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

PDF Transcript

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

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