The Truth About Inflation with Lyn Alden

 
 
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“CPI is a really crappy statistic for the most part… housing has gone up faster than CPI, food has gone up faster than CPI, healthcare has gone up faster than CPI, tuition has gone up faster than CPI, the cover price of the New Yorker magazine has gone up faster than CPI.”
— Lyn Alden

SHOW DESCRIPTION

Location: Remotely
Date: Friday 26th, March
Company: lynalden.com
Role: Macroeconomist

Bitcoin was born out of the 2008 financial crisis when central banks worldwide started printing money at levels never seen before to bail out the banks for a mess they created. 

Now, a decade later, amid a global pandemic, the money printer is again being used to rescue up a faltering economy. This time, the level of money printing dwarfs that of 2008/09.

With the ongoing debasement of fiat currencies globally, inflation is more of a concern than ever before. Bitcoin offers a hedge against the threat of inflation, and with its sound monetary principles, it is the antithesis of the inequity and reckless money printing of central banks.

Corporations are now using Bitcoin as an inflation hedge. When MicroStrategy announced their initial bitcoin purchase in 2020, CEO Michael Saylor explained that he was worried about their cash position being like a ‘$500m melting ice cube’. This sentiment has been echoed by many other corporations, with a record 47 S&P 500 companies citing ‘inflation’ in their 2021 Q1 earnings reports.

The link between printing money and inflation is not black and white, so how is inflation measured? And what are the markets telling us? 

In this interview, I talk to Lyn Alden, a macroeconomist and investment strategist. We discuss the growing concern of rising inflation, CPI as a measure and what the markets are signalling.

TIMESTAMPS

00:05:14: Introductions
00:05:55: Inflation base effect
00:08:37: The figures can be misleading
00:14:05: The effect of increased supply and demand on inflation
00:17:56: The producer price index - the precursor to inflation
00:20:20: CPI as a measure of inflation
00:23:21: Rising interest rates affecting mortgage payments
00:26:03: When the become a worry
00:30:18: Shrinkflation
00:32:36: Biden's economic policy
00:34:46: Infrastructure projects in the US
00:37:33: US corporation tax reduction
00:43:55: Capital gains tax in the US
00:45:48: The migration effect
00:48:14: Paper gold vs paper Bitcoin
00:51:10: A rise in liquidations
00:54:17: The spent output profit ratio
00:56:07: Elon Musk's Bitcoin activities
01:01:31: GBTC premium
01:05:29: Final comments


 

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SHOW NOTES

PodcastPeter McCormack