YouSaid · the spoken record

Lyn Alden

lines on the record: 123
first: 2023-10-05
most recent: 2023-10-05
sittings or episodes: 1
sources: podcast

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“And so a country that would tie its currency to Bitcoin, number one, I presume that is your case. It's not actually Bitcoin is the currency. It's the currency is tied to Bitcoin. In other words, the base money layer is Bitcoin, and that is tied to the broad money, what everyone goes to buy their coffee with at a fixed ratio. That's what the gold standard was. Is that what you sort of imagined the future as being? And what are the benefits that you'd imagine? And then I'll propose some potential drawbacks.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Year, country by country direction as people gravitate towards they do their best to gravitate up in terms of monetary hardness in a more bottom-up way.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Institutions a lot more developed capital markets. But I think over time, the currency becomes more and more untenable and people start reaching for other things. And this was another era they might reach back for gold. Like in the 1970s, when things were spirling out of control, gold had a very big bubble. And whereas today, the new contenders are obviously things like Bitcoin, where for developing countries, the apex predator is the dollar. And when you look at the United States or Europe, the potential long-range apex predator, something like Bitcoin, where you have a scarce open source money that is immune to a lot of things that these currencies are immune to. Now, it remains to be seen now that's going to turn out, but I think that the market only tolerates things for as long as it can until starts seeing viable alternatives. It's not like a bunch of people are going to get around and decide this is what our new system is going to look like. I think it's just going to be a mess.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Or Argentina, a little bit less extreme, but still similar as countries start to go in that direction, they start getting dollarized. And it's not because the country chooses to dollarize or a bunch of intellectuals decide, okay, we have to go back to a harder money system. It's that more and more people just start protecting themselves by holding dollars, stable coins, whatever, other foreign currency gold instead of the local currency. And then in many cases, they'll start even doing unit of account contracts. So they'll start paying each other in those other types of units because they don't want to deal with the fact that this other unit is hyperinflating or borderline hyperinflating. And in developed countries, it's, you know, it's a much longer, slower process, but I think we're kind of on the same train ride. It's just that we have a lot more track ahead of us than a developing country have because we have a lot more capital to start with. We have a lot more extensive.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“I would not argue okay, we have to go back and reconstruct the monetary system of 1800s. I think that it's both not necessarily even desirable, but even if it was desirable, it's not possible, right? It's just the system developed this way because of the technology that are and incentive structures that allowed it to. It's like there's a reason why in 200 countries, you know, any gold standards, see any countries that have full reserve banking, it's in my view, not because things are bad, but because those things just they didn't have incentive structures that allowed them to keep going when you had other ways of doing things. And so instead what we generally see is, I think things are going to get in many cases, at least from a monetary perspective, not necessarily other case, but monetary perspective, things generally get worse and worse and worse and worse until that country loses its ability to print the currency. And this is normally what you see in developed countries. So when you have a country like Lebanon on a very extreme end.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Yes, but then when you have a central bank that can't print the own unit and keep doing it indefinitely, that credit has like a temporary window. So your ability to win the war quickly or make up or something, that's a much shorter window, right? So a lot of wars are financed by credit, but those creditors are looking at this and saying this might actually be a nominal default. If I'm letting them gold and they can't print gold and if this war is not going well, I'm not going to keep financing them. Whereas when you have fiat currency, your limit is not how much gold you have in your vault or how much gold you can get from creditors. It's the entire liquid savings of your citizenry can be repeatedly devalued until you are completely exhausted that capability. So there's a much larger pool that you can draw from non-transparently.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“With a hard money, commodity money, gold, Bitcoin, that sort of devaluation is impossible. Because I think when we had a gold standard, wars have always been paid with credit, right? I mean, it's never like let's tax people and then let's use that taxes to go to war. I mean, maybe that's that for the first day, but pretty soon it's going to the basement.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Whereas, you know, I say in the book The Cost of War Project by Brown University estimates that the whole war on terror cost is something like $6 trillion. It's going to cost us something like $13 trillion by 2050. And what did we get for it? So that was one of the biggest contributors to where we find ourselves in the situation now, along with a bunch of other contributors. no one and understandably so no one ever looks back 20 30 years when we have a fiscal crisis to say how do we get to this it's always you know the dialogue is it is it Biden's fault is it Trump's fault right it's all the current period that everyone's focused on no one looks to the accumulation of all this over time and that's what the fiat currency system has enabled us to do is that it defers the cost so long that it becomes totally removed from what caused it the first place”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Where we're talking, you know, we started this discussion by talking about bond oversupply and bond yields and stuff like that. How many people would tie that back to the war in Iraq, for example? How many people are talking about that right now?”