Recorded on: May 28, 2025

Description

Money, debt, and finance shape the lives of everyone globally, including through the policies and actions of national central banks – yet even those who are well-versed in these subjects often miss the full scope of these intricate relationships. For the average person, headlines about mounting government debt and surging interest rates often feel like a confusing and concerning trend. What can we learn from historical cycles, global energy dynamics, and the differing fiscal strategies of nations about the trajectory of the world economy?

In today’s episode, Nate is joined once more by Lyn Alden for a deeper exploration of the intricate relationships between fiscal dominance, rising levels of debt, and the role of energy in shaping our current financial realities. Lyn explains how a historical analysis shines light on the gaps in economic theories like Keynesianism and Modern Monetary Theory, and what the implications are for our present situation. Using this perspective, they discuss recent trends in Bitcoin, Stablecoins, and Artificial Intelligence – and what further developments in these areas might mean for average people in developed and developing countries alike.

How can a deeper understanding of these dynamics prepare us for the economic challenges ahead? What lessons can we draw from past instances when public debt reached unsustainable levels? And as governments attempt to navigate familiar problems with new approaches, how might individuals prepare for the acceleration of this unstoppable train as we head into an increasingly uncertain future?

Show Notes & Links to Learn More

00:00 – Lyn Alden, Broken Money

01:55 – “Nothing stops this train.”  (Breaking Bad spoilers!)

03:00 – U.S. Fiscal Deficit

03:51 – Fiscal vs monetary dominance

06:34 – Lyn Alden on fiscal dominance + public vs private debt creation comparison, U.S. Public Debt Composition, Making Sense of Private Debt, 2020 global debt surge (broken down public vs private)

08:12 – Approaching fiscal dominance again in the U.S.?

08:45 – The Hindsight Depression (comparison between current economic situation and the 1930s), COVID-19 Policies Drive National Debt 

10:05 – Great Depression causes: telecommunication systems development, money transfers, The Speed of Transactions vs Settlements (ledgers + money system centralization)

10:41 – Money and the Mechanism of Exchange by William Stanley Jevons

13:42 – (Credit) Bubbles

13:57 – Banking Panics of 1930-31

14:33 – Ray Dalio’s Long Term Debt Cycle,

16:30 – Total debt compared to base dollars

18:00 – Monetary Base (“base dollars”)

19:10 – Austrian school of economics, comprehensive explainer on marginal analysis

20:35 – Keynesian economics

21:40 – Modern Monetary Theory, fiat currency

23:30 – 1971 official end of Bretton Woods system

26:00 – Permian Basin, state of Permian Basin production, Shale and tight oil in Canada

27:32 – Bank lending rates in 1970s and 80s, life cycle of baby boomers dictating credit cycles

29:15 – Workers vs Social Security beneficiaries, U.S. population growth rates slowing, global population growth trends

30:05 – 2023 bond market look

31:15 – Invisible devaluation got us out of the 1940s when we faced similar problems

31:38 – Yield curve control technique

32:44 – Closer look at Japan’s yield curve control

33:22 – UK gilt crisis 2022

34:10 – 2020 Fed discussed doing yield curve control

36:42 – Metacrisis, Daniel Schmachtenberger – an introduction to the Metacrisis,

37:15 – Peak Oil and the Immediate Fallacy, peak oil demand IEA 2024, Reuters article about IEA findings

38:15 – Peak oil November 2018, Red Queen Effect, TGS about peak oil with Arthur Berman

38:40 – EV Batteries 101, EV battery supply chain, Components of EVs, EV energy requirements and efficiency

39:22 – Household consumption and financial crisis

39:50 – Universal Basic Income

41:30 – Automation of blue collar manufacturing work, Goldman Sachs: AI and effect on GDP/employment, McKinsey & Co study on industrial automation

43:25 – What is cryptocurrency? What is Bitcoin?

45:00 – Jevons’ Paradox

45:35 – Computer Systems Established, Maintained and Trusted by Mutually Suspicious Groups – David Lee Chaum, 1979/1982

45:50 – History of cybersecurity and cryptographic standards, cryptographic algorithms we use today, national bandwidths and the international digital divide

46:55 – Egodeath capital

47:50 – Offshore banking, stablecoins

51:06 – Biggest users of Circle’s USDC stablecoin are non-Americans

52:18 – Treasury Secretary Scott Bessent on stablecoin adding $2 trillion to the U.S. Treasury

54:22 – Currencies linked to the US dollar

59:03 – Michael Hartnett from Bank of America on US Debt projection

01:00:14 – Total value of all bitcoin is about .3% of global capital

01:08:06 – Gantt chart and critical path method

01:12:50 – The Economic Superorganism

01:13:50 – U.S. and energy independence

Teaser image credit: Author supplied.