The Breakdown

Today’s edition of The Breakdown is an extended version of the Brief, this time covering five topics. New Jobless claims - sticking stubbornly at ~1.5 million new claims per week, despite economist expectations The “whack-a-mole” economy - Former Treasury Secretary Lawrence Summers predicts as much as 30% of the economy may need to close to get COVID-19 under control PlusToken scam pressure on BTC price: Has scam selling suppressed the price of bitcoin since early last year? Biggest ever bitcoin option expiry; more than $1 billion in notational value BTC options are set to expire tomorrow, Friday, June 26 Apple’s UX privacy triumph: Users will have to opt-in to allow apps to track them across other apps as well

The economy is nothing if not confounding right now. Across every domain, from real estate to oil to retail, there are bull signals and bear signals. In this episode, NLW looks at those signals in the following areas: Markets - strong stock recovery vs. growth in cash deposits Employment - growth in jobs vs. persistent continuing jobless claims Retail - growth in foot traffic vs. demand destruction Oil - growth in demand (but not in economically productive diesel) Real estate - surge in mortgage applications vs. worst home sales since 2010 Dollar - declining confidence vs. there is no alternative COVID-19 - reduced death rates in the U.S. vs. growing caseload What’s the answer? Is this just a narrative mirage recovery? Listen and find out.

Today on the Brief: PayPal and Venmo reportedly adding crypto buying and selling Trump executive order temporarily suspends H1-B visa program Continued growth in bitcoin derivatives Our main conversation: Tracy Shuchart is an oil- and commodities-focused trader in the private equity space known for her wide-ranging insights on financial Twitter (FinTwit). In this conversation, she and NLW discuss: Why the shale revolution of the last 10 years shifted the power balance in global energy among the United States, Russia and Saudi Arabia How easy money in the wake of the Great Financial Crisis enabled the shale revolution as much as new technology Why after the 2014-2016 oil crash it was inexperienced private equity firms that picked up where banks left off with shale How a growing focus on dividends and cutting costs was creating structural problems for shale even before the COVID-19 crisis How COVID-19 coincided with a contentious negotiation between Saudi Arabia and Russia that ultimately sent prices to less than $0 Find our guest online: Twitter: @chigrl On the web: chigrl.com

Today on the Brief: New Federal Reserve research suggests reaction to Facebook’s Libra basket approach was overblown Italian Banking Association pushing to test a digital euro U.S. housing has worst month since 2010 Our main conversation: Earlier this month, Messari hosted the Mainnet virtual summit. At that event, NLW moderated a session called “Macro Investors Sound Off!” featuring BlockTower Capital’s Ari Paul, Blockchain Capital’s Spencer Bogart and Arca’s David Nage. The discussion included: The evolution of the Fed put and how it shapes the markets How the collision of Bitcoin’s halving and the Fed’s reaction to COVID-19 created a powerful narrative moment Why the “Money Printer Go BRR” meme was so effective Why the Paul Tudor Jones letter was hugely influential within family offices Why these investors expect to see some significant announcements around bitcoin exposure from traditional investors in the months to come Find our guests online: Ari Paul: @AriDavidPaul Spencer Bogart: @CremeDeLaCrypto David Nage: @DavidJNage Watch the rest of Messari’s Mainnet 2020 sessions.

A reading of two pieces How I Learned to Stop Worrying and Love the Money Printer by Jill Carlson | CoinDesk + Fight the Fed Jesse Felder | The Felder Report

The big narrative in financial media for the last few weeks has been the insurgent Robinhood rally, led by the AC/DC-blaring Pied Piper Dave Portnoy, owner of Davey Day Trader Global Global (DDTG Global). As people try to make sense of the strange retail trading phenomenon, one perspective is the participants (average age of 31 on Robinhood) are reacting to a market that has left them behind. In this view, they are assaulting the market with otherwise outrageous and ludicrous strategies because, otherwise, how will they get their piece? This week’s Breakdown Weekly Recap looks at this in the context of some surprising (and frankly depressing) stats about the millennial generation’s current wealth, as compared to where boomers were at the same time in their careers.

