In this episode of The Block Reward, host Scott Dedels and guest Kevin Coldiron discuss the complex issue of carry trades and their influence on global financial markets. They explore the role of central bank interventions, the challenges of the current economic climate and the need for a reformed monetary system. Kevin shares his perspective on the potential for a post-carry monetary system and the fragility introduced by excessive carry trades. The conversation also touches upon Bitcoin's relevance in addressing these financial system issues.

Kevin Coldiron is a Lecturer in the Financial Engineering Program at U.C. Berkeley’s Haas Business School and host of the Ideas Lab podcast series on the Top Traders Unplugged platform. Prior to joining the Haas faculty he co-founded Algert Coldiron Investors (ACI), a San Francisco-based quantitative hedge fund. He previously headed the hedge fund business at Barclays Global Investors in London and has also worked as a currency market analyst at the Federal Reserve Bank of New York. Kevin has an MBA from London Business School and a BSc in Finance from the Pennsylvania State University.

Kevin is co-author with Tim and Jamie Lee of The Rise Of Carry which was a top-selling investment book on Amazon and awarded the 2020 Globie for Globalization Book of the Year. He has been featured on top podcasts such as Bloomberg’s OddLots and Hidden Forces. He publishes a one-page newsletter called The Ideas Lab: New Ways To Understand Global Markets, which summarizes his writings, interviews and research. His regular articles for Forbes can be found at: Kevin Coldiron's Forbes Articles.

What We Discuss:

(00:03:55) What does the term "carry trading" mean, and what is the impact on the global financial system?

(00:15:12) The impact central bank interventions have on carry trading.

(00:26:11) How carry trades increase liquidity in financial markets and promote the money-ness of various assets.

(00:29:43) The interconnectedness of different central banks and the impact on global markets.

(00:34:29) The yen carry trade, its impact on the Japanese currency and the challenges faced by the Bank of Japan.

(00:42:29) The necessity and structure of central banking in the modern world and the need for a lender of last resort.

(00:48:09) The potential role Bitcoin has to be a solution to the challenges posed by central banking.

(00:53:08) The relationship between inflation, asset prices and the sustainability of the current economic system.

(00:55:31) Exploring the potential future of the monetary system, the role of central banks and the challenges in designing a post-carry monetary system.

Episode Resources:

Kevin Coldiron | Newsletter

The Rise of Carry | Website

Ideas Lab | Podcast