The Breakdown

Danielle DiMartino Booth is the CEO and Chief Strategist of Quill Intelligence. Before that, however, after correctly predicting the mortgage meltdown, she was called upon to serve and spent 9 years as an advisor to the President of the Federal Reserve Bank of Dallas. That experience led her to write “Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America.” In this episode, Danielle and NLW discuss: How the Fed went from simply corrupt to corrupt and broken Why we’ve been living through the largest experiment in monetary policy history Why interest rates are the lowest they’ve been in 5000 years Why COVID-19 was the pin, not the balloon  Why current Fed action compromises the Fed’s independence  Why the market structure incentivizes consumption and risk investment over savings Why risk investments have ceased to be risky because of Fed backstopping  Why a key concern going forward is a second wave of COVID-19 layoffs in industries beyond the obviously impacted

The Lebanese pound has lost at least 50% of its value since last year. 220,000 people have lost their jobs. Food prices are up 58%. An estimated 75% of the population needs assistance of some kind. And over the last two nights, at least a dozen banks have been torched by protesters.    The catalyst? Not coronavirus, but a massive dollar shortage that is destroying an economy that relies on inflows of USD to function.  In this episode, NLW breaks down how Lebanon models what it looks like for a currency to fail, and why this likely isn’t the last emerging market currency to experience a similar crisis in the months to come.

As the COVID-19 crisis rages, it takes on new economic and political dimensions. The frames for many of the most important questions for the next decade are being set now, in this moment.  On this episode of The Breakdown, NLW is joined by Maya Zehavi, a long-time blockchain consultant known for her insightful domain-spanning takes.  They discuss:  How the COVID-19 health crisis overlapped with a political crisis in Zehavi’s home country of Israel  Why governments use times of crisis to take extraordinary powers How contact tracing apps have become a battleground for mass surveillance  Why the shift to localism from globalism creates new challenges  How the problems distributing stimulus are shaping the conversation around central bank digital currencies

The bitcoin halving is just two weeks away. While the COVID-19 crisis pushed attention off the momentous event for a while, the discussion is coming back fast and strong. Google searches for the bitcoin halving already exceeding the 2016 peak, despite almost no mainstream media coverage.  In this episode, NLW breaks down 4 archetypes of people within the larger debates around the bitcoin halving: Speculators - those who flock to Twitter to engage in endless rounds of debate around the efficient market hypothesis and whether the halving is priced in or not Fundamentals - those who believe that what matters about the halving isn’t the short-term price movement but the fundamental decrease in supply Miners - those who have to actually figure out how to make their business model work in the context of reduced issuance Symbologists - those who are focusing on the significance of bitcoin’s issuance reduction coinciding with QE infinity   

The full week's content in a single convenient long-run episode. Monday | Bearish or Bullish? What Oil, DeFi Hacks and Cash Hoarding Tell Us About Markets Tuesday | From Proof of Health to UBI: How Everything Changes Post COVID-19, Feat. Joe McCann Wednesday | The History of the Dollar System From Bretton Woods to QE Infinity, Feat. Luke Gromen Thursday | We Don’t Need Big Brother To Beat This Virus Friday | Why Bitcoin Is Freedom Money, Feat. Yan Pritzker

Yan Pritzker is the CTO and cofounder of Swan Bitcoin, an automated bitcoin only investing app aiming to be the best onramp to bitcoin. He is also the author of Inventing Bitcoin.  On this episode, he and NLW discuss: How immigrating from the Soviet Union taught Yan about capital controls  Buying bitcoin at $30 in 2011  Why the type of capital available shapes what type of startups entrepreneurs found Why venture capitals focused investments away from bitcoin  The emergence of a bitcoin only startup scene  Starting a startup during the COVID-19 crisis  Why bitcoin’s scarcity is its most important property

One of the key aspects of most plans to reopen the economy is digital contact tracing. This would be an apparatus whereby mobile phones kept track of the other mobile phones they had been physically proximate to, so that if someone were diagnosed with COVID-19, the at-risk people they had been in contact with could be notified. Apple and Google have proposed one plan while a European consortium is working on another.  At the center of the issue is whether contact tracing can be done in a way that doesn’t violate privacy and doesn’t open a Pandora’s box of new issues around the data governments have on their citizens.  Today’s episode of The Breakdown explores the crypto community’s response to contact tracing and why we don’t need big brother to beat the virus.

QE infinity. Corporate bailouts. Nudging UBI. The incredible economic phenomena going on now didn’t happen out of the blue. They are the byproducts of a key events spread across the 70 year history of the US dollar led global monetary system.  Luke Gromen is the founder of Forest From The Trees, a macro/thematic research firm. In this episode, Luke provides a TL;DR on those key events that got us to where we are today, including:  Bretton Woods and why the world went on a USD-based system rather than Keynes idea for a non-sovereign ‘bancor’ world reserve currency The move to the Petrodollar in the 1970s The financialization of commodities that started in the 1980s The monetary policy vacuum after the Cold War ended How a shift in executive compensation rules led to many of today’s problems with Wall Street The export of Treasury Bills as a business model The fallout of 2008 globally and domestically The end of Treasury Bill buying in 2014 Why the Fed is the only sugar daddy left

Joe McCann currently works in cloud and AI at Microsoft and has spent decades in tech, crypto, and open source communities. He recently wrote a piece called “A New, New World Order” all about the second and third order effects of Covid-19.  In this conversation, Joe and NLW discuss: Localism and the beginning of the end of globalization The return of domestic manufacturing  The ‘Roaring 20s’ of Inflation The inevitability of Universal Basic Income in response to inflation QE infinity and the US’s nationalization by proxy National healthcare as national security and why microbes are this decade’s terrorists  Proof of health, and why it’s likely to be implemented on a blockchain

It’s hard to look at recent news from both crypto and traditional markets and not feel like we’re getting pretty mixed signals. Stocks have been recovering, but oil is hitting historic lows. DeFi suffers a major hack over the weekend, but Coinbase sees a major spike in $1200 transactions right as $1200 stimulus checks hit. Cash hoarding is giving pretence for eliminating privacy-preserving money, but one of the world’s most successful hedge funds has authorized investment in bitcoin futures.  On today’s episode of The Breakdown, NLW separates bullish from bearish signals for the strange in between times.