El Salvador Macro Outlook with Lyn Alden

 
 
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“In a market that’s so held up by quantitative easing and fiscal stimulus, when you start to see these reverse repos and the Fed starts talking about the potential for tapering next year… that certainly gives the market some jitters.”
— Lyn Alden

SHOW DESCRIPTION

Location: Remotely
Date: Tuesday 22nd June
Project: lynalden.com
Role: Macroeconomist

The new legislation in El Salvador making Bitcoin legal tender is a bold move for the country. As a dollarised nation and with remittance making up 15% of GDP, there are clear benefits in bringing bitcoin and the Lightning Network to the country.

A catalyst for this move is the macroeconomic fallout of 2020 which included unprecedented monetary expansion and economic disruption. Today, it seems some of the effects are starting to appear in price inflation and oddities in the overnight lending markets between financial institutions.

Will El Salvador’s bet on Bitcoin pay off? And are these simply transitory macroeconomic irregularities, or is there cause for concern?

In this interview, I talk to Lyn Alden, a macroeconomist and investment strategist. We discuss El Salvador making Bitcoin legal tender, other countries adopting Bitcoin, the Lightning Network and the reverse repo market.

TIMESTAMPS

00:04:06: Introductions
00:05:29: The El Salvador announcement
00:08:07: Effects of dollarisation
00:10:17: Protection from devaluation
00:13:18: Dollarisation and the bond markets
00:19:50: Dollar black markets and sanctions
00:22:40: Becoming dollarised
00:25:17: Injecting Bitcoin into El Salvador
00:28:45: The IMF and bailouts
00:30:42: Bitcoin legal tender a threat to the US dollar
00:37:52: Risks of Bitcoin adoption
00:40:54: Domino effect for bitcoinisation
00:45:22: Lightning network
00:48:56: Volcano mining
00:52:58: MicroStrategy's Bitcoin supply
00:57:41: Macro outlook and inflation
01:00:10: Reverse repo market
01:08:00: Final comments

 

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SHOW NOTES

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Mentioned in the interview:

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