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“For being in this country, that they can't even point to a map, for example, that fewer people could identify rack on a map than the ones that said we should invade it. And so, and another thing I kind of cite is a study that showed that each war in American history kind of over the last century or so, like let's say the post-World War II environment, or even including the World War II environment, was increasing less financed by taxes. So, you know, World War II had all, you know, there's war bonds, there was all sorts of like kind of, it was a very transparent thing. And as we got more and more wars over time, so the Korean War, the Vietnam War.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“What's the lack of transparency? You don't have to finance things with taxes, you can delay, defer, and then dilute over time. And an example I use in the book is that when the United States was deciding why we were going into the Iraq war and there were polls at the time where they would survey Americans like Gallup polls and say, are you in favor of the invasion of Iraq? And you would have 73%, 76% approval ratings. You said, yes, we should go invade Iraq. And my argument was if he said, okay, we're going to invade Iraq, but we're going to pay for it. So there's going to be 5% or 10% income tax or tax to pay for that. Now what are the poll numbers going to look like? And it's hard to say exactly what the poll numbers will look like, but I'm sure we'd agree that they would collapse significantly versus the 70-some percentile if there's actually going to be a tax on people.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Money started moving around faster, started to invalidate that old era. That was kind of a golden age that was the golden age for its time. And then as we kind of entered this new era, our money got worse, but we still had the ongoing energy dividends from this kind of say two century energy revolution. And what's interesting going forward is that now is Bitcoin and adjacent technologies. I think there's a way to build a new system that has a lot of the features of that old system, but in this digital era, right? So I don't really believe in going back to prior golden eras because a golden era that was the best it could have been in that era or was working well in that era is unlikely work well in this era because you have very different technological realities. And there's a reason that that prior system was not around anymore.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“That's more temporary and local, whereas technology drives things forward permanently and globally. So for example, by inventing refrigeration or inventing electricity or inventing flight, for example, you solve a problem that can then start spreading everywhere. And unless you have a total civilizational collapse is never undone. It's just a permanent improvement that more and more humans have access to forever. And so when you look at the say the gold community, like the hard money proponents there, in many cases they kind of look back on that period as something they want to return to. Whereas one thing I argue is that things kind of happen the way they had to and couldn't really have happened almost any other way, at least in terms of money, which is that as we started to invent things that brought our world together more. So the telegraph, the telephone, the radio, the internet, all these kind of increasing telecommunications technologies, the fact that”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Go back in the gold age of energy. And when you're comparing an era where there's the gold age of money, but not the gold age of energy, in many cases, energy trumps that. Basically having more energy per capita at your disposal is arguably the single biggest variable and money's probably the second biggest. And so in those environments, you still have problems of financial inclusion. You still had other things. But a lot of that was technological shortcomings, energy shortcomings, and that kind of thing. And part of why I wrote the book is that I view technology as kind of a driving force for a lot of things more so than politics and things like that. Now, obviously, politics can be very important. I mean, politics determined which countries came out of the 20th century on top versus which ones, you know, descended into poverty due to like, you know, communist beliefs and things like that, right? So politics can be very important, but the limitation of politics and things like that is that's.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“The numbers themselves, I think, speak for themselves, which is basically that there was a huge uptick in longevity and overall wealth creation. Now there were in the United States, and this is a very country-specific thing. In the United States, you had very high levels of wealth concentration. Ironically, you've only in recent years kind of revisited those same degrees of wealth concentration. And so they're clearly not unique to a hard money environment. You can have very high rates of wealth concentration in that environment in a different types of monetary environments. So back then, again, you still had constraints on, you look at the per capita energy usage back then, it's a fraction of what it was now. And so that's inherently going to make a much harsher world. And so when I talk about kind of that being the golden age of money, not necessarily overlapping with other types of golden ages because you still had other shortcomings. Right now, like.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“How would you judge the 1800 on very low rates of monetary inflation? You give it high marks, but what about levels of financial inclusion in terms of who had a bank account, what percentage of the population interacted with this monetary system at all versus people either had no money whatsoever or they conducted business in basically rags or like basically paper money that they traded amongst themselves, as well as financial instability, the very high rate of bank failures throughout the 1800s, as well as just the fact that when there is deflation and you have to declare bankruptcy, your debts are not inflated away. And that can be quite good for capitalists and business people, but for borrowers who are indebted, it can not be great. And that's why a lot of populist movements to represent the working class, they strongly oppose the work.