The Breakdown - Lyn Alden on Money Printing, Bitcoin and the End of an 80-Year Debt Cycle

Episode Date: November 25, 2020

Today’s guest is Lyn Alden. Lyn is the founder of Lyn Alden Investment Strategy and one of today’s best-known and most-respected macro analysts. In this conversation, she and NLW discuss: Anti-deflation vs. inflation Why money printing is nonpartisan  Why we’re headed for deeper MMT experiments How she increased her conviction around Bitcoin (her journey in memes) Why the beginnings of a new, post-Bretton Woods era are starting to show  Find our guest online: Twitter: @LynAldenContact Website: lynalden.com

In addition to looking at the long-term debt cycle, which happens every 80 years or so, there's also a change in the global monetary system. The last change was about 50 years ago when we shifted from the Bretton Wood system to the petrodollars system. And so I think, you know, we're getting kind of early rumblings of the next system. Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by crypto.com and nexo.io and produced and distributed by CoinDest.

What's going on, guys? It is Tuesday, November 24th, and man, it is an exciting one out there today. Bitcoin at the time of this recording is at $19,321 inches from its all-time high of whatever you want to determine it, 19,6,000. 160,19,900. It's so close. And hell, by the time you're listening, it may already be there. If so, consider this episode my gift to you. I'm extremely excited to welcome back the person that I believe is the easy breakout star of the macroeconomics and finance world of 2020, Lynn Alden. Lynn has this sort of relentless intellect that has to dig into data to shape her perspective and is just so cogent when she explains things. Earlier in the year, we did a whole show on how the dollar's reserve status came to be and why it may no longer serve us or the world. Today, however, instead of looking to the past, we're looking to the future.

We're looking at why, regardless of the outcome of the election, the die was cast for the future of monetary and economic policy. We're looking at why we're likely to see a deeper flirtation and experimentation with the set of spending ideas gathered around MMT or modern monetary theory. And of course, we're talking about why Bitcoin is poised to be so essential in that moment. So without any further ado, let's dive into this conversation with Lynn Alden. All right, we are back with Lynn. Lynn, welcome back to The Breakdown. Hey, thanks for having me again. It's always great to chat with you.

I'm super excited. You've been writing up a storm as usual. So it should be a really fun conversation. Yeah, I think there's, I mean, there's so many topics to talk about. And that's, you know, one of the upsides of 2020, along with all the horrors, is that there's no shortage of things to talk about or things to analyze. Tell me about it. It is a podcaster's dream, I guess, in some ways.

But yeah, it's been crazy. And I thought maybe like a fun place to start, just, you know, there is so much, but we do have some of these inflection point moments, right? And so a couple months ago, you wrote about the elections. And obviously, we're post-election now, although still more chaos and up in the airness maybe than a lot of people would like. But I'd love to go back to that piece and what you were kind of looking at and maybe just kind of some of the aggregate sentiment that you had. I mean, it felt to me in some ways that while part of it was exploring what the data was saying that was different than narratives in terms of kind of market

performance under Democrats versus Republicans. A lot of the thrust of that was actually about this longer term debt cycle that was really operating almost entirely outside of partisan politics. I mean, is that where you landed after kind of putting that all together? Yeah, absolutely. I mean, we've had basically the overall deficit in the United States as a percentage of GDP is basically blown out. It started to expand even before this pandemic, right? So in normal economic expansion, you have a reduction in the deficit as a percentage of GDP, and then in recessions, it blows out. That's kind of the classic cycle. However, starting around 2016, we started to have a rising deficit, even during an economic expansion.

And you have to go back to the Vietnam War about 50 years ago to find a similar situation in the United States. And so that's kind of how unusual that period was compared to, you know, recent cycles of the past 10, 20, 30 years. And so that was in large part based on, you know, a couple things. Most of it's structural. So most of it is demographic driven, right? So, you know, we build up all sorts of entitlement programs over the past century. And so some of those starting to become an issue. And in addition, the global dollar reserve, you know, status that we talked about in our last breakdown, basically that we had to export large portions of our industrial base in order to support the dollar as the global reserve currency, but basically running structural

trade deficits, that's starting to come home to roost as well. And so, you know, multiple of these factors were kind of just propelling just a massive shift in the way that we handle a deficit. And that was all pre-pandemic. And of course, the pandemic blew that out in a way that we haven't seen since, you know, you have to go back to World War II. and before that World War I to find a similar, you know, deficit as a percentage of GDP. So in a really real sense, this was a war on, you know, a pandemic or a war on, you know, kind of a, the economic shutdown we had. And so that's, most of that is nonpartisan, at least in the, in the near term sense.

And so basically the article was going down, you know, breaking down some of the traditional narratives about Republicans versus Democrats, but then also pointing out that a lot of this is just structural. And so that, you know, based on the outcome, there's really kind of minor changes around the edges, at least as far as economics are concerned. Of course, social issues can vary wildly depending on election outcomes, but the economics are in large part set in stone. Yeah, I mean, and it seems like in some ways, too, it's almost kind of by which mechanism we're likely to see the continued expansion of that debt. You know, does it come from, you know, social programs and stimulus versus continued tax cuts, right?

Yeah, exactly. So the whole point was with the Democratic outcome, you're likely to get more stimulus, but also you're likely to get a tax raise on some of the upper income earners. On the other hand, if you get the Republicans with a strong sweep, then you know, you're not going to get quite as big of a stimulus, most likely, but you're not going to get tax increases and you could get further tax cuts. And if you get some sort of divide outcome, then you get kind of the blend of both. So you get probably no major tax cuts or increases, but then you get kind of a muted set. stimulus, but that's on top of the fact that the deficit is already structural. Yeah, I mean, and that's what it seems like we're headed towards, obviously, is that that sort of heavily divided type of situation. I mean, are the prospects based on that just kind of nibbling around the edges of these long-term structural forces with not much likely to change? Or could you see something actually breaking through in a bigger way in terms

of some big structural change? I mean, that's more of a social political thing. And, but you You can, you know, from my perspective, looking at the economics of it, I can see just more and more cracks building in the system until something just completely blows out. And we have like, we just totally commit to a certain direction. And if you go to the work of Neil Howe, you know, the classic book, the fourth turning, right? So he kind of cataloged those, those massive generational cycles that happen. And, you know, so the first turning is kind of the growth period. And then you get the second and third turning. So those are all different phases in that generational cycle. And the fourth turn. And the first turning is kind of the growth period. And then you get the second turn. And then the first turn. And the first turn, is the crisis era, and that's where everything kind of gets destroyed and rebuilt. And it's a time of transformative change. It could be for the better, it could be for the worse. And if you look back over the long term, all those fourth turnings, I don't know if he knew that at the time, because he wrote that book in the 90s and it's been oddly kind of predictive. But all those fourth turnings line up with the apexes of long-term debt cycles. So, you know, the economic thing mirrors kind of the social thing. It's not really a coincidence.

