Forward Guidance Lyn Alden: The Monetary Order Is Broken
4 snips
Oct 5, 2023 
Lyn Alden discusses the recent bond market meltdown and explains why our monetary order is broken. They explore the pros and cons of hard money and how Bitcoin could provide a solution. They also touch on topics such as the risks of buying bonds, the state of the US economy, commercial real estate, and the lack of transparency in fiat money.
AI Snips
Chapters
Transcript
Episode notes
Bond Market Meltdown
- The current monetary tightening, amidst large government debt and deficits, resembles the 1940s without yield curve control.
- This tightening could lead to disorderly markets and interventions, similar to the UK gilt market break in 2022.
Financial Stability Factors
- The speed and level of yield changes, along with supply and demand dynamics, determine market stability, not just the absolute yield level.
- Disorderly conditions arise when issues spread to equities, forcing asset sales and potentially impacting smaller banks and commercial real estate.
Unusual Bond Market Behavior
- Bond markets are behaving differently than expected in a decelerating economy with rolling-over PMIs.
- High Treasury supply, reduced foreign and bank demand, and reliance on domestic non-bank entities contribute to this unusual behavior.