Today on the Brief: FTX lists two Compound tokens Reddit partners with Ethereum Foundation on Layer 2 scaling Black-In Freedom Festival reimagines Juneteenth Our main topic: Dr. Vikram Mansharamani is a lecturer at Harvard and author of “Boombustology: Spotting Financial Bubbles Before They Burst” as well as the just released “Think for Yourself: Restoring Common Sense in an Age of Experts and Artificial Intelligence.” In this wide-ranging conversation, he and NLW discuss: Why our relationship with experts and expertise is leading us astray How COVID-19 shows the downside of both over-reliance on, and complete rejection of, experts How the economic crisis surrounding COVID-19 is bursting bubbles and moving us from a period defined by deflation to one defined by inflation Why “monetary debasement is here to stay” Why the U.S.-China relationship is the key backdrop for understanding the next 10 years of global economic reality Why inequality threatens the fabric of our economy and our society, and what might be done about it Find our guest online: Twitter: @mansharamani Website: Vikram Mansharamani | “THINK FOR YOURSELF”

Today on the Brief: Powell says private companies shouldn’t be involved in Central Bank Digital Currencies According to former NSA head John Bolton, Trump told Mnuchin to go after Bitcoin Interest around Compound driving speculation around a DeFi-driven bull run Our main topic: This week’s U.S. jobless report brought bad news. Whereas economists had expected new claims to fall to 1.29 million from 1.57 million the week before, claims fell just 58,000 to 1.51 million. Continuing claims fared even worse. Economists predicted these claims would fall 600,000+ to 19.9 million. Instead, they fell a tenth of that - 62,000 - to leave total continuing claims at 20.5 million. In this episode, NLW breaks down what we can learn from these numbers when they’re combined with the previously released May jobs report.

On the Brief: Big tech vs. the American political right and left Why TikTok users are pretending to love China for clout Decentralizing venture capital Our main conversation: The Crypto Dog is one of crypto Twitter’s best known characters. In this conversation, he and NLW discuss: Mining bitcoin in 2011 The difficulty of hodling across a decade The emergence of the crypto trader in the Ethereum era Trader agnosticism Pseudo-anonymity and social media Developing the character behind the avatar Global nomadism and the acceleration of “work from anywhere” The vibe and feel of Hong Kong today Find our guest online:Twitter: @TheCryptoDog

Today on The Brief: An unexpectedly good retail sales report drives market confidence Are we in for a second wave of white-collar layoffs? The latest rumblings in central bank digital currencies Our main conversation: Jesse Felder is an independent financial analyst and one of the best financial curators on Twitter. In this wide ranging conversation, he and NLW discuss: The Robinhood rally and what makes it both alike and different from previous manias The illusion of American recovery and the disconnect between markets and fundamentals The Federal Reserve’s role in increasing economic inequality Why the dollar is significantly overvalued relative to other currencies Why financial assets could be poised for a rough decade Find our guest online: Twitter: @jessefelder Website: The Felder Report

Today on the Brief: Stocks down on coronavirus fears Demand destruction The looming retirement crisis Our main theme: Bitcoin is up more than 30% on the year. After a crash alongside equities, it has proved incredibly resilient. There are famous new entrants to the space like Paul Tudor Jones II. So how can a Bloomberg editor argue the year has been bad for bitcoin? In this response podcast, NLW argues that most of the arguments are about narrative, not the underlying fundamentals. He presents six reasons why not only has it not been a bad year, but the exact opposite is true: Demonstrated institutional uptake Demonstrated resilience New champions Narrative fundamentals Need in emerging markets End of economic orthodoxy

After a week where bankrupt Hertz pumped 890%, the question is: what is the historical precedent? Luckily, we have finance history guy Jamie Catherwood to fill us in. In this essay "Rubbish Rallies" (written by Jamie, read by NLW), Catherwood tells the story of an 1820s scam that turned into an 1860s market mania - even though everyone knew it had been a scam the first go around. History might not repeat, but it certainly rhymes. This is a bonus episode of The Breakdown, recorded originally last week as part of a private beta test for new content forms. If you like this type of episode, let me know @nlw on Twitter.

