The Crisis Across All Markets with Peter Doyle
Where to find the show
Download Episode MP3 File
The file will open in a new window. Click down arrow to download the file.
SHOW DESCRIPTION
Peter Doyle is the Co-Founder and MD of Horizon Kinetics. In this interview, we discuss investment in an economic climate marked by accelerating inflation, a debt crisis, an energy crisis, war and the potential for Bitcoin to upend the monetary system.
- - - -
The world’s economic leaders are publicly admitting that inflation is not the transitory phenomenon they were claiming it to be only a few months ago. Some observers think that behind closed doors they never really believed inflation would pass; given the extreme levels of debt, rising inflation makes sense as an unofficial government policy.
Irrespective, inflation has to be controlled. But taming inflation is a delicate balancing act. The trick is to achieve a ‘soft landing’: reducing inflation without triggering a recession. This proved impossible during the 1970s and early 1980s when inflation last ravaged the US economy. The dilemma is the current economic and fiscal environment is much worse than during the 1970s.
Interest rates have been at unprecedented low levels for over a decade. These have enabled governments to take on increasingly precarious levels of debt to shore up economies during pandemic lockdowns. Even modest interest rate rises risk triggering both sovereign default and recession. Whilst reducing the size of the state is problematic given its oversized share of GDP.
At the same time, there is a limit to what governments can do to control inflation. The conflict between Russia and Ukraine has resulted in a spike in energy prices. However, energy costs were already rising due to decades of underinvestment influenced by ESG mandates. This is a systemic issue affecting global markets. The expectation is for a prolonged period of inflation.
Investments need to now consider an environment where “cash is trash”. However, what is becoming increasingly clear is that investment managers are seeking more than just inflation-beating returns. In the face of possible scenarios where inflation can’t be controlled, Bitcoin is becoming part of portfolios designed to protect wealth.
TIMESTAMPS
00:04:00: Introductions
00:05:01: Inflation and underinvestment in energy
00:08:07: The future of fossil fuels
00:14:32: Inflation countering the debt crisis
00:17:32: Civil unrest
00:20:17: The money printing and its impacts
00:24:09: Financial planning and the INFL ETF
00:27:17: Investment in energy companies, and the ESG problem
00:37:23: Fed tightening mechanisms and the impact on bonds
00:41:46: Government spend, and size of governments
00:50:26: The hope that Bitcoin brings
00:58:00: Other investment options
01:01:39: Final comments
SUPPORT THE SHOW
If you enjoy The What Bitcoin Did Podcast you can help support the show by doing the following:
Become a Patron and get access to shows early or help contribute
Make a tip:
Subscribe on iTunes | Spotify | Stitcher | SoundCloud | YouTube | TuneIn | RSS Feed
Leave a review on iTunes
Share the show and episodes with your friends and family
Subscribe to the newsletter on my website
Follow me on Twitter Personal | Twitter Podcast | Instagram | Medium | YouTube
If you are interested in sponsoring the show, you can read more about that here or please feel free to drop me an email to discuss options.
SPONSORS
SHOW NOTES
Connect with Peter:
Mentioned in the interview:
What the Crisis in Sri Lanka Means for the World - Time, Jun 4th 2022
Politicians Stand By as Lebanon Teeters on Economic Collapse - Brown Political Review, May 26th 2022
Oil prices face big volatility as spare capacity dries up - Reuters, Jun 8th 2022
Energy prices: How will the £5bn windfall tax work? - BBC, May 26th 2022
Swimming pools could close due to soaring energy costs - Metro, Jun 1st 2022
Money supply (broad money) by country: the latest data - TheGlobalEconomy.com
World Bank warns of debt crisis risk as outlook worsens - FT, Jun 7th 2022
How a sustainability index can keep Exxon but drop Tesla - The Conversation, May 24th 2022
What the Fed's ‘QT’ Means for That $2 Trillion Pile of Cash - Bloomberg, Jun 1st 2022
Economic policy of the Hugo Chávez administration - Wikipedia
Other Relevant WBD Podcasts: