Joseph Wang (@fedguy12), the CIO of Monetary Macro and a former senior trader on the Open Markets Desk, joins Julia La Roche on episode 69 for a wide-ranging conversation on the monetary system, macro economy, and recent banking panic. 

Wang is also the author of Central Banking 101, which is now an Amazon best-seller, and operates Fedguy.com, a blog on developments in the financial markets.

During this episode, Wang said it’s almost inevitable that the U.S. will have a decade of persistently high inflation. He also mentioned that this trend is difficult to combat and is driven mainly by the culture and politics of the era. According to Wang, we are in the early stages of the inflationary cycle.

0:00 Introduction

1:40 Welcoming Joseph Wang on the show

2:11 From practicing law to trading on the Open Markets Desk

3:20 Practicing law is boring

4:02 Graduating in 2008 

5:38 Open Markets Desk at the Fed 

7:02 Central Banking 101 

8:26 Misconceptions around the monetary system 

10:50 Disconnect between school and real-life in macro

11:58 Commercial banks create money out of thin air 

13:49 Eurodollar system 

16:42 Eurodollar futures market 

19:08 Market is fighting the Fed 

20:17 Eurodollar banking 

21:33 De-dollarization

24:00 There aren’t a lot of good alternatives to the U.S. Dollar

25:00 What it takes to be a reserve currency 

25:45 Weaponization of the U.S. Dollar 

26:58 Bitcoin 

28:06 Will the U.S. Dollar lose its reserve status in our lifetime? 

28:47 Implications of the U.S. dollar losing its global reserve status 

30:33 Inflation will be a lot higher than we are used to 

31:08 Big driver of inflation is the culture and politics of the era

34:27 Macro outlook 

35:46 Demographic changes

39:48 Banking crisis is over 

44:42 Intervention during the banking crisis 

49:19 Is banking safer for depositors? 

50:15 Fed is in inflation-fighting mode 

53:38 Parting thoughts