The Breakdown

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The Great Inflation Escape: Where Bitcoin Fits In the New Monetary Order [Money Reimagined Pt. 3] May 16, 2020

Show notes

Niall Ferguson has called this moment an “age of experimentation” when it comes to currencies.

One of the unique features of this moment is the experiments are not limited to the traditional actors. It is not just nation-states trying to elevate their currencies in the face of the global dominance of the dollar, but non-sovereign monies born of decentralized networks that are plausible contenders in this game of currency thrones.

Bitcoin was a byproduct of the last financial crisis. This connection was immortalized in the message embedded in the genesis block: “Jan 03/2009 Chancellor on the brink of a second bailout for banks.”

More than a decade on, in our new financial crisis, the size, scale and implications of that bank bailout seem positively quaint in comparison.

This episode looks at where bitcoin and other permissionless, non-state cryptocurrencies fit in the battle for the future of money.

It starts with a look at the bitcoin narrative in the wake of the market crash. With the most significant stock market correlation of its life, did bitcoin’s digital gold narrative evaporate alongside the S&P 500?

From there, we move to an asset that has been massively in demand since the beginning of the crisis: USD stablecoins. We explore whether this is simply an affirmation of the supremacy of the dollar or represents a more disruptive force in the global monetary order.

We conclude with a look at the relevance of bitcoin on the other side of the crisis. As the market moves from deflationary to inflationary, there are many who will be looking to hard assets and sound money as a cure. In that context, bitcoin could thrive.

Surveying The Carnage: Movies, Sports, and Education in Crisis May 15, 2020

Show notes

This is the second in a series of episodes on how the economic crisis is challenging and transforming different industries. NLW looks at:

Movies

Direct releases are already making more than box office counterparts
AMC is on the verge of bankruptcy (or buyout by Amazon)
Production is on hold and even when it resumes, likely to have strict rules on how it is carried out

Sports

Depending on your study, between 61% and 72% of people surveyed say they’re unlikely to go to live sporting events even after lockdowns are lifted
Colleges losing $18B+ in sports related revenue
eSports alternatives surging - with conversations on Twitter up 71%

Advertising

Industry took 8 years to recover from Great Financial Crisis
Ad spending already down massively in March/April - down 38% in digital, 41% on TV, 45% on Radio, 51% on outdoor.

Education

Of public schools, only 22% are offering any live instruction
Before crisis, college debt had increased 107% between 2009-2019
Since the 80s, cost to attend college had grown 8x the growth in wages
Estimates of 15% fewer enrollments and $23B in lost revenue

A Coming Reckoning: Why The Fed Can't Outspend Deflation, feat. Jeff Booth May 14, 2020

Show notes

Two powerful and diametrically opposed forces are shaping the economy.

On the one hand is inflationary economic policy, which keeps the price of assets like real estate and stocks rising ever higher, but at the expense of savings as the value of currency depreciates.

On the other is technology-wrought deflation. As technology increases its capacity exponentially, it causes everything it touches to be less expensive.

Jeff Booth is the author of “The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future.” In this conversation, he and NLW discuss:

How today’s system came to be designed
Why policy makers are terrified of deflation
Why inflationary policy punishes savers and forces them into riskier markets
How policy that prioritizes asset holders over savers has significantly exacerbated inequality
Why each dollar of debt is producing less real economic growth than ever before
Why proposed “solutions” like MMT and UBI paper over the root causes of the problem

How We Future Now - Live With Kathleen Breitman, Caitlin Long and More May 13, 2020

Show notes

There is a shared sense that the world has shifted. Now begins the messy work of figuring out what it means for the future we’re headed into.

This live episode of The Breakdown podcast with NLW features four conversations about how the future is shifting before our very eyes.

How We Game and Entertain Now - featuring Kathleen Breitman, co-founder of Tezos and founder of blockchain game studio Coase
How We Identity Now - featuring Muneeb Ali, CEO of Blockstack
How We Bank Now - featuring Caitlin Long, founder and CEO of Avanti Financial Group
How We Event Now - featuring CoinDesk’s Joon Ian Wong

The Great Monetary Inflation: Paul Tudor Jones' Complete Case For Bitcoin May 12, 2020

Show notes

Jones' letter lays out his bitcoin and macro thesis.