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Your money or your energy security. Because if you mess up those things, that's where you actually start to have the most severe economic problems.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“And the one pushback I generally get on that is people say, well, you know, if you look in the 20th century, we've seen rapid reductions in still reductions in global poverty, reductions and all this. And I would say, well, yes, but a large, a lot of that is tied to energy. that we've continued the trend of getting more and more energy per capita. That's continuing the trend of human flourishing, but that's, I think, going to one, start running into headwinds. And two, if the money gets bad enough, you don't really see that happening anymore. So, for example, a lot of countries going backwards compared to where they were decades ago, whether it's Argentina, whether it's whether it's many other developing countries, Lebanon, for example, some of these places were in many aspects very highly developed, and it's their money systems that broke. And so one way I would describe it is that if you're running a developed country, the two things not to mess up.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Working pretty well. A general thing you see is that inflation leads to disorganization and disorganization leads to inflation. So it's hard to be highly productive in places like Argentina, at least on an economic scale. Individual people can still be productive, but it's hard for that economy to be productive because it's very hard to make long-term contracts. There's so many added frictions when you don't have a good accounting system. And then it's hard for people to build liquid savings, have comments about the future, deploy those savings into good investments or good entrepreneurship environments. And instead, you get brain drain. People want to leave. They want to go elsewhere. They want to access better monies. And so I think it's not a coincidence that some of the best periods of kind of art, science, engineering, economic growth occurred under good money environments.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“It certainly was, and especially because you know in that world, you just had inherently less energy per capita, so you're going to have more things that are horrific today. It's just going to happen more in those eras. And it's a very different environment. But a lot of the 1800s are a period of rapid technological acceleration, rapid reduction in poverty rates, rapid increases in longevity, which extended into the early 1900s. That's where we kind of entered the modern era. fueled on what was a fairly strong money environment. So, and then, you know, of course, the Renaissance, we literally use it today. I mean, Renaissance is means rebirth or, you know, going from a crappy time to a better time where art can flourish and where science can flourish and where ideas can prosper and be less restrained. And so I don't think it's an accident that those environments occurred in periods where money was”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“I kind of mentioned two golden ages. One was like the Renaissance, so earlier in your coming out of the Middle Ages. And then more specifically in modern times, that kind of at 1800, it's either the pre-telegraph or early in the telegraph era before it all blew up. Those were kind of the eras where it was, in many cases, the best. And it's both in terms of you had relatively sound money, but then you also had a lot of human flourishing based around that sound money. Now, it's not to say that everyone was like everything was perfect.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“So, when you give very high marks to the golden age of money, there is no golden age of money, but you think that the 1800s in the US and London for the UK, that was a better time for money. Is the standard by which you were judging it? Is that debasement or the level of monetary inflation?”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Holdings, all of this was non transparently devalued and channeled towards war and continental Europe. And so I think that's kind of, you know, even though it's a while ago, that's a key example what happens today and is kind of a big reason of why this is, you know, I think a lot of the rising populism, a lot of the rising frustration you see in many places is tied to the fact that they know there's something broken with the money. But it's, you know, it's a very complex subject, very hard to articulate how. And it manifests in various ways. And I think that's kind of the area we find ourselves in where we have these 160 different fiat currency bubbles. We have this non-transparent problem of how money works and what is a fair accounting system. And I think that this is kind of one of the biggest challenges of our day.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“So, what they instead did was they tried to finance it with debt and they said, okay, we're going to issue a lot of war bonds and we're going to go fight this war. And the problem was that only about a third of those war bonds were purchased. And the other two-thirds were not. And so they had trouble financing their desire to go fight to war while retaining stable monetary conditions. So instead what they did was they lied and said the bond auction was oversubscribed. And what they really did was finance it through central bank credit creation. And so you had basically outright monetization of government debt. That was, of course, highly inflationary. And so what they did was they basically opaquely non-transparently devalued the savings of all British households. They also devalued the reserves of any country that was holding or British bonds and things like that as part of the reserve hold.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Period, you start to get a rapid period of deceleration. I mean, dilution. And the reason you can do that is because now if you wanted to base your currents, you can do so with stroke of a pen. You don't have to go through that difficult process figuring out how to get that coinage in and then reissued at a more diluted rate. And so what that has done is it has empowered nation states and also decreased their transparency. So it's not, you know. And the example I use in the book is that when the UK wanted to join World War I. So this was not a war that was threatening their own soil. This was a war in Europe and they wanted to get involved for strategic reasons. But it's really hard to sell that idea that we have to go fight in this other continent where this other part of the continent between two powers, we're not physically threatened right now, but we don't want this other power to get too big. So we have to go send people to die and do it. And we have to raise taxes to go do it.