset |
| 1:17.6 | prices have a significant fall and stay there, that actually circles back and results in |
| 1:21.7 | slower economic growth, like the tail wagging the dog rather than the way around. |
| 1:27.4 | Welcome back to The Breakdown with me, NLW. |
| 1:31.5 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
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