Joseph Wang (@fedguy12), the CIO of Monetary Macro and a former senior trader on the Open Markets Desk, joins Julia La Roche on episode 69 for a wide-ranging conversation on the monetary system, macro economy, and recent banking panic.
Wang is also the author of Central Banking 101, which is now an Amazon best-seller, and operates Fedguy.com, a blog on developments in the financial markets.
During this episode, Wang said it’s almost inevitable that the U.S. will have a decade of persistently high inflation. He also mentioned that this trend is difficult to combat and is driven mainly by the culture and politics of the era. According to Wang, we are in the early stages of the inflationary cycle.
0:00 Introduction
1:40 Welcoming Joseph Wang on the show
2:11 From practicing law to trading on the Open Markets Desk
3:20 Practicing law is boring
4:02 Graduating in 2008
5:38 Open Markets Desk at the Fed
7:02 Central Banking 101
8:26 Misconceptions around the monetary system
10:50 Disconnect between school and real-life in macro
11:58 Commercial banks create money out of thin air
13:49 Eurodollar system
16:42 Eurodollar futures market
19:08 Market is fighting the Fed
20:17 Eurodollar banking
21:33 De-dollarization
24:00 There aren’t a lot of good alternatives to the U.S. Dollar
25:00 What it takes to be a reserve currency
25:45 Weaponization of the U.S. Dollar
26:58 Bitcoin
28:06 Will the U.S. Dollar lose its reserve status in our lifetime?
28:47 Implications of the U.S. dollar losing its global reserve status
30:33 Inflation will be a lot higher than we are used to
31:08 Big driver of inflation is the culture and politics of the era
34:27 Macro outlook
35:46 Demographic changes
39:48 Banking crisis is over
44:42 Intervention during the banking crisis
49:19 Is banking safer for depositors?
50:15 Fed is in inflation-fighting mode
53:38 Parting thoughts