The stock market has long been disconnected from the underlying economy, but much of what happened this week - particularly the pumping of bankrupt company stocks - suggests that something new is afoot. In this episode, NLW breaks down three long-term trends suggested by the so-called Robinhood Rally, including: The “insurgency” aspect of a generation of young professionals who are willing to play the financial game rather than have it be played for them A totally new force in financial media, which could hit like a wrecking ball in one of the stodgiest, traditional media industries An embrace of a certain type of cynicism or nihilism when it comes to the values of financial markets This week on The Breakdown: Monday | Why War Reporting Is the Right Mental Model for Today’s Media, Feat. Jake Hanrahan The founder of Popular Front joins NLW for a discussion about protests, media and how the people being covered tend to not reflect divisive politics. Tuesday | What the Stock Market’s ‘Robinhood Rally’ Means for Bitcoin The largest 50-day rally in stock market history and even shares of bankrupt companies are up more than 100%. What is going on? Wednesday | A Vision for Digital Property Rights, Feat. Nic Carter Most people today look at social platforms like any other private company, but what if we saw them as alternative jurisdictions with a new set of property rights? Thursday | Why the Fed Keeps Denying Its Role in Increasing Inequality The Federal Reserve expects low inflation, says rates will stay close to zero through 2022 and keeps lying about the role of central banks in increasing inequality. Friday | Bitcoin Is More Than an Inflation Hedge While fears of a “great monetary inflation” have driven the recent bitcoin narrative, other aspects like censorship resistance and peaceful protest matter just as much. Saturday | The Chad Index Versus Doomer Internet Money: The Breakdown Weekly Recap This week, the wildest, most nonsensical, volatile part of the market wasn’t bitcoin, it was the “Robinhood Rally” in equities.

Today on the Brief: Why bitcoin sold off A bank-the-unbanked narrative for the digital dollar It’s Dave Portnoy’s world and we’re all just living in it Today’s main topic: Why inflation isn’t the only bitcoin narrative that matters. When bitcoin’s halving coincided with the most aggressive central bank policy of all time, it set a clear narrative framework for bitcoin as an inflationary hedge. This was captured by people like legendary hedge fund investor Paul Tudor Jones, who warned of a “great monetary inflation.” In this episode, NLW argues 1) that inflation could be a dangerous narrative to focus on too closely due to a number of countervailing deflationary forces, and 2) there are a variety of other narratives that are just as important to bitcoin, including: Censorship resistance Seizure-resistant asset Currency controls and reshoring Nations looking to escape USD system Independent banking Peaceful protest

Today on the Brief: Three Arrows holds more than 6% of Grayscale Bitcoin Trust New platform for censorship-resistant blogging Coinbase announces new token potentials as anti-surveillance hodlers flood out Today’s main topic: Why the Fed keeps denying its role in inequality Some key takeaways from yesterday’s Federal Open Markets Committee meeting: Interest rates are likely to stay near zero through 2022 Unemployment anticipated to average between 9% and 10% during last three months of 2020 Economy expected to contract 4% to 10% this year No specific discussion of yield curve control Inflation expected to be 1.0% this year and 1.5% in 2021, lower than Fed target of 2% According to Chairman Powell, inequality has nothing to do with Fed policy On this episode, NLW recaps the above and dives deeper on two of the points: Net inflation stats gloss over specifics, including food prices that have been rising at an annual rate of 17.5% The Fed’s pronounced role in exacerbating inequality by propping up artificially high asset prices, effectively locking low and middle income households out of the mechanism for economic advancement

