The Breakdown

The conventional wisdom is that central banks are the most important economic actors in the world. Markets hang on their every word.  Yet, what if that power has less to do with actual monetary policy and more to do with how the performance of that policy creates a self-fulfilling prophecy as market actors respond to media coverage? Jeff Snider is the head of global research at Alhambra Investments. In this conversation, he and NLW explore: How the Fed lost the ability to even determine what the money supply is. How the financialization in the 1980s exacerbated monetary confusion. Why the most important force in the global economy isn’t central banks but the eurodollar and shadow banking system. How the eurodollar and shadow banking sector creates a drag on real economic growth. Why the conventional wisdom and “central bank savior” narrative around 2008 was dead wrong. The problem with “survivor’s euphoria.” Why “money printer go brr” is actually a flood myth. 

Every day that protests continue and the stock market goes up, more people ask what the disconnect between markets and the real economy is. In this episode of The Breakdown, NLW peels back the story of today’s economy by looking at five numbers: The growth of the S&P500 since the March 23 low Current unemployment stats and a Bloomberg Economics estimate of the number of jobs at risk The performance of the S&P500 in 1968, one of the most tumultuous years in American history The total percentage of the world’s debt denominated in dollar terms The number of flights between the US and China by Chinese airlines going forward

Alex Gladstein is the chief strategy officer of the Human Rights Foundation. He is a powerful voice for the role of bitcoin in combating authoritarianism around the globe.  In today's episode, he and NLW discuss:  What the protests tell us about the state of democracy in the U.S. The potential impact of protests and COVID-19 on surveillance norms  The potential for a "biological Patriot Act"  The implications of China's push to absorb Hong Kong  The relevance or irrelevance of China's digital currency The role of bitcoin in promoting freedom

Cities around the country have been engulfed in protest in the wake of the murder of 46-year-old black man George Floyd. There is an intense battle for the narrative around the protests. Are they legitimate outcries against institutional racism and police brutality? Is the looting covertly being driven by white supremacists on the one hand or ANTIFA on the other?  In the Bitcoin community, some have plumbed the “Bitcoin Fixes This” meme to argue that the core underlying issue has to do with a monetary system that structurally creates inequality. Others have clapped back against pushing that meme in this moment.  In this episode of The Breakdown, NLW looks at: What bitcoiners are trying to say when they apply the “Bitcoin Fixes This” meme to this moment. Why the current system structurally exacerbates inequality. Why the meme fails to capture additional economic, political and power dimensions of what’s going on. Why the meme in this moment might feel so out of place as to inspire the opposite of its intended effect: turning people away from bitcoin rather than making them want to learn more. Why Satoshi’s “If you don’t get it, I don’t have time to explain it to you” quote is the most misused and abused of his sayings. Why complexity and nuance, not memes, are needed now.

The week's episodes in one convenient file.  Monday | Best of April/May (not included in Weekly Recap)  Tuesday | Deglobalization and Other Narrative Violations, Feat. Geoff Lewis Wednesday | Why Innovation Matters (and How Not to Screw It Up), Feat. Matt Ridley Thursday | The Geopolitical Implications of a Too-Strong Dollar, Feat. Brent Johnson Friday | The Battle for the Future of Money, feat. Lawrence Summers, CZ, Michelle Phan, the Winklevoss brothers, The Chainsmokers and more. [Money Reimagined Episode 4]

