Lyn Alden: Energy Crises, Inflation, and the Lack of Sound Money
Tom welcomes back Lyn Alden, Financial Newsletter Editor & Publisher, to the show. Lyn discusses the difficulty of safely storing wealth from the perspective of inflation and financial censorship. The current world financial system is composed of 180 local monopolies, within which governments demand that wealth is kept, but most are terrible at preserving value. Out of these, only a dozen are any good at holding value. The current system has many inefficiencies and brings significant risk to most.
Half of the world lives under varying levels of authoritarian governments, which often use the financial system as a weapon and have banks that censor global payments.
Historically, money operated at the speed of commerce, but this changed with the advent of modern communications. This delay between payments and delivery of goods has given governments and banks room to arbitrage. Lyn finds value in Bitcoin and some stablecoins, but she describes some of the problems and risks associated with crypto projects.
She also discusses the decline in the Federal Reserve’s remittances function and its impact on the U.S. Government’s finances. Lastly, she discusses the world’s energy requirements and the declining lack of return for what is being invested. Developing nations are looking for cheap, effective energy solutions, while wealthier countries are in a better position to adjust to new technology. She expresses concerns about the lack of capital investment in oil and how this spills over into mining.
Time Stamp References:
0:00 – Introduction
0:32 – Inefficient Money
4:03 – Financial Censorship
7:06 – Commerce & Money
11:50 – Crypto & Confidence
16:18 – Digital Gold?
20:30 – 2023 & Asset Growth
22:30 – Structural Inflation
24:44 – Fed Remittances
30:34 – Bank Loans & Yield Curve
31:14 – Energy & Inflation
38:43 – EROI & World Needs
45:00 – ESG & Trade Offs
46:55 – CapEx & Oil Sector
52:25 – PM Mining & Industry
56:13 – Key Questions in 2023
58:18 – Wrap Up
Talking Points From This Episode
- The current world financial system is composed of 180 local monopolies, with very few of them being able to effectively preserve value.
- Governments and banks have taken advantage of the lag between payments and delivery of goods to arbitrage, creating significant risk for most.
- Lyn discusses the declining lack of return for energy investments, and the lack of capital investment in oil and mining.
Energy Article: https://www.lynalden.com/energy-problems/
Money Problems: https://www.lynalden.com/december-2022-newsletter/
Lyn Alden is editor and publisher of LynAlden.com, where she has both a subscription and a free financial newsletter. She says, “Her background lies at the intersection of engineering and finance.” Her site provides investment research and strategy, covering stocks, precious metals, international equities, and alternative investments, with a specialization in asset allocation. Whether you’re new to investing or experienced, there’s a lot there for you.
Lyn has a bachelor’s degree in electrical engineering and a master’s degree in engineering management, focusing on engineering economics and financial modeling. She oversees the finances and day-to-day operations of an engineering facility.
She has been performing investment research for over fifteen years in various public and private capacities. Her work has been editorially featured or cited on Business Insider, Marketwatch, Time’s Money Magazine, The Daily Telegraph, The Philadelphia Inquirer, The Street, CNBC, US News and World Report, Kiplinger, and The Huffington Post. She has also appeared on Real Vision, The Investor’s Podcast Network, The Rebel Capitalist Show, The Market Huddle, and many other podcasts. She is also a regular contributor to Seeking Alpha, FEDweek, and Elliot Wave Trader.