Today on the Brief: A record week for peer-to-peer exchanges in the developing world A digital dollar gets discussed in Congress Previewing the Federal Reserve’s FOMC guidance Our main topic: A brainstorm on digital property rights Here’s a radical idea. What if by virtue of the fact that you had put so much time and effort into building a following on social media and filling that following with content you had legal claim to and distinct property rights around your corner of social media platforms? It’s wild in the context of today’s terms of service, but has significant legal precedent in the world of physical land. In this new type of deep-dive 20-minute episode we’re calling a “Breakdown Brainstorm,” Castle Island Ventures investor Nic Carter looks at: The two schools of thought around digital property rights The historical precedent for squatter’s rights What the specific example of the USA’s Westward Expansion can teach us Why this type of approach can be highly economically generative, according to economists like De Soto How John Locke’s theories provide a moral basis for the argument Why today’s platforms are akin to anti-democratic feudal lords How bitcoin provides a model and a mechanism for digital rights enforced on the protocol level rather than by a state or other external actor Find our guest online:Twitter: @nic__carterWebsite: niccarter.info

Today on the Brief: Saudi Arabia injects $13 billion in bank liquidity via blockchain. China’s state TV CCTV says Binance is still allowing crypto trading in China. MakerDAO community greenlights real world collateral. Our main topic: The “Robinhood Revolution.” The next time someone tells you crypto markets are too irrational or volatile, point them to stock markets right now. The largest 50-day rally in history Every S&P 500 stock up from 10 weeks ago Multiple bankrupt companies up more than 100% since they declared bankruptcy This is the “Robinhood Revolution,” as a horde of day traders are outperforming billionaire investors and commanding the stock market narrative. This episode looks at: Who is this new generation of investors Why they’re so active right now What they’re betting will go up Why they don’t care about earnings, balance sheets or any other fundamentals Four scenarios for how this rally could have an impact on the bitcoin and crypto industry

On today’s episode of The Breakdown, we introduce the Breakdown Brief - a look at three key topics in bitcoin and crypto. Today, the Brief covers: Brave browsers auto adding ref links to Binance.us The disconnect between Wall Street and crypto when it comes to inflation expectations A 2018 Pentagon war game including bitcoin Our featured interview is with Jake Hanrahan, founder of Popular Front - a podcast and independent media company covering underreported and irregular conflict with “no frills, no elitism.” Jake was previously an embedded reporter with Vice and has covered conflict in Turkey, Syria, Iraq, Palestine, Ukraine and elsewhere. In this conversation, Jake and NLW discuss: Why Jake left Vice and decided to build an independent journalism project Why the mainstream media isn’t bad because of some political conspiracy, but because its business model doesn’t allow it to understand how real people are experiencing issues How the protests are being (mis)covered around the world Why American protests are going global What he learned covering protests in Hong Kong last year What situations people should be paying attention to around the world that they’re not right now

The Breakdown Weekly Recap looks at the key themes that shaped the week. On this week’s episode, NLW discusses: The modern significance of Tiananmen Square, and why this week’s U.S. protests show why the tools of surveillance need to be applied to states, not citizens. The importance of “narrative violations,” or fighting to see things without falling into popular but often wrong conventional wisdoms The need to resist attempts from both the left and the right to fit today’s unrest into convenient culture-war frameworks that perpetuate each group’s power. This week on The Breakdown: Monday | The Power and Peril of the 'Bitcoin Fixes This' Meme A look at what role, if any, bitcoin has to play in remaking the world that is being protested around the U.S. (and world) this week. Tuesday | Bitcoin, Cellphones and the Citizen Tools of Anti-Authoritarianism, Feat. Alex Gladstein A look at the anti-authoritarian technology stack, including where non-state money like bitcoin fits in. Wednesday | 5 Numbers That Tell the Story of Markets Right Now From the number of U.S. flights from Chinese carriers to S&P 500 growth in the tumultuous year of 1968, these (unexpected) numbers tell the story of today’s markets. Thursday | The Mirage of the Money Printer: Why the Fed Is More PR Than Policy, Feat. Jeffrey P. Snider An argument that the Fed is actually highly ineffectual due to the presence of the eurodollar shadow-banking system. Friday | The Biggest Realignment in the US-China Relationship Since Nixon, Feat. Graham Webster A 101-level primer on the history of the U.S.-China relationship, and why today’s bluster represents a fundamental shift.

