Why a Currency Devaluation is Likely with Lyn Alden

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“There is a pretty asymmetric reward for holding Bitcoin.”
— Lyn Alden

SHOW DESCRIPTION

Location: Squadcast
Date: Monday 21st September
Company: lynalden.com
Role: Macroeconomist

When COVID-19 struck, governments across the world implemented unprecedented stimulus packages to help what were already fragile economies, which had never fully recovered from the 2008 global financial crisis.

While the economy moves in short-term 5-10 year cycles, a larger multi-decade cycle appears to be coming to an end. As governments pursue further rounds of quantitive easing, debt to GDP levels are heading towards what Lyn calls the event horizon, where debt to GDP is over 130% and currency devaluation is the most likely outcome.

Holding cash through a currency devaluation risks losing purchasing power as governments increase the money supply to service debt, thus scarce assets such as gold and Bitcoin are a safe haven. 

In this interview, I talk to Lyn Alden, a macroeconomist and founder of Lyn Alden Investment Strategy. We discuss the current state of the economy, monetary and fiscal policy debt cycles and if we should expect currency devaluation.

TIMESTAMPS

00:04:45: Introductions
00:05:44: The problem with the economy
00:06:59: Fiscal policy versus monetary policy
00:08:55: Boom and bust cycle
00:12:15: 2008 and 2020 financial crises
00:17:42: Low bond rates
00:20:30: Yield curve control
00:21:34: Is the economic system broken?
00:23:26: The social impact of wealth inequality
00:27:50: Steve Mnuchin and stimulus cheques
00:30:04: The gold standard and other economic systems
00:32:20: Travis Kling
00:35:13: The Fourth Revolution, Strauss and Howe
00:38:33: Negative interest rates
00:41:14: The Debt Event Horizon
00:45:21: Are we heading for a currency devaluation?
00:46:19: The situation in Japan
00:47:31: Currency devaluation explained
00:52:40: The possibility of double-digit inflation
00:53:38: The current risk for cash in the bank
00:54:23: The subject of Bitcoin
00:56:29: MicroStrategy and the Bitcoin ETF
01:01:26: What should the average man be preparing for?
01:03:04: Final comments

 

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SHOW NOTES

PodcastPeter McCormack