The Crisis of Inflation with Lyn Alden

 
 

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“I think we’re going through a quote-unquote ‘fourth turning,’ so a time period where we’re examining our existing institutions. We’re decreasing our level of trust in them, whether it’s governments, whether it’s media, whether it’s corporations… basically the things that have been built over the past 50-100 years, and wanting to build new institutions. And that transition is always very messy.”
— Lyn Alden

SHOW DESCRIPTION

Lyn Alden is a macroeconomist and investment strategist. In this interview, we discuss the macro environment. We zero in on the current inflationary crisis, focusing on the demand/supply problems with energy, prospects for recession, and the impact on markets and countries.

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The last time inflationary pressures seriously concerned the US was the 1970s. The decade ended with inflation at nearly 15%. Many believe current inflation, real inflation, not the figures provided by the US Dept of Labor, is at least 15% if not higher. And yet, we are in a much more precarious position now than in the period of the 1970s referred to as the “The Great Inflation”.

Global debt is at an all-time high. US government debt is over 137% of GDP. Unprecedented money printing during the global financial crisis was followed by more extreme money printing during the pandemic. Most countries are now bloated with debt. Further, interest rates are still at abnormally low levels. Economies are precariously balanced. Recession is close at hand.

At the same time, there is an energy crisis. Decades of underinvestment in energy infrastructure, poor policy decisions, and geopolitical issues means we have insufficient energy supply and price spikes. In the UK 40% of households could be deemed to be in energy poverty soon. There is talk of oil reaching $300 a barrel.

Then there is an emerging food crisis. The war between Russia and Ukraine is affecting some of the biggest suppliers of wheat, sunflower oil, and fertilizer. According to the World Food Programme 276 million face famine. A cost of living crisis is hitting the most vulnerable in all corners of the globe.

We are in very uncertain times. History suggests such pressures fuel populism, protest, and conflict. How should we protect our investments in such times? What assets could weather these storms? Who can we trust?

TIMESTAMPS

00:03:32: Introductions
00:03:49: Oslo Freedom Forum
00:06:00: Stablecoins in the developing world
00:09:52: A macro overview, the inflationary crisis
00:16:13: US vs Europe, an economic comparison
00:20:20: The UK and Japan
00:23:12: A commodity bull cycle and the lack of energy supply
00:37:57: Sri Lanka, and the factors leading to conflict
00:43:31: Russia/Ukraine, and Russia's expanse of resources
00:47:53: Talk of recession, stimulus and energy discounts
00:56:45: Windfall taxes, and debt cycles
01:04:12: Current investment options, and rates
01:10:12: The Fourth Turning, and equities
01:13:37: Final comments

 

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SHOW NOTES

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Mentioned in the interview:

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