And according to his methodology, I mean, we're probably going to playing out this whole shift well into the 2020s, you know, potentially for another decade. And so it has kind of a long time to work itself out into a resolution. So when you transfer from a fourth turning to a first turning, usually basically you get some sort of crisis happened. You have all sorts of conflict and then one side somewhere wins. And that's not necessarily left versus right. That could be establishment versus populace. that could be, you know, basically everything realigns and the winner might not look like any specific party that you see now, for example. You could have two parties blend together and another party emerge, things like that.

You basically tear down existing institutions and go forward with new institutions. So at least the next two years, you know, until the next midterm election, it appears that there won't be, you know, kind of major direction changes. We still clearly have a very divided opinion in this country of what direction we want to go in. but that's, you know, that's still a small part of, you know, probably how this whole decade's going to play out. And one interesting thing that I was kind of noticing from that piece of yours was around people's opinions or perspectives on debt and how much they cared about it. It seems like that has been going down rather quickly over the last couple years. Yeah, exactly. So I point out in the article that according to polls from those big reputable, you know, Gallup or Pew, is that, you know, essentially back in 2018, people cared about the debt and the deficit more than

they care about it in 2019, even though 2019 it got worse. And then they cared about it even less in 2020, even though it got, you know, like a dumpster fire. Like, it's as bad as it was in World War II. And people are like, yes, it's less big of a deal than it was in 2018. Just because people's narratives and mindsets change around what that means and they weigh that against, so what is the alternative, right? So are we not going to send out stimulus checks or whatever the case may be? be, they're weighing that against all the competing narratives, the surrounding environment at what's happening. And I also showed that, for example, if you look at, you know, Democrats and Republicans,

you know, if you ask them how the economy is doing, is it strong or is it weak, they, they change their opinion wildly based on whether or not their, you know, preferred president is in power, even though, like, I showed GDP over that time and it's like a straight line. And I showed, like, unemployment, it's like a straight line. And so you can debate that whole time, where, you know, you can debate that whole time, whether or not there's, say, you know, it's strong or weak, right? So I would argue that it's, it's been fairly weak over the past decade by most metrics. But there was no kind of major transition point, for example, between 2016 and, you know, 2015, 2016, 2017, right? So, but public perceptions can

change dramatically how we interpret the data. Yeah, and it's interesting, too. I think I remember reading that it wasn't just that people's perspectives on how good the economy was doing were colored bipartisanship. It was that they were more colored by partisanship over the last, call it, decade than they had been previously, if you go back 20, 30 years. Yeah, exactly. So, for example, under Bill Clinton, both Democrats and Republicans agree that the economy was strong, right? So we weren't kind of in two different worlds about how we see things. And then same thing under Bush. You kind of had a little bit more of a breakdown. You know, Democrats were a little bit more pessimistic in the economy. Republicans are a little bit more bullish. And you can kind of,

debate what ultimately the truth was, right? Because you know, you had kind of a boom there, but then it ultimately ended up being a bubble. So you can kind of debate at different snapshots and time, whether or not it was strong. But the point was you started to get more divergence among party lines. And then it really accelerated under Obama, right? So under Obama, both Democrats and Republicans, at least in the first term, agreed it was pretty weak, right, because we were coming out of the Great Recession. But as that went on for eight years, Democrats started to get more and more favor of about the economy, whereas Republicans stayed very, very low. And there was a very big divide. And then as soon as Trump won, Republican, you know, expect, you know, views about

the economy just went vertical, just completely went straight up in a month, even, you know, what changed in that month? And then same thing, Democrats, they didn't change quite through the extreme level, but they had a small dip. And that just showed basically that what party we're on, now you view the economy different. Everything's changed now just because of an election outcome three months ago. And it's not necessarily rational. It's not data driven, but it's how people operate. Yeah. I mean, and like, you know, the economy is a set of numbers and emotions to a set to interpret those numbers. That's why the narrative is so important as well. And I think one of the things that's really fascinating, too, just reflecting on a lot of what you've been writing, where we are in this

longer term debt cycle. And also this question of partisanship is it feels like part of the competition right now in the economic sphere is a competition for new ideas in like basically ways out from here, right? And I think that it's probably not an accident that you see Bitcoin rising simultaneous to effectively MMT as kind of the de facto policy rising in that these are, you know, even if you, they're so opposite, but they at least offer a coherent theory. for what the future might look like, you know, or a different way of approaching economic policy than sort of muddling through the same old thing. Yeah, I mean, we've been in basically a 40-year disinflationary cycle in most of the developed world, which means we still have inflation, but it's been diminishing inflation, especially among consumer prices.

So we've had kind of asset price inflation, but not really consumer price inflation. And we've had, you know, kind of this era of tighter fiscal policy, but, but, but increasingly loose monetary policy. And if you look back in history, normally we get, after we hit kind of the zero bound, you know, in the interest rate, we even go mildly negative this time, which is a new phenomenon. But after you get kind of that, that ultra level, you basically used up all of your monetary policy, then you shift more and more towards fiscal policy. But then the monetary policy doesn't go away. It just takes a back seat. And the monetary policy's role is to monetize those fiscal deficits and make that possible. So if you look at the United States,

for example, you know, we did multiple trillions of dollars of deficit spending this year. And so the question is, where did that money come from? Right. So if you look at, you know, historically, the United States has a global reserve currency. Foreigners buy that, buy a lot of those treasuries, right? So they, you know, foreign sector, either the official sector or the private sector buys a lot of those treasuries. But they bought almost none of those treasuries this year.

They bought a very small percentage, like a single digit percentage. And at the same time, you know, there's just not a lot of. kind of domestic balance sheet space for them either. And so what we saw was that the Federal Reserve bought, you know, over half of the amount of new treasuries issued. And then also some of the banks as well. So the commercial banking system also, you know, they are at record high treasury holdings. And so we kind of, we go to this kind of newer system of just kind of structurally larger deficits. And then those are in large part monetized. And we have to go back basically to the end of the long-term debt cycle that preceded this all the way back to the 40s to find a similar outcome.

