Will Bitcoin Replace Central Banks with Lyn Alden

 
 

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“I think this decade is going to be transformative, but we’re still too early to say exactly where this ends up or how quickly this goes.”
— Lyn Alden

SHOW DESCRIPTION

Lyn Alden is a macroeconomist and investment strategist. In this interview, we discuss the rise and role of Central Banks: their intermittent role in the US’s history, the piecemeal erosion of a gold standard, the new era of easy money, and whether Bitcoin could replace Central Banking.

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Central Banks have played such a dominant role in our societies it’s easy to assume that they are required institutions within modern governmental systems. The idea that the market can determine a monetary policy and the price for money is well outside of the Overton window.

Yet, for long periods in the industrialised era modern civilised societies have functioned, developed and prospered without such institutions. Further, there is ample evidence that central banks are now far from being a steadying force that brings stability to economies.

For around 100 years, the international monetary system was pegged to gold; albeit there were debasements, new controls, and periodic abandonments during this period. Then in 1971, the monetary system was taken off any remnants of a gold standard. Its constraints on US fiscal policy had become too burdensome. It led to the development of fiat currencies and a period of easy money.

Governments have become increasingly dependent upon Central Banks in creating new money to assist with economic shocks: following the global financial crisis the production of dollars markedly increased. But these events were dwarfed by the injection of new money during the pandemic. Inflation is now catching up, but at a time when economies are stagnating.

Cycles of debt accumulation always come to an end. Without careful political judgement, coordination and luck, the resolution of unsustainable debt at the global level can lead to domestic and international conflict. So, we’re entering a transformative decade.

The question is whether Bitcoin, the strongest form of money ever invented, can enable society to navigate through this unwinding of the long-term debt cycle? Additionally, can it enable the market to again determine the price of money?

TIMESTAMPS

Coming Soon…00:03:42: Introductions
00:04:45: Before there were central banks
00:07:35: A history of free banking in the US
00:12:15: The emergency of the Fed
00:16:52: Why central banking began to fail
00:23:01: Bretton Woods, and WTF Happened in 1971
00:32:26: The creation of money creates money distortion
00:40:30: Technology and Bitcoin could displace central banks
00:49:13: Federated Chaumian Mints
00:51:45: The potential impact of the collapse of central banks, and mirroring Weimar
00:54:59: Causes of inflation, and denominations of Bitcoin
01:00:12: Moving to a whole new global monetary system
01:05:03: The unknown future of a Bitcoin world
01:13:10: Final comments

 

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SHOW NOTES

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Mentioned in the interview:

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