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Rate at which countries can debase is much accelerated. So back in any other era of money, if an empire wanted to base its coinage, it was a very slow process because you can't just magically, you know, all the silver coins or gold coins that are in households throughout your country. You can't just slap your finger and change their substance. You have to pull them in over time, reissue them at diluted rates. And so that's inherently a slow process. And when you look at, say, the Roman coinage, that took centuries to debase. When you look at the British pound sterling, this is the longest serving kind of currency that's still in use today. It's been around for, you know, over a thousand years. And it has something like a 0.15% debasement rate relative to silver for like eight centuries. And then only in that modern...”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“The golden age of money is not necessarily the golden age of other things, for example, I would say in large part why our world's so prosperous today is because we've had the golden age of energy. So the discovery of hydrocarbons and various forms, the application of nuclear power, things like that. So sometimes you get overlaps where the golden age of one thing is not necessarily the golden age of another thing. It's not saying we should go back to the Renaissance or go back to the 1800s because obviously there's other problems in those days. But I would say that once we entered this environment of the telegraph, that's when money broke down. And I think it was Ron Paul that argued that, you know, it's not a coincidence that the century of central banking occurred during the century of total war. And some of that is hyperbole, I think, in the sense that technology also obviously played a big role. But basically what this period enabled is that the”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“So, in many cases, the development of banking was always about trying to solve some of the deficiencies in money. So, for example, the lack of divisibility or hard to authenticate gold and things like that, or hard to safely move at long distances, that's where we got banking. And then once you introduce banking, you get various types of counterparty risk. There's never been some like perfect platonic ideal of money. But in general, I would argue that, you know,”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“So, what do you view as the golden age of money, sort of pun intended? And you referenced that book that was written in 1870 or 1875. Later on, you referenced the weakness of the gold standard in World War I, when all of the, I don't know if it's all, but Britain, France, many, definitely all the Europeans went off gold. So you could no longer convert. Some people would consider that a default. And then the huge weakness in the gold standard of the Great Depression and all the gold flowing into the United States and pretty much they're just not being enough gold to settle. So what do you consider sort of the golden age of money when money, maybe if it wasn't broken, it either wasn't broken or it was a lot less broke than it is today? And yeah, and why?”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“From an entity that can harden that currency whenever they want, soften that currency whenever they want. That's a much harder environment, I would argue, to develop in. And so Money's broken, I would say, is largely due to a technological shortcoming, but then that enables all sorts of problematic incentives from there.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Or less developing country status by modern standards. Some of them like South Korea, Taiwan, you still have like MSCI or FTSC might disagree on whether or not they fully meet it. But for all intents and purposes, in many cases, they're more developed than South Korea has better internet than we have here in the United States, for example. That's developed in my book. So there's a handful of countries that have gone from developing to developed, but there's been none in Africa. There's been none in Latin America. If anything, you've had some go in reverse during these past 50 years. And so this is a system that is just very hard to develop if you're not already developed. Most of the countries that we know of develop today developed under like a gold standard or a free banking environment or basically environments where money in the unit of account was harder. And when you're in an environment where money is softer and all these countries rely on external financing,”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Also getting diluted on a regular basis. And that's just one example there's dozens and dozens of countries in the world with a couple billion people in it where they're in an environment where it's very hard for them to one, make it so that their income streams keep up with the global purchasing power. It's very hard for them to accumulate liquid savings. And so one of the challenges we've actually seen, and I think this is one of the most damaging statistics for the current system, is that you can count on one hand the number of developing countries that developed in the past 50 years. So how many countries, you know, were developing and are now developed? So there's a small handful in Asia. So Singapore, South Korea, Taiwan, there are a handful of ones that became such powerful exporters and then accumulated capital and then used that capital very well and they were able to reach what is”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Banks that define what is money, how money moves around. And it became so powerful that even when all those pegs broke relative to gold, we kept using those broken monies rather than using gold because gold was just inherently too slow to be serving the purpose. And so we find ourselves in a world where there's 160 different fiat currencies approximately. The top handful of them lose value slowly over time. If you're in the long tail of other currencies, you're losing value far more quickly, right? So for example, I just got back from Egypt and the money supply there grows approximately 20% per year pretty steadily. And so if your wages are not going up by 20% per year, you're getting diluted. Your income share is getting diluted compared to the amount of new money that's being created. And at the same time, if your money is not earning at least a 20% interest, you're savings.