I feel like if I had to like TLDR, a lot of your writings from the last half of this year, it's basically like, guys, you have to talk about fiscal policy if we're going to talk about the impact of monetary policy on inflation. Yeah, exactly. Because the whole narrative back in 2008, 2009 was, oh, no, the central banks are expanding their balance sheet. They're printing money. We're going to have hyperinflation next year.

And when that never happened, you know, people were questioning, why didn't that happen? Why, you know, what was, what did that balance expansion mean? Why did it not translate into consumer price inflation? Now, you can argue certainly that it transferred into asset price inflation. But even if you look at, say, you know, the more Austrian definition of inflation, which is just expansion of the broad money supply, you barely even saw that compared to how it was, you know, in the years leading up to that. And that's because most of that quantitative easing went to recap.

capitalized the banking system. And so, you know, most of that was kind of de-leveraging banks rather than getting money out to the broad public. And so that's the same thing we saw actually back in the 1930s where, you know, you devalued the dollar versus gold, and you did get a reflation, right? So I call it anti-deflationary, right? So it was enough to end the deflation that was happening, but it was not enough to cause kind of massive inflation. And mostly what it did was recapitized the banking system. And so in that sense, the 2010s and the 1930s were very similar. But then in the 1940s, that's when you had massive deficits that were monetized by the central bank. And that's when you had an absolutely huge increase in the broad money supply. And if you go here in the

2020s, that's what we've seen more of, where we saw, you know, very large deficits that were monetized by QE. And instead of that QE staying in the banking system to de-leverage it, that all got out into the broad public because banks came into this crisis already kind of well capitalized. So it wasn't about recapitalizing banks. It was basically about monetizing deficits to get out into the public. And that's a very different phenomenon. Part of the crux of this piece where you were writing about money printing and the difference between anti-deflationary rather than outright inflationary was basically in some ways

we misread or many people misread the actions in 2008, 2009, 2010 as likely to produce inflation. But because of that, we've almost overcorrected in our expectations now in terms of assuming that it won't put inflationary pressures on the system. Yeah, I think so. I mean, people always fight the last battle, right? That's, it's something we're all always have recency bias. So we're always, you know, thinking that whatever recession is happening is going to be like the previous recession or the previous two recessions. And so when people look at that, now they say like, oh, central banks can't create inflation.

You know, how could we possibly generate inflation? They've been unable to do it for decades. But if they don't realize that basically there are totally different mechanisms happening now because it's more of a physical phenomenon. And so, but even me, I'm still saying it's not like, you know, hyperinflations around the corner. In fact, hyperinflation is never really part of my base case. So I'm looking more towards a structural trend shift towards higher inflation, whatever, you know, I think there's a really wide variance for what that could be.

But I think the key thing is realizing that basically there's major differences in the mechanics of what's going on and kind of how QE blends with fiscal policy. And none of the previous recessions over the past 20 years are going to be kind of a signpost for what's to come. You have to go really back much further to the end of the previous long-term debt cycle to find a similar scenario most likely. And one thing I described is anti-deflationary is, and I think the author Jeff Booth goes into this a lot. I think he covers this well, which is basically that technology and other forces are incredibly deflationary. So the kind of the long-term arc bends towards deflation. So as we get more productive, things get cheaper, as we do things like outsource labor, it puts pressure on wages. As we get high debt levels, that tends to be deflationary demographics.

if you have an aging population, a slower growing population, that's deflationary. So we have all these deflationary forces. But then pushing back against that, you have inflationary monetary policy. And so during those, you know, kind of the end of a long-term debt cycle, you get the banking crisis. So we had that 1930s. We had that again, you know, in the in the 108-09 period. And so what happens is you would otherwise get this massive deflationary shock, but that's where they come in and they recapitalize the banking system.

and they have that inflationary impulse against that deflationary outcome. And so rather than in creating inflation, it just stops the deflation and it's anti-deflationary and gets us back towards inflation, like a mild inflation, like the 1 to 2% that they've been reporting officially. But if you look at monetary supply growth, it's more like 5%, and you get kind of back to that trend. But it's not until like the subsequent decade when you get the broader bailout, the broader kind of, you know, the sovereign debt crisis.

That's when you get the more inflationary outcome. Yeah, I mean, so this is an interesting question, right? You point out that there are so many deflationary forces happening simultaneously with these new things that could be inflationary, but really they're just keeping the rails on. What are the triggers that could shift it into those periods? And again, acknowledging that we're not talking about some Venezuela or Zimbabwe hyperinflation scenario. But where do you see that shifting? Is it restored confidence? and all of a sudden people spending this money that's floated into the system?

Is it something more structural even than that or new types of policies? Yeah. So, I mean, it's a couple different factors. So inflation in general, so I defined it as three different types, right? So there's the Austrian definition, which is just an increase in the broad money supply. That's, for example, what Michael Saylor's been referring to, I think, very correctly in a lot of his interviews that he's looking at the expansion of the broad money supply. And if you look back, you know, this year, we increased broad money supply in the United States

by about 25% more or less. And even over the past decade, it's average, depending on what time frame you look at, it was averaging like 5% to 7% per year. And over the very long term, broad money supply growth tends to precede consumer price inflation growth. But you still need a couple triggers

to kind of convert that into consumer price inflation. So that's the one form is monetary inflation. The next form is asset price inflation, which is where you get, you know, it's kind of like inflation for rich people, right? So most financial assets, you know, it's like the 80-20 rule. Like most financial assets are owned by, you know, the top 1%, the top 5%, the top 10%. And so that's that stocks, bonds, real estate, gold, you know, all these different assets.

And those tend to, you know, go up in valuation as industry rates go down very low. And so that's what we've seen over the past couple decades. And in particular this past decade. And then the third type of inflation is consumer price inflation. That's where the actual, you know, the typical good. that we interact with, you know, those go up in price pretty significantly. And for that, basically what you need is some sort of supply demand problem. And so we saw localized examples of that this year. For example, grocery prices went up because we suddenly, you know, all of our supply

chains, we get some of our food from restaurants, some of our food from grocery stores. And if all restaurants shut down, we all go to grocery stores, the supply chains can't convert quickly enough to that. So we get a supply demand mismatch. And, you know, there's no toilet paper in the, in the aisles. And, you know, people were willing to pay double for it. And, you know, and you get that kind of inflationary impulse, but that's somewhat transient. Some of the more structural forces are, you know,

we spent the last several decades outsourcing labor to emerging markets. And that trend is, you know, showing signs of peaking and potentially reversing. And so, you know, we basically exported inflation, right? So instead of, you know, having to pay our workers more and more to keep up with, you know, their health care costs and, you know, all these other kind of inflationary impulses that they're having, we made them compete with workers from Bangladesh or workers from China or Vietnam, whatever the case may be.

