Tom Bodrovics welcomes Lyn Alden, the founder of Lyn Alden Investment Strategy, to discuss the economic implications of recent geopolitical events, particularly the Iran war, and its impact on the U.S. economy and financial markets. Alden emphasizes that fiscal dominance and sovereign debt crises often coincide with periods of war, complicating the investment landscape. She maintains that her base case scenario for the Federal Reserve’s balance sheet growth remains a “gradual print,” where the Fed will end quantitative tightening and transition to a gradually rising balance sheet in line with normal GDP or bank deposit growth.

Alden highlights that the war in Iran, while expensive, is not a game-changer for the U.S. economy in the short term. However, it adds variance and uncertainty to the gradual print scenario, pulling forward the risk of a more significant print if the conflict escalates. She notes that the Fed’s primary concerns are disruptions in the interbank lending market and the Treasury market, both of which have shown minor stress but remain stable.

The discussion also touches on the impact of higher energy prices on the economy and the housing market. Alden believes that a prolonged energy price spike could affect housing affordability and market sentiment but does not expect a housing market collapse in the near term. She also discusses the role of liquidity in financial markets and how assets like Bitcoin and gold can serve as proxies for global liquidity. Alden concludes by advising investors to expect elevated shocks and headlines due to the current geopolitical and economic environment.

Timestamps:
00:00:00 – Introduction
00:00:28 – Fiscal Dominance and War
00:01:42 – Gradual Print Base Case
00:03:14 – War Costs and Oil
00:04:49 – Fed Printing Triggers
00:08:36 – Market Stress Indicators
00:10:17 – Tax Season Liquidity
00:13:05 – Short End Curve Focus
00:16:01 – Fed Chair Personalities
00:23:53 – Housing Market Risks
00:27:58 – Bitcoin Liquidity Proxy
00:34:38 – Precious Metals Valuation
00:39:03 – Multipolar World Assets
00:44:00 – Japanese Debt Markets
00:49:25 – Concluding Thoughts

Guest Links:
X: https://x.com/LynAldenContact
Website: https://lynalden.com

New Novel: https://www.lynalden.com/the-stolguard-incident/
Amazon Book: https://tinyurl.com/lynaldenc

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.