Last week, investing legend Paul Tudor Jones rocked the world of crypto and traditional markets with his full throated entrance into the bitcoin market via his latest letter to Tudor BVI investors.

While the headlines (and the quick price bump on the back of FOMO buying) were great, the story is even more interesting than the soundbyte.

In this episode, NLW breaks down Paul Tudor Jones complete case for bitcoin, looking at:

The context and previous attitudes towards bitcoin of both authors of the letter
The “Great Monetary Inflation” thesis driving a focus on stores of value
How money supply growth compared to real economic output growth hasn’t been this out of sync since inflationary periods in the 1970s and 1980s
The “Inflation Race” - a list of 8 potential inflation hedges
The four categories by which a store of value can be judged: purchasing power, trustworthiness, liquidity, portability
A ranked look at bitcoin, gold, fiat, and financial assets in the context of those four categories.

The Breakdown Weekly Recap | May 9 2020 May 09, 2020

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The week's complete show run in one convenient file.

Monday | Why Buffett’s Bearishness Should End V-Shaped Recovery Talk
Tuesday | Why Crypto Matters for Financial Inclusion, Feat. Celo's Marek Olszewski
Wednesday | Surveying the Carnage: How Real Estate, Travel and Music Are Faring During the Crisis
Thursday | 9 Reasons Why Bitcoin Has Never Been Stronger Going Into A Halving
Friday | The Rise Of The Dollar Killers, Feat. Niall Ferguson & More [Money Reimagined - Part 2]

Could These Currencies Be Dollar Killers? Feat. Niall Ferguson & More [Money Reimagined - Part 2] May 09, 2020

Show notes

Libra, the Euro, China's DCEP.

Do any of these currencies have a chance at displacing the dollar in the global order? Or is it possible - as Niall Ferguson suggestions on this episode - that we're poised to shift back to a multipollar, multi-currency world?

The second in our four-part documentary micro-series on the battle for the future of money.

Also featuring Michael Casey, Matthew Graham, Katherine Wu, Peter Zeihan, Luke Gromen and more.

Music by DJ J-Scrilla "Faith In My Money (Money Printer Go Brrr)" from the new “Sound Money” album.

9 Reasons Why Bitcoin Has Never Been Stronger Going Into A Halving May 08, 2020

Show notes

The bitcoin halving is just a few days away and the growing excitement is palpable. On this episode of The Breakdown, NLW argues that the excitement is also legitimate, and looks at nine reasons why bitcoin has never been stronger going into one of its every-four-year issuance reductions:

Price
Hash rate
Mining competition
Accessibility and Services
Infrastructure
Institutional awareness and participation
Narrative relevance
Perceived and real resilience
Lindy effects

Oh, and let’s not forget. Paul Tudor Jones just disclosed that he is invested in bitcoin and sees it as a hedge against ‘great monetary inflation’

Surveying the Carnage: How Real Estate, Travel and Music Are Faring During the Crisis May 07, 2020

Show notes

The second order effects of the COVID-19 crisis are here, and they’re painful. In this episode, NLW looks at how COVID is impacting three industries:

Travel and tourism
- 100m lost jobs expected globally
- $2.7 in lost GDP
- Airbnb lays of 25% of employees
Music & Concerts
- From a record $12.2B concert year to a loss of $9B
- Expectations of concert prohibition lasting up to two years
- Industry organizing to be included in relief
Real Estate
- Commercial real estate expecting 2.5% default rate for 5+ years
- Negotiations around sales-based payment instead of traditional rent
- Residential sees cratering demand but home prices remain up year over year

Why Crypto Matters for Financial Inclusion, Feat. Celo's Marek Olszewski May 06, 2020

Show notes

Around the world, an estimated 1.7 billion people remain unbanked and lacking access to high quality financial services.

Some projects see cryptocurrency as an answer. In this episode of The Breakdown, NLW speaks with Celo co-founder Marek Olszewski about:

How Celo was designed differently to address financial inclusion as a primary use case
The problems with centralized approaches to mobile money like m-pesa
Why true financial inclusions solutions must be permissionless
Why technology design isn’t enough and projects that seek to gain adoption require ground up go to market strategies
The impact of Libra’s launch on the “bank the unbanked” narrative
How the COVID-19 crisis has changed the narrative around and demand for stabelcoins globally

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