And so that's kind of pushed down wages. So if you get that reshoring of labor, you could kind of end that somewhat deflationary outsourcing cycle. The second thing is commodity scarcity. So we've had a period of significant commodity abundance. So in particular, it's been in energy because in North America, you know, cheap near zero interest rates have. have encouraged all sorts of kind of reckless drilling. So the entire shale industry has pretty much been free cash flow negative for a decade. And investors have lost money.

But the outcome of that is we had basically a lot of oil supply, a lot of gas supplies. We've had really no kind of significant energy, you know, shortcoming. Same thing is, you know, less extreme. But if you look at copper and uranium and other kind of metals, you know, we had kind of a surplus built up from a decade ago and we've been kind of chipping away at that surplus. But some of those are getting tighter and tighter. And there's not kind of a lot of new money to find more exploration at current prices. And so if you were to get that kind of more commodity scarcity in the 2020s, then some of this

kind of rapid money supply growth can convert into higher commodity prices, and that can boost kind of broader commodity prices. So basically, I mean, what it sounds like is another kind of TLDR for a lot of your work is we talk in very broad terms when we probably need more specific understanding of how these forces are playing out. Yeah, exactly. And I mean, people even, you know, one of the first things of a discussion is to define terms. And so you often see, for example, someone say, that's not inflation, this is inflation. And we say, well, let's step back.

I mean, both, we want terms for both of these things. We want a term for what happens when the money supply goes up. So we want to call that something. We want something else, you know, if we define a basket of goods, we want to know if that basket of goods is fluctuation. putting in price, we need a term for that. And we also would like a term for asset price inflation. So whatever you want to call them, you know, I've called the monetary inflation, asset price inflation, and consumer price inflation.

But what the case may be, you want to have, you know, at least define your terms when kind of separating out the different kind of nuances, the different types of inflation. Or, you know, it's kind of the same phenomenon, which is really kind of, it kind of all links back to growth of the money supply, but then it's an expression of where that growth of the money supply shows up. This episode is brought to you by crypto.com, the crypto super app that lets you buy, earn, and spend crypto all in one place and earn up to 8.5% per year on your Bitcoin. Download the crypto.com app now to see the interest rates you could be earning on BTC and more

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Get started at nexo.io. How would you say or how would you describe shifts or entrenchments in people's sort of economic, political positions over the last six months? And what I mean by that is have you seen a lot of folks change their tune around what they're expecting in terms of the go forward? Have you seen a lot of people double down on their positions? I'm kind of trying to explore what happens next a little bit or what people think is going to happen next. And I'm interested in where you see the conventional wisdom shifting around, call it the mainstream of business of economics. So I think, you know, we've had some of a normalization of massive deficits. So, for example, people back in 2008, 2009 thought those deficits were big.

And then they were dwarfed by what happened this year. And so, you know, packages back then, you know, were like $700 billion and people were like, this is the biggest, you know, kind of aid package we've ever seen. And then now, like, a, you know, quote, skinny bill is $500 billion. And, you know, they're kind of like, you know, just like a trillion dollars is like the entry fee into like a quote real stimulus. And like two trillion is like the ones that like that's the number that Democrats could could maybe come down to. And Republicans could maybe go. And it's just like we've, and like even earlier this year with the CARES Act, you know, you had you had a bipartisan bill that was over $2 trillion. It was passed in a matter of weeks.

and that just shows that, you know, the kind of what we, what we normalized as a large stimulus has, you know, gone up by an order of magnitude. And so we've become more kind of normalized to that. Same thing, you know, you had the publication of the deficit myth by Stephanie Kelton.

And, you know, we had the tweet of like Ice Cube, like, you know, he's reading the book and like sharing the book and saying deficits don't matter. So we've kind of changed the narrative. It kind of goes back to our earlier conversation of, you know, we have numbers on one side, but on the other side, we have how people interpret those numbers. So we have kind of changing views around the deficit or changing views around these things. And, you know, just people always, again, you always fight the last war.

So if you had kind of a long period of disinflation, you can think that no matter what you do, you're not going to cause inflation. And same thing, if you go back all the way to the 70s and 80s, you know, when you had inflation, they were kind of like, oh, we'll never build a fix this, we'll never get inflation down. And of course, people were saying that right up to, you know, that was the, right before they fixed inflation, that's when people were the loudest is saying it'll never be fixed. And then Polvocker came in and said, you know, here's like doubled it to interest rates. That'll fix it.

And so basically we kind of hit these extremes where we kind of carry what happened over the past, you know, decades to its illogic extreme, whether that's negative interest rates or whether that's ideas that like we can never cause inflation or the deficits don't matter. And it kind of brings us to that point. And so I think that that's kind of the biggest takeaway of this year is kind of the normalization of different numbers and a normalization of, you know, things like direct stimulus checks or, you know, all sorts of things like that. Yeah. I mean, it's interesting because, you know, back in the day, these were battles that were fought in many ways in think tanks, right? In the sort of Washington establishment, that's where economic, like the Chicago School of Thinking was a battleground intellectually.

Now it's on Twitter, right? And Stephanie Kelton, it's not an accident. I don't think it's very good at Twitter, right? She's, that's, she understands that that's the arena for these ideas. Bitcoiners are very good at Twitter. I mean, depending on, you know, your perspective, I guess sometimes. But, and I think it's interesting, you know, I guess one of the questions, which is more rhetorical, although I'm interested if you have thoughts, is which, like, it feels to me at this point almost inevitable that, the broad set of ideas encapsulated by MMT works its way into the economic orthodoxy because it is very appealing from a political from a short-term politician's perspective, regardless of who you are or what party you're a part of. And second, because I think there's a legitimate sense of hypocrisy on where bailouts have been allocated over the past 12 years that wasn't resolved, right? I think it's fascinating to look at people like Matt Stoller, who's obviously, you know, kind of pretty far left. And his biggest critiques with people like the Obama administration is that failure to hold accountable the banking establishment for 2008.

And so anyways, I wonder what parts of those ideas. Will it just manifest as UBI? Will it not get to UBI? Will it manifest as, you know, Hugh Hendry's deeply negative interest rates if they make him and Joe Rogan Fed Chair, you know? I'm really fascinated to see which of those ideas move further into the mainstream. I mean, that's going to be an open question of the next several years is which subsets of these ideas take hold. I think, you know, again, also people kind of rationalize what's already happening. And so I think when you're saying next year, when, you know, it's funny, if you look at the Congressional Budget Office, you know, budget estimates, right?

