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Location: New York
Date: Wednesday 8th December
Project: lynalden.com
Role: Macroeconomist

These are strange times. The US Dollar’s established role as the global reserve currency is under threat from competing powers, most notably China. However, at the same time, Bitcoin, a nascent and denigrated decentralized digital asset, has grown so rapidly it is now being seriously considered as a potential competitor to all nation-state currencies.

The dominant international role of the US Dollar wasn’t inevitable; it was the result of deliberate and coordinated efforts to ensure it replaced gold as the backstop for global economic activity. These measures have had relatively short term benefits for some powerful groups within society but at the expense of the cohesion of the US nation-state and geopolitical freedoms.

Inevitably “all pegs break”, and thus, due to various factors, the US dollar is coming under increasing pressure: declining international interest in taking on US debt; increasing geopolitical competition; and domestic fatigue with the unequal societal consequences of having monetary dominance. 

Yet, instead of a new nation-state currency replacing the US Dollar, Bitcoin has the potential to be a viable hard money replacement. 

The currencies of the world are in flux. 

In this interview, I talk to macroeconomist and investment strategist Lyn Alden. We discuss currency wars, positive and negative consequences for the US having a global reserve currency, the consolidation of global currencies and whether Bitcoin can become an alternative reserve currency.

00:03:36: Introductions
00:04:58: Understanding the current monetary system
00:06:44: The failure of the gold standard
00:13:20: Collapse of manufacturing in the US
00:16:50: The failing petrodollar and global de-dollarisation
00:23:31: China's force in the global financial market
00:31:57: Imperialism - China vs The West
00:34:53: China's CBDC and political leadership
00:47:12: Currency consolidations and stablecoins
00:49:49: Bitcoin geopolitically strengthens the US
00:52:11: CBDCs at risk from technical issues
00:54:59: Bitcoin incentivised for everyone
01:02:29: Proof of work versus proof of stake
01:07:04: Looking ahead to 2022
01:09:39: Final comments

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Mentioned in the interview:

• Balaji Srinivasan (@balajis)

• Currency war

• Rube Goldberg machine

• Alex Gladstein - Bitcoin Magazine articles

• Petrodollars

• Gold standard 

• 100 years ago, Henry Ford proposed ‘energy currency’ to replace gold

• Bretton Woods systems

• Money: De Gaulle v. the Dollar

• “All pegs break” - When Volatility and Debt Collide

• President Nixon: The Man Who Sold the World Fiat Money

• The Untold Story Behind Saudi Arabia’s 41-Year U.S. Debt Secret

• ENCORE: Luke Gromen on the History and (Declining) Future of the Global Dollar System

• Exorbitant privilege

• United States balance of trade

• How The Triffin Dilemma Affects Currencies

• Russia, India abandon US dollar in mutual settlements

• The Fraying of the US Global Currency Reserve System - Lyn Alden

• China and Russia announced a joint pledge to push back against dollar hegemony

• Putin’s Pledge to Ditch the Dollar Is Slowly Becoming a Reality

• Russia for First Time Holds More Gold Than U.S. Dollars in $583 Billion Reserves

• How Disastrous Would Disconnection From SWIFT Be for Russia?

• Visa and MasterCard are not accepted in Iran

• INSTEX

• Middle income trap

• China is building up its ability to weaponize trade, new report says

• Belt and Road Initiative

• Who Owns the U.S. National Debt?

• With its ‘Global Gateway’, EU tries to compete with China’s Belt and Road Initiative

• BHP completes first blockchain iron ore trade with China's Baosteel

• Central bank digital currencies are a long way from becoming reality — unless you’re in China

• Watch China Overtake The US As The World’s Major Trading Partner

• China’s millionaires are making housing rates in Canada, Australia and New Zealand go through the roof as Jinping cracks down on private sector

• China’s Energy Crisis Deepens With Potentially Fatal Consequences

• 2018–2021 Turkish currency and debt crisis

• Austin Hill (@austinhill)

• The Fed’s system that allows banks to send money back and forth went down for several hours

• Bitcoin Law - El Salvador

• The Denationalization of Money - Friedrich Hayek

• Sovereign Individual: Mastering the Transition to the Information Age - Davidson and Rees-Mogg

• Russian Opposition Finds Refuge in Bitcoin

• Nigerian Banks Shut Them Out, so These Activists Are Using Bitcoin to Battle Police Brutality

• Freedom in the World 2021 - Democracy under Siege

• Proof-of-Stake and Stablecoins: A Blockchain Centralization Dilemma - Lyn Alden

• What is the Fed taper? An economist explains how the Federal Reserve withdraws stimulus from the economy

• Bitcoin's Taproot Upgrade: What You Should Know

• Lightning Network

Other Relevant WBD Podcasts:

• WBD434: Bitcoin & The Battle For The Fate Of Humanity with Mark Moss

• WBD432: The Future of Bitcoin with Nick Carter

• WBD427: El Salvador’s Bitcoin Bond with Lyn Alden

• WBD415: Is Hyperinflation Coming? with Lyn Alden

• WBD409: Bitcoin and the U.S. Fiscal Reckoning with Avik Roy

• WBD378: Nassim Taleb’s Bitcoin Black Paper with Lyn Alden

• WBD364: El Salvador Macro Outlook with Lyn Alden

• WBD363: Why El Salvador Made Bitcoin Legal Tender with President Nayib Bukele

• WBD355: ESG, Tesla and Energy FUD with Lyn Alden

• WBD343: The Truth About Inflation with Lyn Alden

• WBD316: The Nation State Case for Bitcoin with Balaji Srinivasan

• WBD314: Sovereign Bonds & Bitcoin with Lyn Alden

• WBD293: 2020 Bitcoin & Macro Review with Lyn Alden

• WBD281: No Escape from Bitcoin's Gravity with Nik Bhatia

• WBD240: What Now for Bitcoin? With Nic Carter, Tuur Demeester, Robert Breedlove & Alex Leishman

• WBD266: How Bitcoin is Helping Protesters in Belarus with Alex Gladstein & Jaraslau Likhachevski

• WBD262: Why a Currency Devaluation is Likely with Lyn Alden

• WBD213: WTF Happened in 1971 with Ben Prentice & Heavily Armed Clown

• WBD200: Beginner’s Guide #15: Bitcoin FUD with Nic Carter

• WBD192: Beginner’s Guide #11: Bitcoin and the Macroeconomy with Travis Kling

• WBD056: Alex Gladstein on Why Bitcoin Matters for Freedom