Lyn Alden: "The Myth of Frictionless Finance”
Episode 113
March 13th, 2024
(Conversation recorded on February 21st, 2024)
Show Summary
On this episode, Nate is joined by investment strategist Lyn Alden to discuss how energy and technology have shaped our monetary system and current financial trends. While more people are becoming aware of energy’s foundational role in our global systems, it is still widely overlooked, especially among those working in finance. In contrast, Lyn’s biophysically rooted analysis of macroeconomic patterns expose the cyclical dysfunction of the world’s economy. How has increasing energy availability and productivity offset the inflationary nature of fiat currencies - and what happens if this trend were to slow or reverse? What assumptions and biases have led most analysts to mis-read long term trends, leaving us with vulnerable economies? Is it possible to rejigger our systems and innovate more biophysically aligned tools to enable a smoother transition into a future with a lower energy throughput?
About Lyn Alden
Lyn Alden is an independent analyst and founder of Lyn Alden Investment Strategy with a background in engineering management. Her work provides institutional-level research in plain English, so that both institutional investors and retail investors can benefit from it. Lyn also serves as an independent director on the board of Swan.com and as a general partner at the venture capital firm Ego Death Capital. She is the author of the 2023 best-selling book Broken Money about the past, present, and future of money through the lens of technology. Lyn has a bachelor’s degree in electrical engineering and a master’s degree in engineering management, with a focus on engineering economics, systems engineering, and financial modeling. She worked for over a decade as an electrical engineer at the Federal Aviation Administration’s William J. Hughes Technical Center.
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Show Notes & Links to Learn More
00:00 - Lyn Alden Works and Info, Broken Money
06:02 - Decades with less available energy
06:45 - ESG
08:30 - Kiril Sokoloff, Jeremy Grantham, Luke Gromen
09:03 - Debt and the Economy
09:38 - Just Stop Oil
09:43 - Oil’s centrality to our current lifestyles
10:49 - Long term energy consumption
15:31 - Money and the Mechanism of Exchange, William Stanley Jevons
16:04 - Cross Atlantic Telegraph Cable
17:02 - Disruption of the money system in WW1
18:02 - Decentralization in Bitcoin
18:34 - Decentralization in communication
19:29 - Jevons Paradox
21:53 - Majority of the world lives in developing countries
23:43 - Currency debasement
27:16 - Top 1% own 50% of the wealth, and top 10% own 90% of the wealth
29:10 - Arbitrage
31:10 - Average annual money supply growth in the US is ~7%
32:10 - Technology deflationary effects
33:43 - Business expenses that were historically offset by low interest rates no longer being supported
34:45 - NVIDIA, S&P 500 Energy
35:44 - Inflationary/Disinflationary cycles
36:26 - Nifty Fifty
37:28 - Dot Com Bubble
39:07 - Modern Monetary Theory
39:40 - Stanley Druckenmiller - US Gov debt vs total unfunded liabilities
40:24 - Debt Clock, Ross Perot
44:53 - Emerging Markets
45:14 - Nixon Shock
50:39 - Fiscal Dominance
51:10 - Banks role in money creation
57:40 - Jeff Booth
1:09:17 - Small Modular Nuclear Reactor
1:14:52 - 2013 unintended chain splits, 2018 bitcoin bug
1:16:55 - Alex Gladstein
1:17:12 - Central Bank DIgital Currencies
1:17:31 - Nigeria CBDC adoption
1:18:11 - Bitcoin adoption by country
1:26:45 - Bitcoin concentration of use
1:28:10 - China and bitcoin
1:31:30 - Yield Curve Control