So they're the ones that, you know, that always predict that, you know, right after this year, we're going to fix the deficit and narrow it. And of course, they never predict a recession. And so even, you know, if you look back a year ago before this pandemic, we had the longest economic expansion in U.S. history. It was like 10 years. And, you know, if you look at their budget productions for the next 10 years, they were assuming no recession.

So, you know, we were going to be like Australia and be like one of the few countries ever to go 20 years with no recession just because they never, it's purely linear in their view. And again, if you look at it now, right, so we had this big vertical movement. move in the sovereign debt to GDP in the United States. And they're like, oh, but it's going to level out now and like no problem. And like, you know, GDP growth is going to go up and deficits are going to be like narrow again. And so we're going to have this flat period, you know, and it's not until like the 2030s where you have a problem.

And that's kind of a classic math of the congressional budget office. But I think that's not going to really kind of play out. So the next several years, I think deficits are going to continue to be quite wide because we went into this crisis with 5% structural deficits. And then on top of that, we have stimulus. We have tax reductions because, you know, people are out of work, all sorts of things like that. And so I think when people are kind of constantly being hit by these large deficits,

you know, the narrative is going to in some way shift around that to justify that. Like, well, you know, there's no inflation. And so deficits don't matter. And I think that also, in addition to the work that people do on Twitter to kind of, you know, kind of actively change minds, we also, you know, a lot of people change their minds based on what's happening. And I think that's going to be a phenomenon that we see that I think that's kind of underappreciated at the moment. Speaking of changing minds, this has been a very interesting year for the Bitcoin narrative.

It really plugged into exactly this. And in a lot of ways, I feel like one of the main beneficiaries of the normalization of these large numbers and of the normalization of this kind of broader set of MMT-type things will be Bitcoin as an alternative. We talked about Bitcoin the last time you were here, but I think that it's probably fair to say that your conviction has grown since then. So you updated your kind of piece about why Bitcoin, why now. And I'd love to just kind of explore that briefly for people who haven't seen it or maybe who kind of need a refresher about kind of how you see the asset and how that view has changed or kind of grown this year. I've now published three articles on Bitcoin.

And the first one was back in 2017. And that was autumn of 2017. And so a lot of people at the time had really polarized the views on it. And so whereas I was kind of in the middle. So I saw the technology is very interesting. I got the idea of it. I saw why it was valuable. But, you know, I still had some concerns about it.

I had, you know, we just had that massive kind of year-long run up. So, you know, euphoria was high. And so I had concerns about, you know, the price sustainability. And then also, I mean, that was the year of the forks, right? So we had this kind of debate is, is Bitcoin a store of value or is it a minimum exchange? And so I kind of analyzed it several different directions. I was worried about dilution as we had this, you know, this big rise of alts that were happening. I was kind of like, is, is the market cap going to be diluted or is Bitcoin and a couple others going to be able to retain market share? That was kind of the main concerns back then. And so in some ways, that was right because if you look at the next two and a half years, from that point, Bitcoin did, you know, underperform some of the other major asset classes, right? So it underperformed equities. It underperformed other things like that because it was kind of in that bare market. But then earlier this year in April, when I, when I've been re-looking at the space, I saw that, okay, it basically, you know, it's roughly at the same price that I looked at it back in 2017, but it's been significantly de-risked. Right. So, you know, the question of the forks has mostly been answered, right? So the market kind of said which protocol it prefers, and that's Bitcoin. So it also kind of solidified around the idea of a store of value more so than a medium of exchange and that the ecosystem of businesses around Bitcoin continue to grow. And we've seen more and more kind of institutional custody, you know, kind of technologies grow.

And so the overall kind of bullish potential and the risk associated with that was much improved. So I was more bullish. And then, of course, as we had this year 2020 play out, the macro backdrop only became more and more favorable to it. So by the time I went from spring to summer, I was even more bullish on it. And I wrote that article in July, I think it was probably three reasons on buying Bitcoin or investing in Bitcoin or something like that. And that one got a lot of press because that kind of laid out, it kind of updated my previous foundation of how I view Bitcoin. And the whole idea was, you know, its network effect is very strong compared to all the other cryptocurrencies. You know, the halving cycle at this point is very favorable to it.

And the macro backdrop is very good for demand, the things we've been discussing in this kind of, you know, discussion here. And then recently, over the past month, I published another one, which is just, you know, seven misconceptions about Bitcoin. So again, it's kind of going back and it kind of adding to that previous. article and, you know, because I continued researching it over the, you know, the spring, the summer, the fall. And it's kind of, you know, looking at all the different risks and then it's kind of weighing them, which ones are kind of valid, which ones are, you know, 2015's arguments, like they want their arguments back. And kind of breaking those down kind of one by one and kind of sharing my views on them while trying to be fact-based. And a lot of, you know, part of how I view

myself in this kind of conversation is kind of a bridge between, say, like hardcore Bitcoin enthusiasts and more mainstream investors or institutional investors that want to understand the asset class in a way that kind of speaks their language. Yeah, it's super interesting. By the way, as a total aside, and I'll include a link to this, I was going back through your tweets from the past a couple months for this show. And you are very genuinely one of the clearest most cogent writers, not just in Bitcoin, but in kind of economics in general. And yet I still think that the meme you shared of like you in 2014 or 2015, you in 2017, and you in 2020 understanding Bitcoin is probably like the clearest articulation like then, you know, 6,000 words or whatever.

It's just a funny power of memes. But, but yeah, you know, one of the things that I've found really fascinating this year is as more folks from the macro have come in, there's a pretty common story of folks who are paying attention to the asset class early, which is a fear around 2017 of the network effects, right? And for those people who were very invested in the Bitcoin community at this time, the idea that you could be worried about that was heresy, right? Because it was so clear that, like, Bitcoin was going to win versus BCH and everything else. But I feel like there's been kind of an openness or an acceptance that that was a reasonable concern if you weren't deep in this space going back, you know, at that time, but that it's been largely

addressed, I mean, almost entirely addressed, you know, which I just think is a fascinating thing. I've noticed this over and over again this year, actually. Yeah, I mean, I think it's one of those things, if someone's deep in something, they might have a clear view of which is going to win. But basically, in order for Bitcoin to reach the next level of adoption or the next, you know, the next kind of zero onto its market cap, it needs to reach that wider audience. So it needs to basically be able to answer that question to people that, you know, don't look at the code every day of why Bitcoin and why not any of the other 5,000 cryptocurrencies.

