The Macro Backdrop: Why Bitcoin? Why Now?

Published on
November 30th, 2020
Duration
113 minutes

Boaz Weinstein – Finding Relative Value Amid Credit Market Madness


The Macro Backdrop: Why Bitcoin? Why Now?

The Interview ·
Featuring Lyn Alden and Travis Kling

Published on: November 30th, 2020 • Duration: 113 minutes

Lyn Alden of Lyn Alden Investment Strategy, joins Travis Kling founder of Ikigai Asset Management, to discuss the current macro climate and the various forces contributing to deflationary and inflationary pressures. Alden explains the ramifications of these pressures on stores of value, such as Bitcoin. She touches on the potential "Japanification" of the United States, debt cycles and the Bitcoin Halving. Alden explains that US politics will have the greatest impact on most asset classes in the near term and that the diversification of global payment systems will likely be the most important in the longer term. Filmed on November 10, 2020. Key Learnings: Alden explains that the long term debt cycle will likely play a role in the continued growth of Bitcoin and that the US political situation will weigh heavily on the near term growth in store of value assets. She lays out the primary factors that answer the questions, why Bitcoin? Why now?

Comments

Transcript

  • BV
    Bas V.
    6 December 2020 @ 22:39
    Even though I liked the interview, it felt a little like an insult to Lyn to be interviewed by Travis. It was so blatantly clear that she was simply way out of his league in terms of argumentation, knowledge, understanding and especially articulation of her views and arguments.
    • RS
      Riki S.
      7 December 2020 @ 01:06
      I honestly am not sure how you've managed to form that view. Travis asked some insightful questions which is his role as the 'interviewer' and padded out the interview with useful market intelligence. His function here isnt' to provide his own market thesis, with the exception of a few tit bits that allow the interview to flow, its to tease out Lyn's. She afterall is the interviewee.
    • BV
      Bas V.
      8 December 2020 @ 14:59
      Glad to hear that I seem to be wrong in my view :-) That's how it came across to me but if that's not the case for most people, I stand corrected. Thanks for your reply Riki.
  • RS
    Riki S.
    7 December 2020 @ 00:20
    This is the definition of an excellent interview. Great questions from Travis and allowing Lyn sufficient opportunity to fully respond so the listener obtains the full benefit of the question and the answer. That sort of structure allows the listener to patch together a more coherent and cohesive understanding of the macro perspecitve Lyn provides. That is not to say that she is 100% correct - who is - nor does it mean her view should not be challenged via intelligent agitation, but it makes more sense than less to have a solid foundation of her macro thesis before looking for potential weakness and therefore opportunity to consolidate a committed and stronger personal POV of the financial world. Refreshing considering another so called interview Lyn recently participated in. Thanks Travis and Lyn!
  • BF
    Biffle F.
    2 December 2020 @ 21:06
    I’ve been exploring Bitcoin very seriously lately and what I’ve come to understand is that people can certainly own Bitcoin, but they can not safely buy or sell it. All of the exchanges are either bankrupt or just pure scams. 50% of the reviews are from people who are owed money by the various exchanges but the exchanges either claim a need for unending delays or they just ghost them altogether. There is no safe way to obtain or sell Bitcoin. Even the highly touted Coinbase is inaccessible to customers. They don’t have phone access and they don’t respond to email. Caveat emptor.
    • AH
      Andrew H.
      6 December 2020 @ 04:01
      Kraken - been buying and selling with them for years without a hitch. Swan for automatic repeat purchases from checking account.
    • AH
      Andrew H.
      6 December 2020 @ 04:10
      and self custody via your own hardware wallet such as Ledger
  • RT
    Ryan T.
    5 December 2020 @ 10:07