The U.S.-China relationship has an outsized impact on global economics and politics. As that relationship comes even more into focus in the wake of COVID-19 and a return of trade tensions, this episode provides a historical primer. Graham Webster is editor-in-chief of the Stanford–New America DigiChina Project at the Stanford University Cyber Policy Center. He’s also a China digital economy fellow at the New America think tank. In this episode, Webster explains: Why the relationship with the U.S. has been at the forefront of Chinese policy since the People’s Republic of China was formed, but has flitted in and out of America’s focus. Why the first most significant period in the U.S.-China relationship came between the late 1960s and 1970s, as the U.S.-China relationship normalized. How Tiananmen Square undermined but didn’t destroy the relationship. Why George W. Bush came into office with an intention to focus on China but got distracted in the wake of 9/11. Why China has spent the last decade becoming increasingly illiberal. How the rise of social media contributed to the shift. Why China and U.S. policy is as much a reflection of domestic self-identity in both countries as it is a bilateral political question. Why China’s human rights abuses present such a challenge. How COVID-19 changes the relationship. Find our guest online: Twitter: gwbstr Website: DigiChina

The conventional wisdom is that central banks are the most important economic actors in the world. Markets hang on their every word. Yet, what if that power has less to do with actual monetary policy and more to do with how the performance of that policy creates a self-fulfilling prophecy as market actors respond to media coverage? Jeff Snider is the head of global research at Alhambra Investments. In this conversation, he and NLW explore: How the Fed lost the ability to even determine what the money supply is. How the financialization in the 1980s exacerbated monetary confusion. Why the most important force in the global economy isn’t central banks but the eurodollar and shadow banking system. How the eurodollar and shadow banking sector creates a drag on real economic growth. Why the conventional wisdom and “central bank savior” narrative around 2008 was dead wrong. The problem with “survivor’s euphoria.” Why “money printer go brr” is actually a flood myth.

Every day that protests continue and the stock market goes up, more people ask what the disconnect between markets and the real economy is. In this episode of The Breakdown, NLW peels back the story of today’s economy by looking at five numbers: The growth of the S&P500 since the March 23 low Current unemployment stats and a Bloomberg Economics estimate of the number of jobs at risk The performance of the S&P500 in 1968, one of the most tumultuous years in American history The total percentage of the world’s debt denominated in dollar terms The number of flights between the US and China by Chinese airlines going forward

Alex Gladstein is the chief strategy officer of the Human Rights Foundation. He is a powerful voice for the role of bitcoin in combating authoritarianism around the globe. In today's episode, he and NLW discuss: What the protests tell us about the state of democracy in the U.S. The potential impact of protests and COVID-19 on surveillance norms The potential for a "biological Patriot Act" The implications of China's push to absorb Hong Kong The relevance or irrelevance of China's digital currency The role of bitcoin in promoting freedom

Cities around the country have been engulfed in protest in the wake of the murder of 46-year-old black man George Floyd. There is an intense battle for the narrative around the protests. Are they legitimate outcries against institutional racism and police brutality? Is the looting covertly being driven by white supremacists on the one hand or ANTIFA on the other? In the Bitcoin community, some have plumbed the “Bitcoin Fixes This” meme to argue that the core underlying issue has to do with a monetary system that structurally creates inequality. Others have clapped back against pushing that meme in this moment. In this episode of The Breakdown, NLW looks at: What bitcoiners are trying to say when they apply the “Bitcoin Fixes This” meme to this moment. Why the current system structurally exacerbates inequality. Why the meme fails to capture additional economic, political and power dimensions of what’s going on. Why the meme in this moment might feel so out of place as to inspire the opposite of its intended effect: turning people away from bitcoin rather than making them want to learn more. Why Satoshi’s “If you don’t get it, I don’t have time to explain it to you” quote is the most misused and abused of his sayings. Why complexity and nuance, not memes, are needed now.