And so back in 2017, that was a much harder dialogue to have with someone. And whereas in 2020, it's a much easier dialogue to have and say, you know, why specifically Bitcoin has a direct value? You know, why can't I make my own cryptocurrency? Why can I copy it? Why that one? And so you could still make the argument, of course, back in 2017, but it was just less clear. It was more murky.

Whereas in 2020, it's far kind of a cleaner and more simpler argument to make. Well, and I think, too, on top of that, there's, you know, obviously re-approaching all-time highs has everyone kind of plumbing for historical analogy. But it really couldn't be more different in some ways in terms of the explanation in terms of who's involved or who's getting involved in terms of the narrative, right? When we were in 2017, I mean, I was thinking about this, even in the context of random, you know, celebrities or, you know, delisters or whatever who pop up as Bitcoin. Hoddlers now, those people would have been starting ICOs in 2017. I mean, not the exact same people. Obviously, they have different conviction levels and things like that, but that category, like the way that they entered the space was, you know, my name coin that's going to, you know, democratize access to something, right? And it was like some idea, some big dream or whatever. And it was

mostly about the ICU. Whereas now you have like Sean Lennon popping up and talking about, you know, a tool for economic empowerment and people can't carry, you know, bars of gold on their back as they flee their regimes. And it's like, I don't care whether you're a celebrity or not. That type of narrative is just so different, you know? Yeah, I mean, it first hit the broad media tension back with that big kind of 2017 bull market. And so if you look at the chart of most other bubbles, you know, you hit that giant peak and then you go down and then you're dead forever.

Whereas Bitcoin going back up really changed the narrative. And, of course, people that were following the space longer or go deeper into it, you know, look at the log charts or look at other things. It's not the first bubble. It's not going to be the last bubble probably. But that was the first bubble where it just, you know, it hit the mainstream. It was all over C&BC every day for that, you know, the whole month of, you know, November and December. And so, you know, and back then, of course, you had all the alts going up.

And of course, I think, you know, you still have defy this year, right? So you still have kind of an echo of that. But it's a much smaller kind of, you know, less feverish thing. And some of the work I've shown is that in many ways this is, you know, in terms of Bitcoin, this looks a lot more like late 2016 or early 2017 rather than late 2017. You know, that's, you know, whether it's in terms of, you know, the momentum indicators or in terms of the number, you know, the spike in people searching on Google for Bitcoin, you know, whatever the case may be, it's kind of a, you know, also like where it is in the

halving cycle, for example, whatever kind of the narrative is or whatever kind of the math plays out, it still appears to be earlier in that particular bold move. and with less kind of feverish, you know, kind of aspects to it, somewhat more rational and more centered around Bitcoin and maybe a handful of others rather than just widely dispersed, as you pointed out. You obviously are talking every day to lots and lots of different types of investors, you know, both, you know, kind of through your content, but also specifically, right, giving presentations, advise and clients, et cetera. And have you seen this sort of similar uptick and interest from a different cast? of investor? I have. I mean, our views are always kind of colored by our own experiences, right?

So because people that reach out to me are people that read a lot of my material. And so a lot of them reached out and said, like, I didn't get Bitcoin until I read your article on it. Now I get it. Right. So I think that that was kind of my goal is to kind of take that subject and translate it to another audience, right? So my audience ranges from retiree investors to, you know, money managers.

to, you know, professionals that have kind of a significant income they want to invest. So it kind of runs that gamut from like high-end retail all the way to institutional. And so it wasn't kind of some of those people were already into things like Bitcoin, but it wouldn't have been a very large percentage. So bringing that to a wider audience, I've certainly, you know, got people saying that to me that, you know, it definitely helped them kind of see things. And then I've gotten further feedback ever since, you know, ever since, you know, micro-strategy bought Bitcoin.

I've had another class of investors kind of say, like, oh, is this real now? Like, is this so like corporations can buy this? And so that kind of further led to another set of questions. That's especially from the institutional side, you know, whether it's a bank board of directors that I talk to or, you know, other kind of, you know, kind of high net worth investors that reach out. And they, you know, they often cite the Michael Saylor purchase as kind of a major kind of a click in their mind of what Bitcoin means. Super interesting. I mean, that's one of the biggest things that will be interesting to see a year or two years from now is how influential that actually was. Because you added right at the beginning, you had people who were kind of seeing it as both ways. One, it was totally opening that door as a new category of investment, as legitimating it. You had another set who are much more skeptical who are like, people aren't going to care what this guy does. You know, like, he's already clearly like a very high conviction individual who's designed his corporate, you know, structure in such a way to allow him to do this type of thing. And kind of dismissive. And it seems so far, at least anecdotally, that it's a little bit more influential than I think the skeptics might have thought behind the scenes. I think so. And I think a lot of that goes down

to Siler himself. So when he, when, like, when I, you know, when it hit the news while that Microshattagogy did this. So I'm talking to like, you know, Preston Pish and others at the time. And we're kind of observing this. I actually added it to my portfolio, which in the hindsight, you know, worked out pretty well so far. But I didn't, you know, but so that was kind of interesting. I wasn't sure how far it's going to go because it's a small company. Many people have not heard of it if they're not kind of familiar with the specific industry that they operate in. But then Michael, Michael Seller himself has just been on countless podcasts. He's a very convincing individual.

And, you know, he describes things very descriptively, right? So, you know, whether it's a cyber hornist protecting Bitcoin or, you know, the massive kind of arc of startup energy that will last 100 years, whatever, you know, all of his kind of very illustrative ways of describing it. He's very articulate. And so I think the combination of how much money he put in, you know, but then if we had never heard him speak or we just, you know, we saw him do one or two podcasts and he was like really boring. That would have been, I think, a less of an impact than, you know, the outcome that we had with him kind of being everywhere and being very kind of descriptive. And, you know, I've been somewhat more cautious than others, I think, in predicting that corporations are going to flood into Bitcoin now, right?