    This is such an excellent interview! Travis asked very good questions and Lyn truly enlightened me with her perspectives. I also took this opportunity to review some of the economic concepts that have eluded me for a while now. Thanks both! : )
  • JD
    Jafo D.
    4 December 2020 @ 02:48
    Bitcoin (BTC) is king and will keep eating everything, as it has for the past 12 years. Dec. 02, 2020 Year to date BTC +178% Gold +20% SP500 +12.6%
  • mg
    matteo g.
    3 December 2020 @ 17:54
    "Holders of bitcoin" seen as future voters --> adoption reduces probability of banning
  • JS
    Jerad S.
    3 December 2020 @ 06:34
    I find this soothing for some strange reason. I wonder about this strange psychological experience is. The experience of being surrounded by new financial information all the time. How am I being affected?
  • MC
    Mathew C.
    3 December 2020 @ 06:29
    People are protesting against people who use the phrase “Forcing function”
  • J
    Johan .
    2 December 2020 @ 21:09
    Brilliant!
  • JA
    John A.
    2 December 2020 @ 19:31
    Yield Curve control = sell bills and buy bonds. It doesn't mean demand is less, it just means the Fed has to soak up the excess supply. What the Treasury and Congress does with that excess is the part that could cause inflation. Sitting in the TGA, all this program does is take liquidity OUT of the system. In WWII, the debt was financed domestically and reinvested into the country's infrastructure. They supercharged the velocity of money AS WELL AS the size of base money. To offset inflationary pressure, they controlled the duration of credit and put caps on commodities. They essentially took away things they needed and didn't allow it to enter the economy. You couldn't buy new tires for your car for like 4 years during the war. Contrast that with today where most of the base money created fails to leave the financial system. We need to see the other shoe drop in order for inflation to actually be a real thing. And no matter WHAT the Fed does, it does not have the power to create inflation alone. https://libertystreeteconomics.newyorkfed.org/2020/04/how-the-fed-managed-the-treasury-yield-curve-in-the-1940s.html#:~:text=During%20World%20War%20II%20the,than%20200%20basis%20points%20higher.&text=A%20flatter%20curve%20and%2For,have%20required%20less%20aggressive%20interventions. Quoting from the article: Experience with the Fixed Pattern of Rates Fixing the level of Treasury yields endogenized the size of the System Open Market Account: the Fed had to buy whatever private investors did not want to hold at the fixed rates. As a result, the size of the Account increased from $2.25 billion at the end of 1941 to $24.26 billion at the end of 1945. Fixing the pattern of Treasury yields endogenized the maturity distribution of publicly held debt. In each market sector, the Fed had to buy whatever private investors did not want to hold and, up to the limits of its holdings, had to sell whatever private investors wanted to buy beyond what the Treasury was issuing. Investors quickly came to appreciate that they faced a positively sloped yield curve in a market where yields were at or near their ceiling levels. An investor could move out the curve to pick up coupon income without taking on more risk and then ride the position down the curve, adding to total return. This strategy of “playing the pattern of rates” led investors to prefer bonds to bills. Their preferences, coupled with the Treasury’s decision to issue in all maturity sectors, forced the Open Market Account to buy unwanted bills and to sell the more attractive bonds. By late 1945 the Account held 75 percent of outstanding bills, but—in spite of heavy bond issuance by the Treasury— (This is the most important part): -- fewer bonds than it had held in late 1941. The essential problem was that the positive slope of the curve was inconsistent with the negligible volatility of rates and the Treasury’s issuance program. In early 1949, Allan Sproul, the president of the Federal Reserve Bank of New York, concluded that “in a supported market in which all obligations might be regarded as demand obligations, a horizontal rate structure would theoretically be required.” (so if we have already done this song and dance before, I fail to see why the 30Y is going anywhere but DOWN from here. What happens to inflation is up to Congress ultimately. But without Georgia handing the Senate to Democrats, I fail to see McConnell wanting to let Joe Biden bring about the largest expansion of investment into America since WWII unless someone holds a gun to his head and causes 1929.)