The week's episodes in one convenient file. Monday | Best of April/May (not included in Weekly Recap) Tuesday | Deglobalization and Other Narrative Violations, Feat. Geoff Lewis Wednesday | Why Innovation Matters (and How Not to Screw It Up), Feat. Matt Ridley Thursday | The Geopolitical Implications of a Too-Strong Dollar, Feat. Brent Johnson Friday | The Battle for the Future of Money, feat. Lawrence Summers, CZ, Michelle Phan, the Winklevoss brothers, The Chainsmokers and more. [Money Reimagined Episode 4]

As the economic dimension of the COVID-19 crisis comes into clearer view, what have we learned about the battle for the future of money? Does the dollar reign supreme? Are within-the-system competitors like the euro or China’s digital yuan gaining ground? Does an outside the system alternative like bitcoin stand a chance? Over the last month, the “Money Reimagined” series has looked at the battle for the future of money. Episode 1 focused on the dollar and why it is simultaneously stronger and more set up to fail than ever before. Catch up: Why the Dollar Has Never Been Stronger or More Set Up to Fail Episode 2 was all about the obvious contenders to replace the dollar such as the euro or China’s currency, especially as they race towards a digital yuan. It also looked at where Facebook’s Libra might fit in the mix. Catch up: The Rise of the Dollar Killers Episode 3 looked at one of the most unique features of this modern currency battle - the fact that there are fundamentally new systems like bitcoin in the running. Can a non-sovereign currency actually be more relevant than global fiats? Catch up: Where Bitcoin Fits in the New Monetary Order This final episode of the “Money Reimagined” series checks in on each of the previous episodes but brings a new set of voices to the mix. Between May 11 and May 14, CoinDesk hosted Consensus:Distributed, a virtual summit featuring some of the leading lights in crypto, finance, economics and pop culture. In this episode, we hear from those voices, including: Lawrence Summers - former U.S. Treasury Secretary Christopher Giancarlo - former Chairman of the CFTC Michelle Phan - YouTube innovator and founder of Ipsy Chaoping Zhao - founder and CEO of Binance The Winklevoss brothers - founders of Gemini The Chainsmokers - Grammy-winning artists Carlota Perez - influential economist

You know the meme: Money printer go brrr. It means inflation right? Not necessarily, says Brent Johnson. Since 2016-2017, Johnson has been arguing the big economic issue of our time isn’t inflation of the U.S. dollar due to excess money printing, but the havoc caused by a global system where the dollar keeps getting stronger and sucks up liquidity from the rest of the world. As the dollar has strengthened over the COVID-19 crisis, his ideas look more prescient than ever. In this conversation with NLW, Johnson discusses: What the “Dollar Milkshake Theory” is Why the implications of the theory stress him out, even though he created it Why everything is relative and no asset can be analyzed in a vacuum Why we could see the dollar, bitcoin and gold rise at the same time Why we can’t discuss macroeconomics without discussing geopolitics and even the military

Twenty-one different people can reasonably claim to have invented the light bulb, but Thomas Edison is the one we know about. Was it just good PR? According to Matt Ridley, it was because Edison was the progenitor of an “innovation factory” that didn’t just create things but brought them to market in a way no one else did. Innovation is one of the most important forces in the economy, and arguably the most important driver of human prosperity over the last century. Yet, for most of its life, it has been viewed as some strange exogenous force, rather than as a discipline that could be understood. In this conversation with NLW and Ridley discuss: Why it took so long for economists to take the study of innovation seriously Why invention is different from innovation Why innovation has tended to concentrate in geographically proximate areas Why free societies produce more innovation than closed societies (including empires) Why China’s innovation production over the last decade may be an exception that proves the rule of innovation thriving in freedom Why government winner picking is a terrible way to inspire innovation Why innovation policy led Matt to support Brexit The rational, optimistic take on the future

The battle to control narratives is the battle to shape how people understand the world around them. But the traditional gatekeepers of narratives - the media - have never had more competition to shape what is perceived as truth. In this episode, NLW speaks with Bedrock Capital founder Geoff Lewis about what it means to seek out opportunities in “narrative violations.” They also discuss: Why de-globalization and “onshoring” are likely to be among the most important economic drivers in the U.S. in the coming decade Why the shift to working from home may be an overblown “narrative mirage” How important questions of institutional decay have been co-opted by the culture war Why independent, individuals in the media have more influence than ever Why we’re in a “narrative mirage recovery”

