I love this content! Great guest. Can't get enough of experts who know their monetary ropes.

Wow! I’m reading Cullen’s book because Ben recommended it in one of his videos.

All the inflation discussion hit me hard, most people in the developed world, thankfully because it is horrible, don't understand the meaning of high inflation , i am from Venezuela so I know what is like to live in a Country that averaged an annual inflation rate of over 10.000% over the last decade. So I can say that i empirically tested what was said in the episode and i confirm it is true.

awesome guest, his book is great!

Amazing episode guys. Thank you and best regards from Czech republic (Prusa 3D printers approved :D ).

The brilliant Cullen Roche! I've been looking forward to this

Excellent discussion guys! Cheers! Take a drink every time someone says credit!

Love Cullen he is always grounding me and bringing calm

Thank you very much. Insightful episode :)

My mind got absolutely blown around 35:00

I'm here after watching your videos on Quantitative Easing and how the FED creates bank reserves. I hope I can learn more about this topic.

Fantastic conversation! I learned so much.

fucking brilliant once again. Good to hear an antithesis to a lot of the noise being paraded around YT

Central banks are "essential banks", very true. But I think that was a typo. 23:30

Awesome

Boom!

USTs are different to USDs. USTs have duration risk related to inflation expectations. In a rising inflation environment the nominal price of a bond will be under pressure. Heaven forbid if if we hit 'stagflation' (low growth + inflation). Fixed rate bonds get smashed in stagflation.

Cullen is excellent but in my view QE supported deficit spending is only happening because the 'takers' of USTs are too few and far between. Foreign purchases of USTs are heavily influenced by interest rate spreads between various sovereign bonds plus FX hedging costs. If foreigners fear that UST supply is about to explode or believe that FX hedging cost is too high, then they back away from those UST auctions. Enter the FED to give the Primary Dealers someone to sell those UST to.

Why is Connor Mcgregor talking about finance?

So the Federal Reserve sets the price that banks pay for settling their net balances during the overnight settlement process through the likes of the CHIPS interbank clearance system and the provides a last resort to help banks clear their balances when there is a credit crunch as there was back in 2007.

A nice rebuttal against all the crypto and goldbug hype floating around on KZread.

@tylerwallace258

3 жыл бұрын

How is this a rebuttal against all crypto? Stablecoin is being solved via USDC which has a centralized tie into it, and recently announced as an option for banks to ACH in the U.S. The credit part is covered via Ethereum which has decentralized exchanges, decentralized finance apps, and vaults/bank accounts for lending and borrowing. I don't think he did enough research, and just throwing out the word "Bitcoin" is doing the entire cryptosphere a disservice.

Gov't that finance themselves with debt issued in their own currency won't go bankrupt but..............the currency is the release valve. If the govt prints too much debt and creates too much money relative to economic growth then the currency exchange rates fall. This leads to import inflation which in turn puts pressure on real rates of return which in turn dampen investor demand for that countries assets.

Raoul Pal of REAL VISION fame has made a big deal in the past year that 'real wage growth' in USA has been negative over a multi decade basis..........helping explain how even in the face of disinflation and falling nominal rates, the US worker has gotten poorer (purchasing power has fallen). He ties this mostly to wage arbitrage via exporting jobs to emerging markets.

I don't quite follow the point at around 20:00 where he makes the argument that the fixed supply of "money" in cryptocurrencies is a detriment because it doesn't allow for lending. Since money is a store of value why would an increase in value not allow for lending without necessitating a corresponding increase in money?

@thao6112

3 жыл бұрын

Increase value doesn’t necessitating the increase in that money’s supply. For example, Bitcoin can shoot to the moon to 250k per coin, doesn’t mean the supposedly set number of available bitcoins will double or triple from the limit of 21 millions or so bitcoins, right? He explains why if you continues to listen...the supply of whatever acceptable “money” should be able to expand or contract to serve the people’s and the economy’s need. If, for example, you want to use bitcoins as your country’s currency, how would trades and lending be facilitated using a limited available number of bitcoins in circulation in your economy? Will there be enough bitcoins to change hands in these transactions? How about since the supply is so limited and these cryptocurrencies so volatile, would you lend out a bitcoin or use a bitcoins or two to buy a car if you think, like so many on KZread, that it will increase by 40%, 50% or even double in value in the near future? Limited supply of money limits the business transactions and practices such as lending within that country and therefore the growth of its economy. The opposite of that is too much money which is discussed here and none stop elsewhere for the past several years. By the way, “cryptocurrency” in a way already existed all these times...think of credit and debit cards transactions. They’re still supposedly backed by fiat currency, but they’re digital 1s and 0s nonetheless.

Fast fwd a year later and this didn't age well. Record high inflation at the cost of the money printer. Such is life.

@SpaceTravel1776

2 жыл бұрын

Was it the "printer", or was it disrupted supply chains and high energy costs? It's possible there would be inflation now even if there had never been QE. There's more to the equation than just demand.

@muffemod

2 жыл бұрын

@@SpaceTravel1776 Recession > QE > Inflation > Rate Hikes > Repeat

@SpaceTravel1776

2 жыл бұрын

@@muffemod oh yeah, QE has such a long history going back hundreds of years, clearly enough data to establish that cycle.

@muffemod

2 жыл бұрын

@@SpaceTravel1776 To be fair most academic studies are good with citing 40 years, so um yea.

I'm a Brit and so not much good at US accents, but... doesn't he sound a lot like Eminem?! :)

I remember when these ideas were considered crackpot conspiracy theories, lol.

These guys are only more "rational" then the trolls on the internet. The video was not worth watching. The most relevant point they missed was who gets the profit? If you peg wages to inflation, you automatically funnel all productivity gains to the owners of capital (aka, people who are already rich). I also think it was dishonest to reference 1913 as a gauge for how things have "gotten better". The reference period is the 1970s, which is the point in time where Regan, Thatcher, Milton Friedman and a whole host of other people championed the reforms on capitalism that prioritized benefit to the shareholders at the expense of all other stake holders, such as labor. Too bad he didn't reference what may have caused inflation in that period. In other words, the entire economic system is designed to benefit investors like these guys over mere wage earners in the real economy. Maybe something else they should have discussed whether or not having capital gains taxed at a lower rate than income is actually helpful for the real economy?

@Merth667

2 жыл бұрын

The shareholders get the profit. Because they own the company.

Roche is right about "tidbits." I dare say there were 5 or 10 minutes of wonderful tidbits of info and insights buried in his rambling. I just don't think it was worth an hour and 22 minutes of my time. Hosts, please consider EDITING future interviews to highlight what's of real value.