So I was like, okay, so we got the micro strategy one. Then later we got the Square one, which was in some ways more telegraphed, right? So people often thought that Square would be one of the first obvious choices. And also they did it in such a way that more people thought, whereas they put a tiny percentage of their cash in a Bitcoin, which is kind of an easier decision to justify to your board of directors or do investors. Whereas the micro strategy one kind of came out of left field. people didn't, they didn't know the company or nor did they think a company who put all of its

cash in a Bitcoin. So, but now that we got those, we got the PayPal one, those were I think some of the obvious ones. But then I think there's a big question now is what's next. I mean, are other companies going to get on board or not? I'm not sure kind of what that time frame is going to be. So I don't necessarily view it as a floodgate of corporations coming in. They might or they might not. But it's also just, you know, even fund managers can now point to Michael Saylor. And so it actually in some ways could release that fund money before it releases the corporate money. So, for example, a hedge fund manager might point to Michael Siller before, you know, Microsoft points to Michael Siler and does it. I think that's kind of how I'm viewing it.

I think that's right. And I think also it's interesting. It's like there's this sort of collective derisking of some version of an experiment in this space where the internal advocates for this asset are just getting more and more both, you know, credence, but also models, right? I mean, in some ways, you have in Square and Micro Strategy, these two extremes where Micro Strategy literally went all in. And Square did something that I thought I saw a couple people comment. This is actually more useful to a CFO, say, because they could totally potentially make a pitch for 1% of their board. Like, it's a model that's kind of more tangible. I think in some ways, Jack Dorsey being such a known advocate for Bitcoin makes it, to your

point kind of less impacting in the short term in terms of kind of a surprise example. But I do think in aggregate, there's a lot there. I also think that your point about the evangelism is really key. You know, I had Robbie Gutman from Nidig and Stone Ridge on the show a couple weeks ago. And, you know, these guys have been quietly building a huge Bitcoin custody and institutional services business. And Stone Ridge has, you know, over 50 million, it has 10,000 Bitcoin or something like that is its primary reserve asset, but it's so much quieter, you know, or it has been historically so much quieter, even though it's, you know, a $10 billion asset manager that has this big chunk of its reserve in Bitcoin. And I think, you know, getting those stories out is a key part of this

as well. Yeah, I think so. I think the square thing is just as relevant and the PayPal, right? So both of these businesses went into Bitcoin in a small way compared to micro strategy. But that's in some ways, you know, easier to sell to other companies than, you know, most companies is not going to do what Michael Siler did, at least this year. And, you know, similarly, like with my articles, you know, I viewed kind of kind of my analysis of it to my investors as, you know, the case for having a non-zero Bitcoin position, right? So a lot of people just don't have any. And it's kind of like, okay, well, here's kind of the case to have one or two percent kind of as like a minimum. And then the whole view was, you know, if you then go down to rabbit hole, you explore it and you

get higher conviction, then you might want to go up to a higher allocation. Whereas some of the research when I was doing it over the past several years, people saying like you should put half your net worth into it or you should start kind of counting everything in terms of Bitcoin. And I think those can be kind of useful ways of thinking about it for some people. But in the other hand, if you're talking to institutional investors or high net worth individuals, it's more about kind of making the case for why they should have something and why it's kind of a useful asset class and kind of compare it to where.

how it competes with some of their other ways that they could put money into. So a little bit of a topic departure just because I've kept you here for a while already, and I want to make sure to hit this. Have you spent any time paying attention to the central bank digital currency conversation that's growing? Obviously, China's kind of far out ahead in terms of what they're testing. The U.S. basically blows it off every time we talk about it, but it comes up over and over. And I feel like Christine Lagarde and the digital euro is kind of like where there's more

conversation outside of China than anywhere else. But I'm interested in your take if you spend any time with this. Yeah, partially. And I think what we're seeing playing out is that the regimes that are least satisfied with the current structure of the global monetary system are the ones spearheading it. Whereas the ones that are most comfortable with the current monetary system are the ones that are kind of being dragged towards it. So, you know, the United States, of course, is kind of at the top of this current system. You know, and Japan and Europe are also very comfortable. so you don't see them kind of aggressively spearheading towards a new way of doing things.

On the other hand, we see news out of Iran, for example, that they're experimenting with Bitcoin for bypassing sanctions as an example. And of course, China, they're in the situation where they're rivaling the United States in terms of economic size. They're now the world's biggest commodity importer, but they're in a world where most commodities are priced in dollars. And their currency, despite being very big, is not kind of internationally used. And so, you know, one of their strategies, and they, you know, if you look at, you know, things that their generals have written, they directly view that, you know, their reliance on the dollar as is a security risk from their perspective. And so they have all sorts of incentives to make their currency easier to use to kind of, you know, kind of break out of this current system. They have more incentive to just kind of push forward with new technologies. But then, of course, you get to their darker side as well. You know, they, you know, they're big into like social credit scores and, you know,

and monitoring and kind of, you know, shaping how society develops. So they're quick to use any tools that they can to use those kind of darker roots. And so I'm viewing, you know, in many ways, some of these foreign countries, for them, a digital currency is partially about getting out of the dollar system and more about kind of being able to buy commodities in their own currency, being able to, you know, increase the flexibility of using their currency with their trading partners. and whereas for domestic use, then you get to other things. That's when you get either to darker ways could be controlling your population or in kind of more benign ways.

You know, people can still disagree with it, but it's things like tinkering with monetary policy with more tools. Things like, you know, direct cash handout or kind of different interest rates for different types of entities, things like that. So it is something I'm following. and but so I think, you know, for some of these developed countries, I think it's going to be a while so they actually launched them. Yeah, it's super interesting. I think that you're right that for, if you look at like Europe, for example, it does seem that they are really interested in the set of possibilities that kind of exist nebulously between monetary and fiscal policy. They've talked explicitly about stimulus distribution. They've talked explicitly about, about kind of different

interest rates in different contexts. So whereas, to your point, like China really does seem to be seeing how much they can shift settlement over into their currency by having money have better features, you know, to put it kind of crassly. Yeah, with some of these developed markets, basically, you know, a theme that we see from some of these central bankers is that they basically keep saying that they need more fiscal stimulus because they recognize that they're monetary-only tools have kind of run dry. So both in Europe and the United States, you see the monetary policymakers pointing towards fiscal policy makers and saying we need more fiscal stimulus and then we'll happily monetize it essentially.