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Is that it's become so efficient and so centralized due to paper instruments and the telegraph, all this global trade is basically settling through London and it's just people updating a ledger between themselves. He's like gold almost never has to exchange hands. Nobody wants to hold gold. But at the same time, he's noticing that it's lever 20 to 1 because no one ever wants to pull their gold out. And yet if in any one day, if 5% of entities in the system want to pull their gold out, the system's not really solvent. And so he's saying like this, you know, it's both incredibly efficient, but I can see a problem here. And of course, that problem materialized in World War I. And so the way I would describe it is that the fact that commerce now moves so fast that no physical commodity can keep up for most of the past 150 years, the only alternative has been centralization and abstraction. So we gravitate towards banks and centralization.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Ever since the dawn of the telegraph, specifically the adoption of the telegraph, you've had the need to abstract money, right? So gold was no longer able to move around and be verified at the speed with which global commerce was occurring. And so, you know, one of the books that I referenced in my book was Jevin's 1875 Money in the Mechanism of Exchange. And the reason I liked it is because, you know, this is for reference, this was like nine years after the first cross-Atlantic telegraph. It had only been like, you know, maybe 20, 25 years of the telegraph being widely used in Europe. And he documents kind of history of money. So in many ways, his book was similar to mine, just the 1875 version where he's going into the history of money and then he's examining the current system and explaining the pros and cons of how it works. And what he's observing.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Any one thing, it changes over time. It's very different now than it was 20 years ago. It'll probably be very different 20 years in the future. But historically, that was more tied. Basically, the commodity unit account and credit unit of account were usually roughly the same thing.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“And banks and central banks had so much kind of consolidated power that they could separate the unit of account more completely from commodity money and for a longer stretch of time than you've normally seen elsewhere. So in the when you have such powerful technology where no physical commodity is able to keep up with it, that appears to be the one major exception where you have a very large credit based system where unit of account is arbitrary. So the unit of account in our current system is the dollar. Both the United States and in many cases elsewhere because the dollar is the global reserve currency. And the question is, well, what is a dollar? A dollar is a direct liability of the Federal Reserve and the only way you can really kind of quantify it is to say, well, how many liabilities do they have? So this is your share of the most important ledger in the world. And that's the unit.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Once we invented the telegraph, so once not just invented it, but also deployed it. So once we, you know, in this, especially the second half, the 1800s, when we had widespread telegraph adoption in Europe and North America and eventually the whole world, we were able to send information around very quickly, a lot more quickly than we can move physical gold. And the reason that's so important is because if you can send information, you can do a transaction. And so once we really accelerated the speed of our ledgers, that became kind of the first credible time.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“So historically, the unit of account would be ironically one of those commodities. And that's one of the things I was critical of the credit camp is that they would say, you don't even really need commodities. You can just settle things in credit. And then the question becomes, well, what is the unit then? Right. And if you look at most of societies that use credit, generally the unit would be something like a small bit of silver, one meal worth of grain, something that is easy recognizable, small, you know, it's kind of a the bottom divisible unit in that society. And so usually these two systems are not independent. You don't normally have an environment where you have only commodity money and no credit. And you don't normally have an environment of credit, but no use of commodity money and no unit that's not tied to commodity money. Now, the big exception has been, you know, in the fiat currency era. Basically, we've been in an environment where, and I covered this in the book.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so those are the two sort of philosophies of money. There's three, I guess main mechanisms of money, medium of exchange, store of value, and then unit of account. So when you buy something with a commodity, the school number two, which is tobacco, it's clam shells, or it's gold, the unit of account is the commodity. But under a credit transaction, the school number one that you talked about, what is the unit of account for settling transactions? What is it denominated in?”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“With each other, and it's generally either based on kind of credit and records, or it's based on highly saleable commodities.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Traders. You have some sort of ledger that's being run in your community. Could be an oral ledger, a small ledger, like in a very small group. It could be a written ledger. Today we have central banks. Those are our centralized ledgers. So that's one set of ledgers. And when you're using instead commodity money, what you're really doing is you're letting nature be the administrator of that ledger. So nature's setting the parameters for how hard it is to make that commodity, how hard it is to dilute the existing holders of that commodity. And that's a ledger that is updated through physical possession and that not every entity knows the full ledger state. Maybe no entity in the environment knows the full ledger state. But nonetheless, there is an objective number, for example, how many shells are in the region, how many gold coins are in the region. This is like a ledger that exists, and it's harder to manipulate than those centralized ledgers. And so I think essentially money is the ledger that humans use to try to trade.