As the economic dimension of the COVID-19 crisis comes into clearer view, what have we learned about the battle for the future of money? Does the dollar reign supreme? Are within-the-system competitors like the euro or China’s digital yuan gaining ground? Does an outside the system alternative like bitcoin stand a chance?  Over the last month, the “Money Reimagined” series has looked at the battle for the future of money.  Episode 1 focused on the dollar and why it is simultaneously stronger and more set up to fail than ever before.  Catch up: Why the Dollar Has Never Been Stronger or More Set Up to Fail Episode 2 was all about the obvious contenders to replace the dollar such as the euro or China’s currency, especially as they race towards a digital yuan. It also looked at where Facebook’s Libra might fit in the mix. Catch up: The Rise of the Dollar Killers Episode 3 looked at one of the most unique features of this modern currency battle - the fact that there are fundamentally new systems like bitcoin in the running. Can a non-sovereign currency actually be more relevant than global fiats?  Catch up: Where Bitcoin Fits in the New Monetary Order This final episode of the “Money Reimagined” series checks in on each of the previous episodes but brings a new set of voices to the mix. Between May 11 and May 14, CoinDesk hosted Consensus:Distributed, a virtual summit featuring some of the leading lights in crypto, finance, economics and pop culture. In this episode, we hear from those voices, including: Lawrence Summers - former U.S. Treasury Secretary Christopher Giancarlo - former Chairman of the CFTC Michelle Phan - YouTube innovator and founder of Ipsy Chaoping Zhao - founder and CEO of Binance  The Winklevoss brothers - founders of Gemini  The Chainsmokers - Grammy-winning artists  Carlota Perez - influential economist   

You know the meme: Money printer go brrr. It means inflation right?  Not necessarily, says Brent Johnson. Since 2016-2017, Johnson has been arguing the big economic issue of our time isn’t inflation of the U.S. dollar due to excess money printing, but the havoc caused by a global system where the dollar keeps getting stronger and sucks up liquidity from the rest of the world.  As the dollar has strengthened over the COVID-19 crisis, his ideas look more prescient than ever. In this conversation with NLW, Johnson discusses: What the “Dollar Milkshake Theory” is  Why the implications of the theory stress him out, even though he created it Why everything is relative and no asset can be analyzed in a vacuum  Why we could see the dollar, bitcoin and gold rise at the same time  Why we can’t discuss macroeconomics without discussing geopolitics and even the military

Twenty-one different people can reasonably claim to have invented the light bulb, but Thomas Edison is the one we know about. Was it just good PR? According to Matt Ridley, it was because Edison was the progenitor of an “innovation factory” that didn’t just create things but brought them to market in a way no one else did.  Innovation is one of the most important forces in the economy, and arguably the most important driver of human prosperity over the last century. Yet, for most of its life, it has been viewed as some strange exogenous force, rather than as a discipline that could be understood.  In this conversation with NLW and Ridley discuss: Why it took so long for economists to take the study of innovation seriously  Why invention is different from innovation  Why innovation has tended to concentrate in geographically proximate areas Why free societies produce more innovation than closed societies (including empires) Why China’s innovation production over the last decade may be an exception that proves the rule of innovation thriving in freedom Why government winner picking is a terrible way to inspire innovation Why innovation policy led Matt to support Brexit  The rational, optimistic take on the future

The battle to control narratives is the battle to shape how people understand the world around them. But the traditional gatekeepers of narratives - the media - have never had more competition to shape what is perceived as truth.  In this episode, NLW speaks with Bedrock Capital founder Geoff Lewis about what it means to seek out opportunities in “narrative violations.” They also discuss:  Why de-globalization and “onshoring” are likely to be among the most important economic drivers in the U.S. in the coming decade Why the shift to working from home may be an overblown “narrative mirage”  How important questions of institutional decay have been co-opted by the culture war  Why independent, individuals in the media have more influence than ever Why we’re in a “narrative mirage recovery”

Highlights from some of the most interesting conversations on The Breakdown from the last two months.  4/1 - Peter Zeihan on why the world we’ve known for 30 years is changing forever 4/6 - Emerson Spartz on a moment of punctuated equilibrium  4/17 - Jared Dillian on the political football of stock buy backs 4/21 - Joe McCann on how financial engineering came to dominate Wall Street 4/22 - Luke Gromen on the genesis of the global monetary order and why the US switched off the gold standard in 1971 5/1 - Danielle DiMartino Booth on how the Federal Reserve moved from incompetent to corrupt  5/9 - Niall Ferguson on a shift back to a multipolar, multi-currency world 5/14 - Jeff Booth on why technology deflation competes with inflationary monetary policy  5/20 - Lyn Alden on the negative impacts of a too-strong dollar 5/22 - Tuomas Malinen on why dismantling the Euro may be the only way to save the European Union