  • RM
    Russell M.
    2 December 2020 @ 18:38
    Awesome (as usual with Lyn)!
  • RZ
    Richard Z.
    2 December 2020 @ 11:00
    Fantastic discussion!
  • PP
    PATRICK P.
    2 December 2020 @ 02:41
    Question - can someone explain what Lyn means by US manufacturing jobs being exported overseas because the world needs US dollars? Great interview.
    • DD
      Donal D.
      2 December 2020 @ 05:13
      Patrick, I'll take a stab at it but bear in mind I'm no Lyn Alden. If you are China you need to buy oil to run your economy and that means you need dollars. The only way for China to get dollars is to manufacture something the US consumer wants and then export it to the US. So for example people want 60inch TV screens then China makes them and sells to the US consumer. Given its lower labor cost that means TV are manufactured in China not the USA. Of course the US consumer could choose to buy US manufactured products but that would mean paying a higher price and that is the crux of the issue. A little basic but that's the way I see it. Donal.
  • TC
    Tim C.
    2 December 2020 @ 01:31
    Lyn is awesome! She is completely data driven and pragmatic. One thing I would love to hear is her opinion on Treasury issuance. It's a massive mechanical problem...
  • BZ
    BRIAN Z.
    30 November 2020 @ 09:52
    LA obviously a phenom. Unfortunately at 1:32:28 the word "exspecially" was used :/
    • AR
      Andres R.
      30 November 2020 @ 12:26
      that's what you get out of it? :/
    • LS
      Lemony S.
      30 November 2020 @ 16:51
      That's funny Brian, good stuff bro. Yes LA top quality.
    • CM
      Cory M.
      30 November 2020 @ 17:14
      This isn't Youtube. We don't need commentary like this.
    • MZ
      Mark Z.
      1 December 2020 @ 23:19
      Your just asking to get doxxed
  • TA
    Teddy A.
    1 December 2020 @ 21:56
    One of the best conversations of the year. Applied macro without the fluff. Up there with Raoul x Kiril, Raoul x Hugh, Hugh x Werner and Hugh x Gromen.
  • MJ
    Marius J.
    1 December 2020 @ 19:23
    Please do this again.
  • SB
    Stewart B.
    1 December 2020 @ 14:20
    Lyn Alden is such a fresh voice in economics. I'd love to hear more. Thank you Lyn.
  • SS
    Steven S.
    1 December 2020 @ 14:05
    Lyn's the best. Her depth of knowledge on an incredible number of topics is impressive.
  • SK
    Stephen K.
    1 December 2020 @ 03:38
    I would love to see RV do something on the WEF. Lyn in particular would love to hear her thoughts. This was brilliant. I really enjoyed.
  • GA
    Gerald A.
    1 December 2020 @ 03:37
    Fantastic! Both the questions and the answers.
  • JA
    Jerram A.
    1 December 2020 @ 02:51
    Lyn Alden is so articulate. Love hearing her talk
  • PL
    Phillip L.
    1 December 2020 @ 02:17
    Great interview. Thank you both!!
  • ns
    nikolay s.
    1 December 2020 @ 01:53
    Travis dont be shy to ask the girl out!!!
  • je
    james e.
    1 December 2020 @ 00:08
    Who gave thumbs down? Excellent discussion.
  • J
    Johan .
    30 November 2020 @ 22:34
    Brilliant!
  • RM
    Russell M.
    30 November 2020 @ 21:02
    Great questions and great answers for value insight.
  • LS
    Lemony S.
    30 November 2020 @ 19:44
    Travis, great job here my man. Lyn always has a great way, a very cogent approach her. I appreciated this interview very much; I hope you all do it again as you said you might.
  • AT
    ALAN T.
    30 November 2020 @ 18:12
    Terrific
  • MS
    Marty S.
    30 November 2020 @ 17:21
    Great content Lyn, i really enjoy your style and delivery.
  • SS
    Stephen S.
    30 November 2020 @ 15:52
    More like the bottom 80-90% getting hollowed out at this point.
  • bm
    brian m.
    30 November 2020 @ 08:43
    Very nice painting on the wall.
    • bm
      brian m.
      30 November 2020 @ 08:44
      The one behind Lyn