Tom welcomes Lyn Alden, Financial Newsletter Editor & Publisher, back to the show.
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Lyn discusses global central bank policies and their effects on inflation. We now have a much different environment than what we had five years ago. The famous Powell pivot of 2018 may have been caused by the credit markets freezing up and not equities. They tried to raise rates until the risk of a recession ballooned.
It’s most likely that countries will continue to inflate their debts away because the only other option is to default. Typically, defaults only occur with countries who are unable to print their own currency. We should expect inflation to continue for some time and purchasing power to decline significantly.
Good forms of deflation comes from increases in productivity, technology, and improved energy systems. In a low-debt environment, things should get cheaper over time as we become more efficient. The bad type of deflation is when debt bubbles collapse, and we see a collapse of demand. Most economists see deflation as always bad, but in many systems deflation could be a good thing.
We’re entering a period where globalization is going to flat line or even begin declining. This will likely be a driver for inflation in the future.
Europe is going to have to focus on being a fiscal union, or they risk their monetary union failing to some extent. The United States works as a fiscal union, and the large expenses occur at the Federal level. States in the U.S. are relatively low debt. Most countries in Europe hold significant debt loads, which will be challenging.
We’ve seen energy prices rapidly moving up, particularly in Europe, rapidly well before the outbreak of war. Now we have additional risk factors in oil, wheat, uranium, platinum and nickel. The amount of currency creation and lack of capital expenditure on resource development are all drivers for the current issues.
Lastly, she discusses how the gold stock to high flow ratio can make a commodity easier to manipulate. This is because most investors are fine with only having a paper claim to the underlying metal.
Time Stamp References:
0:00 – Introduction
0:46 – C.B. Inflation Targets
2:53 – Fed’s Debt Endgame
7:01 – Today Vs. 1940s
9:52 – Good & Bad Deflation
11:56 – Soft Landing
14:17 – Rising Rates & The Dollar
20:01 – Deglobalization Impacts
26:48 – Europe’s Challenges
30:45 – Energy & Commodities
34:30 – Energy & Ukraine
38:30 – Green Energy & ESG
44:29 – Energy Policy Shifting?
46:26 – EROI & an Energy Cliff
49:18 – Demand & Commodities
50:45 – Risk & Diversifying
53:13 – Gold Stock to Flow
57:00 – Wrap Up
Talking Points From This Episode
– The Fed and why the U.S. will choose to deflate away debt.
– The differences between good and bad forms of deflation.
– Why globalization is likely going to flat line or decline and that will increase inflation.
– Problems in Europe around lack of fiscal policy agreement and there continue energy issues.
Guest Links:
Twitter: https://twitter.com/LynAldenContact
Website: https://www.lynalden.com/
Lyn Alden is editor and publisher of LynAlden.com, where she has both a subscription and a free financial newsletter. She says, “Her background lies at the intersection of engineering and finance.” Her site provides investment research and strategy, covering stocks, precious metals, international equities, and alternative investments, with a specialization in asset allocation. Whether you’re new to investing or experienced, there’s a lot there for you.
Lyn has a bachelor’s degree in electrical engineering and a master’s degree in engineering management, focusing on engineering economics and financial modeling. She oversees the finances and day-to-day operations of an engineering facility.
She has been performing investment research for over fifteen years in various public and private capacities. Her work has been editorially featured or cited on Business Insider, Marketwatch, Time’s Money Magazine, The Daily Telegraph, The Philadelphia Inquirer, The Street, CNBC, US News and World Report, Kiplinger, and The Huffington Post. She has also appeared on Real Vision, The Investor’s Podcast Network, The Rebel Capitalist Show, The Market Huddle, and many other podcasts. She is also a regular contributor to Seeking Alpha, FEDweek, and Elliot Wave Trader.
23 Comments
Lyn Alden's favorite song is dude looks like a lady!
Lyn is top shelf, likely top spot when it comes to reasoned macro analysis.
