<story><title>The Capital Sponge</title><url>https://www.lynalden.com/january-2022-newsletter/</url></story><parent_chain><item><author>reactspa</author><text>I would love for someone to find holes in the reasoning in this article (my own Macro Econ skills are not that good).&lt;p&gt;The author is a major voice in bitcoin circles (search their name with the word &amp;quot;bitcoin&amp;quot; or &amp;quot;crypto&amp;quot; on youtube). And I find it notable that they don&amp;#x27;t mention bitcoin or crypto anywhere in this post.</text></item></parent_chain><comment><author>nostrademons</author><text>I generally love Lyn Alden&amp;#x27;s writing but I think this is one of her weaker articles.  Better long-term perspective can be found here:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.lynalden.com&amp;#x2F;fiscal-and-monetary-policy&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.lynalden.com&amp;#x2F;fiscal-and-monetary-policy&amp;#x2F;&lt;/a&gt;&lt;p&gt;Along with a recent article (which I can&amp;#x27;t find - I think she takes them premium once they&amp;#x27;ve been out for a while) where she said that the Fed is probably structurally unable to raise rates above inflation, but that won&amp;#x27;t prevent them from trying, and we can expect major stock market crashes each time they do.  That&amp;#x27;s pretty much all you need to know: long term, the stock market is going to infinity because the dollar is going to zero (or at least, a value much less than today), but in the short term the stock market could easily see drops of &amp;gt; 50% because it is so heavily levered on zero interest rates right now.&lt;p&gt;I&amp;#x27;d say that the the biggest hole is that her writing ignores coupling of political risk and financial risk.  (Probably out of necessity, given her audience.  Investing is pointless when you can&amp;#x27;t enforce property rights.)  Historically, when you get hyperinflation, you get disrespect for rule of law, civil disorder, collapse of infrastructure, and revolution in very short order.  Commerce can&amp;#x27;t survive in these conditions, let alone finance.  (This is one of the factors that accelerates inflation into hyperinflation - as predictability disappears, so does production, leading to even more scarcity.)&lt;p&gt;Lyn&amp;#x27;s predictions exist in the uncanny valley where the petrodollar system collapses and the dollar loses its reserve currency status, but we still retain Internet access, orderly financial markets, bank accounts, property rights, and physical security.  I&amp;#x27;m not sure this is a given.  Historically, transitions to a major new economic system inevitably require a war or at least a revolution, because the winners of the previous economic system will not give up without a fight.  There&amp;#x27;s no guarantee that the new government will honor property rights guaranteed by the old one.  (In fact, in most cases the new government explicitly strips property from the previous wealthy elite, and that&amp;#x27;s a major part of its appeal to the common people.)</text></comment>
<story><title>The Capital Sponge</title><url>https://www.lynalden.com/january-2022-newsletter/</url></story><parent_chain><item><author>reactspa</author><text>I would love for someone to find holes in the reasoning in this article (my own Macro Econ skills are not that good).&lt;p&gt;The author is a major voice in bitcoin circles (search their name with the word &amp;quot;bitcoin&amp;quot; or &amp;quot;crypto&amp;quot; on youtube). And I find it notable that they don&amp;#x27;t mention bitcoin or crypto anywhere in this post.</text></item></parent_chain><comment><author>paulpauper</author><text>I don&amp;#x27;t think it&amp;#x27;s a good source of investment advice. Endorsing Bitcoin for example is a major flag. She is being paid to promote bitcoin services. I see this as a conflict of interest.&lt;p&gt;She makes assumptions that are wrong. like:&lt;p&gt;&lt;i&gt;The danger comes, however, if interest rates start going sideways, or even start going up, structurally.&lt;/i&gt;&lt;p&gt;except that stocks rose in 2016-2017 even as interest rates were rising. Same for the 90s.</text></comment>