Highlights from some of the most interesting conversations on The Breakdown from the last two months. 4/1 - Peter Zeihan on why the world we’ve known for 30 years is changing forever 4/6 - Emerson Spartz on a moment of punctuated equilibrium 4/17 - Jared Dillian on the political football of stock buy backs 4/21 - Joe McCann on how financial engineering came to dominate Wall Street 4/22 - Luke Gromen on the genesis of the global monetary order and why the US switched off the gold standard in 1971 5/1 - Danielle DiMartino Booth on how the Federal Reserve moved from incompetent to corrupt 5/9 - Niall Ferguson on a shift back to a multipolar, multi-currency world 5/14 - Jeff Booth on why technology deflation competes with inflationary monetary policy 5/20 - Lyn Alden on the negative impacts of a too-strong dollar 5/22 - Tuomas Malinen on why dismantling the Euro may be the only way to save the European Union

The complete week's shows in one convenient episode Monday | Economic Freedom in the World After Capital, feat. Albert Wenger Tuesday | Lessons from the Financial History of Pandemics, feat. Jamie Catherwood Wednesday | Why a Strong Dollar Is Bad for the US and Bad for the World, feat. Lyn Alden Thursday | ‘Dismantle the Euro to Save Europe’ Feat. Tuomas Malinen Friday | The Shadow of Satoshi’s Ghost: Why Bitcoin Mythology Matters

On Wednesday, a batch of coins mined just a month after bitcoin’s birth were moved. It was the first time since August 2017 that any bitcoin from early 2009 had been transferred, and the action set Bitcoin Twitter on fire. While a number of bitcoin archaeologists quickly and persuasively argued the tokens were almost assuredly not mined by bitcoin creator Satoshi Nakamoto, it was a moment that reinforced the living history in the bitcoin ecosystem. In this episode, NLW looks at what makes the Satoshi mythology powerful: Genuine technical innovation and problem solving that had stymied some brilliant minds for decades Incredible instincts around narrative and human psychology, as reflected in the “Chancellor on the Brink” message embedded in the Genesis Block and the ceremony around the halving The incredible contrariness of a creator withdrawing in a world where entrepreneurs are lionized like no one else in society And while the battles within the bitcoin community around interpretation may look more like the early history of religions than like a business ecosystem, NLW argues that fervor is a key part of what de-risks bitcoin, even for investors who don’t at all care about the mythology.

The European Union and the euro are part of the most ambitious political and economic experiment of the 21st century. The COVID-19 crisis, however, has exacerbated growing questions of political will and political legitimacy and led some to wonder if the eurozone can survive. Tuomas Malinen is the CEO of GnS Economics, a macroeconomic advisory firm, and Adj. Professor of Economics at the University of Helsinki. In this interview, he and NLW discuss: Why the European debt crisis was actually a “morally corrupt bank recapitalization project” Why negative interest rates and quantitative easing made the European banking sector particularly weak even before the pandemic Why the German Constitutional Court’s battle with the European Central Bank has major implications for the entire euro system Why European leaders are pushing for deeper integration when citizens want more lightweight integration Why European nations would be more likely to support one another in bilateral arrangements rather than through forced solidarity Why the only way to save the European Union might be to let the euro fade away

The dollar has a unique role in the world due to its reserve currency status. For many years that status has created incredible opportunities for the U.S. Increasingly, however, some are wondering if the global standard has outlived its usefulness - not only for the world but for the U.S., too. In this illuminating conversation, one of FinTwit’s brightest minds, Lyn Alden, shares her perspective on: Why we’re at the end of a strong dollar cycle Why the Federal Reserve is terrified of the global dollar shortage The difference in creditor vs. debtor nations The concept of the Triffin dilemma Why Japan has been able to print money without seeing rampant inflation Why we have inflationary and deflationary forces competing to influence the U.S. economy Why debt is going to matter more than ever What alternatives to the USD system might look like

