Bankless 48 - Death of Dollar Dominance | Lyn Alden
Jan 18, 2021
Lyn Alden, a savvy macroeconomic analyst, offers keen insights into the shifting landscape of the US dollar and its global dominance. She discusses how economic events influence societal unrest within the US, highlighting the fragile nature of our financial systems. Lyn delves into inflation's potential impact on various assets and explores Bitcoin's role in value storage amidst these changes. The conversation also navigates the evolving significance of Ethereum in decentralized finance, making for a compelling examination of future investment strategies.
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Systemic Parallels
- The 2008 financial crisis was a private debt bubble and banking crisis.
- The current crisis is a broader solvency issue resembling the 1940s, potentially leading to an inflationary environment.
The 2020s: A Devaluationary Decade
- Currency devaluation is expected in the 2020s due to structural fiscal deficits and high sovereign debts.
- Policy responses, like quantitative easing, often lead to inflationary outcomes, addressing initial shocks but creating long-term issues.
1940s: A Case Study in Currency Devaluation
- In the 1940s, despite no defaults, US treasuries lost roughly a third of purchasing power due to inflation.
- Equities and commodities outperformed during this inflationary period driven by massive deficits and fixed low interest rates.
