We Study Billionaires - The Investor’s Podcast Network BTC096: Fractional Reserve Banking Vs Bitcoin w/ Mike Stroup (Bitcoin Podcast)
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Sep 21, 2022 Mike Stroup, a finance and economics expert, dives into the complexities of fractional reserve banking versus Bitcoin. He discusses the alarming rise of federal interest expenses and how it compares to military spending. Stroup explains the role of broad money supply in measuring inflation and critiques traditional inflation metrics. The conversation also touches on global currency reserves and their impact on financial stability, highlighting Bitcoin's potential as a safe alternative. Plus, he shares fascinating military pilot stories!
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US Debt Composition
- Most people assume US debt consists of long-term bonds, but it's largely short-term.
- This makes the US fiscally sensitive to rising interest rates, as seen in recent expense spikes.
Rising Interest Expenses
- The US government's 12-month rolling interest expense has increased dramatically due to rising rates and short-term debt.
- This expense, nearing $718 billion, rivals the defense budget, impacting the US fiscal position.
Inflation and Indexed Liabilities
- Inflating away debt is difficult due to inflation-indexed liabilities like Social Security, Medicare, and Medicaid.
- These expenses increase with inflation, making it hard for inflation to outpace them.