Jamie Catherwood works at O’Shaughnessy Asset Management, a quantitative long-equity investment firm. More importantly, however, he is the finance history guy on Twitter. His “Financial History: Sunday Reads” curation pieces and longer form articles on his site Investor Amnesia have become required reading for anyone who wants the historical context for current financial issues. On this episode of The Breakdown, Jamie and NLW discuss: Financial lessons from previous pandemics, including the 14th century bubonic plague; an 1892 Cholera outbreak in Hamburg, Germany; and, of course, 1918 Strange parallels between 1918’s Spanish flu and the currentcCoronavirus crisis, including an increase in the price of oranges The concept of “Minsky Moments, a key inflection point in bubbles where over-exuberant markets become unwound extremely quickly

Albert Wenger is a partner at Union Square Ventures as well as a prolific thinker and writer. His “World After Capital” is an evolving digital book project that looks at a set of megatrend shifts as the world moves between economic paradigms from the Industrial Age to the Knowledge Age. In this wide-ranging conversation, he and NLW discuss: Why attention is at the center of the new Knowledge Age Why markets can’t price crucial needs such as pandemic preparedness Why the new era will be defined by three categories of freedoms: economic freedom, information freedom and psychological freedom Why universal basic income has an important role to play in economic freedom How UBI could avoid political capture Why technology is inherently deflationary Why real estate, education and health care should be much cheaper than they are Why community currencies could be a key innovation from the current crisis

The complete week's shows in one convenient file Monday | The Great Monetary Inflation: Paul Tudor Jones' Complete Case For Bitcoin Tuesday | How We Future Now - Live With Kathleen Breitman, Caitlin Long and More Wednesday | A Coming Reckoning: Why The Fed Can't Outspend Deflation, feat. Jeff Booth Thursday | Surveying The Carnage: Movies, Sports, and Education in Crisis Friday | The Great Inflation Escape: Where Bitcoin Fits In the New Monetary Order [Money Reimagined Pt. 3]

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.

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

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

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

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 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]

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.

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’

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

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

One month after the bankruptcy of Lehman Brothers in 2008, Warren Buffett wrote an Op-Ed saying that he was buying stocks. Yet during the Coronavirus crisis, he is sitting firmly on the sidelines. On Saturday night, the “Oracle of Omaha” spoke for 4.5 hours in the first ever virtual version of the Berkshire Hathaway annual shareholders meeting - an event which some have called the “Woodstock of Capitalism.” On this episode, NLW examines some of the key topics of the presentation, including: Why Berkshire sold their entire $6.5B stake in the airline industry Why they were sitting on $137B in cash Why they haven’t made any investments How the Fed gave companies better terms than they were willing to It was hard not to watch the presentation and conclude that Buffett feels that there are simply too many unknowns in the world going forward to feel comfortable doing much in the market right now.

The week's episodes in one long run. Monday | Bitcoin vs. QE Infinity: The 4 Archetypes Of The Halving Debate Tuesday | The Mass Surveillance Machine, Feat. Maya Zehavi Wednesday | When Currencies Fail: A Primer on the Crisis in Lebanon Thursday | From Corrupt To Broken: An Insider’s Analysis Of The Fed, feat. Danielle DiMartino Booth Friday | Why The Dollar Has Never Been Stronger Or More Set Up To Fail [Money Reimagined Pt. 1]

The first of a 4-part docu-style series on the battle for the future of money. In this first episode of Money Reimagined, we look at: Why US markets took so long to react How the stock market became a political utility Why, even before the crisis, “increasingly exotic forms of quantitative easing” were inevitable Why the bailouts have some investors accusing our entire market of being cronyism rather than capitalism What unlimited money printing means for the US dollar. Featuring insight from Matthew Graham, Caitlin Long, Scott Melker, Kevin Kelly, Ben Hunt, Luke Gromen, Travis Kling, Mark Yusko, Anthony Pompliano, Jared Dillian, Dave Portnoy, Michael Casey, Preston Pysh, Peter Zeihan Music by DJ J-Scrilla "Faith In My Money (Money Printer Go Brrr)" from the “Sound Money” album.