E135: The Problem With Reserve Currencies and Switching to Crypto w/ Lyn Alden [From the Archives]

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Apr 17, 2025

Lyn Alden, an insightful investment strategist and author of 'Broken Money', dives deep into the evolving landscape of global currencies. She highlights how the U.S. dollar's status as the reserve currency reshapes trade dynamics and influences inflation. Alden discusses the historical evolution of money shaped by technological advancements and shares advice for navigating economic uncertainty. She emphasizes the need for a shift towards understanding cryptocurrencies and the impact of debt on modern economics, urging listeners to rethink traditional financial paradigms.

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INSIGHT

Money as Ledger Systems

Money systems are fundamentally "ledger money," combining aspects of commodity and credit money.
Technology's influence on monetary systems is permanent and global, shaping how money works beyond politics.

INSIGHT

Telegraph's Impact on Money

The telegraph revolutionized money by enabling information and ledger updates at the speed of light.
This technological shift centralized power in banks and set the stage for modern financial systems.

INSIGHT

Crypto Breaks Currency Monopolies

Cryptocurrencies break traditional currency monopolies by enabling peer-to-peer value transfer.
This disrupts capital controls, allowing people worldwide to save or transact in alternative monies.

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This week on Upstream, we’re sharing Erik Torenberg’s 2024 interview with Lyn Alden. Lyn discusses her book 'Broken Money', the impact of the global reserve currency, inflation, interest rates, and provides advice for navigating an uncertain economic future.

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LINKS:

Broken Money: https://www.amazon.com/Broken-Money-Financial-System-Failing/dp/B0CG8985FR

Lyn’s website: https://www.lynalden.com/

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X / TWITTER:

@LynAldenContact

@eriktorenberg

@turpentinemedia

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HIGHLIGHTS FROM THE EPISODE:

Lyn explains her book "Broken Money" provides a comprehensive global view of the 160 different currencies and monetary systems worldwide.
She argues all monetary systems are essentially "ledger money" rather than just commodity or credit money.
Lyn emphasizes how technology permanently shapes monetary systems, a perspective underexplored in academia.
The telegraph was a crucial turning point, allowing information to move at the speed of light and shifting power toward centralized banks.
Bitcoin and cryptocurrencies enable peer-to-peer value transfer without centralized institutions.
Crypto continues to challenge currency monopolies by letting people circumvent capital controls and save in alternatives to local currencies.
The US dollar's reserve status creates structural trade deficits and contributes to deindustrialization.
Reshoring manufacturing remains difficult while maintaining reserve currency status.
Raising interest rates to combat inflation has become less effective as higher rates increase government interest expenses.
With high debt-to-GDP ratios, fiscal deficits drive money supply growth more than bank lending.
Future inflation depends on technological growth rates relative to money supply growth.
Lyn advises owning real, scarce assets rather than treasury bonds.
She warns that fighting technological disruption ultimately proves ineffective for governments.