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Some items are either more specialized or more bulky or not as long lasting. They make poor money. They're the opposite of money. And then certain types of commodities are more money like. And so you generally have cultures gravitate towards whatever commodity is the best money in their environment. And that's an ideal unit for defining as a unit of account, using as one side of most spot trades and for storing kind of your unclear liquid wealth in. So if you don't know exactly what you want in the future, you put it into this like super commodity that you know gives you the most optionality. And so those are kind of the two routes of where money came from, either credit or the most saleable commodity. And one kind of conceptual way to link those together is that ultimately money is a ledger. So either a small community or in some cases larger communities like, for example, in Babylon, they have the templed administration.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“In that sense, money is credit. That's kind of one of the theories of how money developed. And then the other way of looking at it is that if we don't, if we're not in a known relationship where we're willing to extend credit or deferment or gifts in any way, we want to trade on the spot, then the other thing to do is to find a common unit that we both want all the time. And there's really, there's no situation where we'd have too many of those units that we don't want anymore, right? So money is kind of the tradable item where you never feel like you have too much. So it's small, it's portable, it's divisible, it's long lasting. It's liquid. You know, you can always find someone you can take it off your hands for other goods and services. And so”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“So I think, well, there's two main historical camps. And one thing I try to do in my book is reconcile them to some degree. And both of those camps kind of come down to the two ways that you can solve the double quincence of wands. Basically, the two ways to avoid barter. One is through credit. So you can defer a quintance of needs through time. So for example, if we're at hunter-gatherers and we want to trade, then we need to have a surplus of what the other side has a deficiency in, right? And that's hard to do. Whereas on the other hand, if we're willing to extend either gift culture or delayed reciprocation, then one of us can have everything we need right now and the other side can have a deficiency and the other person can help them with their deficiency in exchange for payback or a return in some future time.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and I think even if they were to outperform mildly on a risk or volatility adjusted basis, that would still be like a weak victory, right? So it's like when I imagine the range of outcomes, I can imagine them, say, moderately or mildly outperforming, you know, T-bills or fritration T notes. I can picture them kind of equaling it. I can picture them mildly underperforming with a lot more volatility, which would be bearish. Or I can picture, you know, in the most bearish case, a pretty significant underperformance. And so while I don't really have conviction on which one of those scenarios plays out, when I just look at the”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Put some of those valuations at risk, which again is not to say that those equities are going to fall off a cliff, but it means that the four real returns of those, I think in many cases, are going to be undesirable.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Or something like that. So if you look at it either in a real basis or on what you can get with an available low duration types of cash equivalents, their forward expectations don't look good to me. But clearly, the past six months, they would have risen. They've risen further than I would have guessed. And that's largely my view kind of a sentiment thing that basically these sort of weird signals investors interpret them in various ways. They can say, well, bonds are selling off because the economy is receiving, which might not necessarily be the case because you could just have bonds selling off due to a supply-demand problem, even as the economy is, you know, maybe not falling off a cliff or maybe not reaccelerating either. It could just be in this kind of stagnant malaise and you have a bond specific problem. I think eventually if this bonds kind of stay at the levels that they are or get worse, I think this increasingly”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“So I look them company by company more so than as a group, as most analysts seem to like them. And so some of them seem overvalued, other ones seem fairly valued. For me, somewhat the surprising thing this year was how they held up in the face of these higher yields. It's not necessarily that I expect their fundamental performance to deteriorate too much. It's that given, you know, in many cases they're fairly sluggish performance. I mean, Apple's, you know, they're doing well, but they're not exactly their growth is not exactly seller at the moment. But the multiples that investors are willing to pay for some of those companies is surprising to me. So I kind of put them in the category where I think a lot of them are just going to either trend sideways for a while in a volatile choppy range. Like I don't think before the, say, a five-year return expectations should be good, especially when compared to something like T-bills or two-year treasure note.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT
“Relatively conservative things, T-bills, cash equivalents, healthcare companies. And then, I mean, obviously another volatile play I like is Bitcoin. But of course, even in this sort of weird environment, I don't know what it's going to do for a three-month period.”
2023-10-05 · Forward Guidance · Lyn Alden: The Monetary Order Is Broken · IDENTIFIED FROM THE TRANSCRIPT