Lyn is outstanding to listen to every time. I’ve heard her a few times compare the 1940s to today based on our debt to gdp. If you take a snapshot of both periods they are very similar. Inflating our debt away like back then is probably the only way to fix our current debt to gdp problem. But there are 2 big differences I see that is going to make it difficult. First is our current governments budget deficit which Biden will have to get a handle of, but won’t. So the debt will continue to grow. Compared to our old leaders the USA would only have a deficit during war time. The second difference is our flattening population growth and aging population compared to the population explosion in the past. Today our GDP won’t grow as fast as it did in the 40s because of this and actually it will probably decrease or at best flatline. So this debt to gdp issue will be here for a long time. Our leaders for the past few decades have been straight up fools.
Does she really think bitcoin is an inflation hedge?
There is no meaningful answer, if there is no courage to point out errors, it is a disease of the Democrats, where nobody is responsible for any wrongdoing. The joke with the QE is it benefits the 1% and when tightening it affects the 99%, so just kick out the FED, it is a waste of taxpayer money, and why is there indecision, because the official has a hand in the payroll?
It is rare you notice such a big difference in intelligence between two individuals LOL
Lyn, a beautiful mind
Is this a boy or girl lol hard to tell
love Lynn. thanks for having her on.
Lyn is amazing
This show is so underrated honestly.
Despite the economic downturn, I'm so happy 😃. I have been earning $60,000 returns from my $7000 investment every 13 days ……☝️☝️☝️☝️☝️☝️☝️
If you really want to become better informed then listen to Lyn, if you want some get rich quick scheme listen to the pied pipers with an agenda.
The snakes sheds it skin again
The Fed is abiding by “The Plan”…………….
It's hard to take someone seriously when they clam bitcoin is an inflation hedge when there is literally NO proof to that claim.
Bitcoin, since inception, has followed the NASDAQ but only on steroids.
1 experiment is worth a thousand expert opinions. Simply overlay the performance of bitcoin with a chart of shadowstats inflation history if anyone doubts this (not that mindless HODL'ers care about facts and evidence.).
Real inflation at around 20% while Bitcoin DOWN over 50%. AWESOME inflation hedge!
The wisest thing that should be on everyone's mind currently should be to invest in different streams of income that doesn't depend on the govt. Especially with the current economic crisis around the world. This is still a good time to invest in Gold, Silver and digital currencies (BTC,ETH…)
Great job as always Tom! This channel is the best
Always a pleasure hearing Lyn speak. She knows her stuff.
Her mind works so fast. It's scary and incredible at the same time
I smashed the like button.
I just finished reading >Outliers<. In it he explained that 20% of the world's top billionaires in the 1900's were all born in the US between 1830 and 1835. He explained that it was a statistical anomaly and that the reason was for massive societal changes during the civil war, 1865, that allowed them to capitalize on them as they were in their prime working age of 30-35. In relation to Fourth Turnings, that was one then. We are in one now, we have been for over a decade. As a 35 year old who isn't 45 and vested in the old ponzi schemes that are housing, stocks, bonds, and SS I am able to capitalize with my full potential of the destabilization of remonetizing money. A 25 year old is not at a high enough earning potential to make major investments. This is literally the opportunity of a lifetime. And if you believe The Sovereign Individual, this is the opportunity of five centuries. The world will change in less than 10 years and one has to only see conjob 19 to see that governments don't care about your safety. As they realize they don't have the money for pensions they promised everyone they will eliminate their liabilities. Unfortunately those liabilities are you and I. Think for yourself and put yourself on the Bitcoin Standard! I buy and just trade long term more than ever, I have made over 19` btc from trading with Shirley Bagshaw in few weeks this is one of the best medium to backup your assets incase it goes bearish. Technical analysis is my second languageYou can reach Shirley on ͲeIєɠɾαm👉SHIRLEYBAGSHAW
Is Lyn the smartest Macro commentator on the a web? Certainly the most erudite and easiest to understand. Thank you both for a very helpful discussion. 🙏🏻