But, you know, because those political processes, you know, those are, you know, because, you know, they're for the most part elected, they have a lot more kind of steps to go through before they do things like stimulus, whereas, you know, a central bank is quicker to move because it's a smaller number of individuals making the decisions. And so when you get the fiscal not coming, of course, you love, the central banks, from their respect, they would love to build it to kind of do their own fiscal. They love to build a, you know, have accounts that people have at the Fed that they, for example, can deposit funds into. They always would love to increase their own options. And I think, you know, there are, of course, downsides to that. There's privacy concerns. There's inflationary

concerns. There's all sorts of concerns around there. But from their perspective, you can see why they would want it. Yeah, it's interesting. I wonder to what extent we will look back and be glad that it was China moving so aggressively first because we are having these debates now in the context of what the downsides are, because to the extent that there are downsides, we're going to see them there, especially in terms of privacy, surveillance, and social control. Whereas I can see a world where, you know, that they weren't the big driver of this. You know, Europe did it first. And, you know, all of those things kind of just kind of came along without a lot of upcry or conversation. I think that's a really good point. And just, you know, more broadly,

In addition to looking at the long-term debt cycle, which happens every 80 years or so, there's also just change in the global monetary system. And so the last change was about 50 years ago when we shifted from the Bretton Wood system to the petrodollars system. And so I think we're getting kind of early rumblings of the next system. So we see, for example, if you look at the trade between China and Russia, that has significantly de-dollarized over the past two years or three years or so. They went from like 80% dollar base down to like less than 50% dollar based. And now we have a launch of, you know, China's digital currency. We saw that big kind of trade agreement that was signed between most of the Asian countries, you know, the past week or so. And so now I have, of course, you know, the Fed and the ECB talking about digital currencies.

And so I do think, you know, looking back at this, you know, many years from now, these will be the early rumblings of, you know, whatever the next system looks like. And I don't think there's any kind of clear way that's going to look like yet. But I think we're at the early rumbling is that this system's kind of reaching its kind of end state. And we're looking more towards the next system. Yeah. I mean, I think about this all the time because you have, you have on the one hand, these forces for relocalization in some way, right? The balkanization of the world back into competing economic zones versus one kind of fully integrated economic unit. But at the same time, technology is pushing, regardless of what politicians try to convince anyone

in exactly the opposite direction. And one of the biggest questions for me, I think, is to what extent that new system is very hard for me to imagine a system that's agreed upon at a Bretton Woods-type conference versus the private sector just starting to do things differently, right? Like, I don't think it's an accident that the first credible kind of basket of currencies reserve replacement idea came from, you know, Libra, right? It came from Libra before it came from, you know, Mark Carney, the Bank of Ingram Governor, but it all amounts to the same. And you could see, especially, I mean, Global Stable Coins this year, right, is another early rumbling, have gone from, you know, $4.8 billion of free float supply to 22.7 or something like that. So there are all these

indications, and fascinatingly to me, there are private actors right in the thick of it, you know, And then obviously the big spoiler, which is a global decentralized peer-to-peer network that doesn't, you know, have any one origination. Yeah, I think, I mean, that's a good way to view it is that, you know, I'm also viewing it difficult as envisioning, you know, all these countries coming together in a big kind of unified plan. And so I think the biggest we would see is something more like the Plaza Accord of 1980s, you know, which was kind of, you know, multiple countries agreed to help kind of weaken the dollar, including the United States. because it's causing all of them, including that United States issues. But I don't think you're going to see something as big as Brett and Woods. And so while the system, as currently structured, has all these growing pains and kind of continues to fray around the edges. And there's no kind of clear shift to another system.

I think that's where the private market comes in and just starts doing its own thing. So, of course, we had Bitcoin launched over a decade ago. That's an example of, you know, you don't get any more private than that. We don't even know who it was. probably know maybe it was government. We have no clue, but it's open source. And so you have that as like one example. And then the stable coins you mentioned are another example where it's like, you know,

all these private entities are saying, okay, so if the current system is failing and there's no clear direction of what the next system's going to be, we're going to start kind of just building our own other system from the ground up in a decentralized way. It's fascinating. Lynn, these conversations are always awesome. I guess by way of a last question, what is kind of closing out this year, heading into next year, what is something you're finding yourself more and more curious about that either you're going to be paying more attention to or you think we should all be paying more attention to? I think that's tough.

I think, you know, in 2021, you know, hopefully some of these vaccines work out as people hope they will and in consumer behavior start shifting more back to normal. And so I think, you know, a big question is we've had all this. big increase in money supply, but we've had a corresponding decrease in velocity as people have had fewer avenues to spend it. So I think, you know, what's it going to look like, you know, a year from now or maybe early 2022? How's that going to start looking? Are people going to start kind of spending more if we have a velocity increase or are we going to kind of have just continue kind of slow kind of stagnation that we've experienced over the past decade or so where you have kind of sluggish GDP growth and declining velocity? So that's kind of my

biggest question to watch. I'm also really kind of focused on the dollar because we have these, you know, a lot of these big economic cycles are tied to the dollar. So so many countries have debts denominated in dollars. And if the dollar were to weaken due to far looser fiscal policy and monetary policy, you could see a boom in some of these emerging markets. But in other hand, if you don't get that, then again, you're more likely to have that stagnation scenario where, you know, a dollar debt still becomes a major problem for these foreign countries. but then because those are all trade partners with the U.S. as well, that also weighs on the U.S. market. So a couple of major things I'm watching is velocity of money.

And then more specifically, you know, the increase in the money supply and, you know, what happens with the dollar relative to many other currencies. All right. Well, schedule it another five or six months from now. We're going to check back in and see how that's all going. Hopefully there will be a vaccine at that point that's actually out there and working. But Lynn, thank you so much. always great to have you on the show. Yep, thanks for having me. Reflecting on that conversation, the thing I'd love to explore next with Lynn is this notion

that we're starting to see glimmers of what might come next. And what I mean by that is that it's not just the cracks in the old system that are showing, because those are plentiful, but the competitors in the new system. We have central bank digital currencies, which are clearly going to play a role in this. They are surveillance money in some ways. They are a tool for more precise policy that spans and perhaps even combines monetary and fiscal policy? I think private stablecoins are a part of this. What if Libra had just created their basket and evangelized it to businesses without trying to make such fanfare about it? What if it had just been an offering that businesses could use?

And if not Libra, what if businesses adopt a unit that is an SDR approach outside of any one nation's Fiat peg stablecoin? We've seen such tremendous growth in U.S.D. Stable. this year, from under $5 billion to more than $22 billion in a single year, that it doesn't seem unlikely. And then, of course, there's Bitcoin, which feels like its role is just becoming clear. Corporates using this as a treasury asset might just be the beginning. I think that sovereign's relationships with money is going to undergo some pretty significant changes, particularly for the smaller nations of the world. What I think is clear is that whatever comes next is going to have been unimaginable just a few decades ago, and so I'm really looking forward to exploring it with you

all. Thanks so much for listening. I appreciate you. I hope you're getting ready for a really great Thanksgiving, and until tomorrow, be safe and take care of each other. Peace.