The Breakdown

On this edition of The Breakdown weekly recap, NLW looks at what was an absolutely action-packed holiday week. 

He discusses:

One of the most significant macroeconomic questions facing the world is what the future of the global reserve system, dominated for the last 80 years by the U.S. dollar, holds. 

Today’s episode is a replay of NLW’s epic conversation with macro analyst Luke Gromen from April 2020. In it, Luke discusses the entire history of that U.S. dollar system, including:

• Bretton Woods and why the world went on a USD-based system rather than John Maynard Keynes’ idea for a non-sovereign “bancor” world reserve currency
• The move to the petrodollar in the 1970s
• The financialization of commodities that started in the 1980s
• The monetary policy vacuum after the Cold War ended
• How a shift in executive compensation rules led to many of today’s problems with Wall Street
• The export of Treasury bills as a business model
• The economic fallout of 2008 globally and domestically
• The end of Treasury bill buying in 2014
• Why the Federal Reserve is the only sugar daddy left

Find our guest online:Website: fftt-llc.comTwitter: @LukeGromen

When NLW asked Crypto Twitter for recommendations of the best way to convince friends and family about bitcoin and crypto, one of the ideas was to review old articles that have stood the test of time. 

With that in mind, NLW today reads Chamath Palihapitiya’s May 2013 piece for Bloomberg, “Why I Invested In Bitcoin.” 

Even among prescient early pieces, this one is particularly salient.

Today’s Breakdown is a prep kit for the inevitable conversations about bitcoin as friends and family sit down at the Thanksgiving table this year. 

NLW discusses arguments ranging from price action to who is buying to why they’re buying to good old-fashioned supply and demand. He leaves with one big conclusion:

If there was ever a year to discuss bitcoin, this is it. 

Today’s guest is Lyn Alden. Lyn is the founder of Lyn Alden Investment Strategy and one of today’s best-known and most-respected macro analysts. In this conversation, she and NLW discuss:

• Anti-deflation vs. inflation
• Why money printing is nonpartisan 
• Why we’re headed for deeper MMT experiments
• How she increased her conviction around Bitcoin (her journey in memes)
• Why the beginnings of a new, post-Bretton Woods era are starting to show 

Find our guest online:

Twitter: @LynAldenContact

Website: lynalden.com

Today on the Brief:

• AstraZeneca and University of Oxford release third positive COVID-19 vaccine trial data
• Trump administration ratchets up pressure on China
• Another DCEP lottery trial coming

Our main discussion: a narrative shift, growing attention and a bitcoin shortage.

What happens when demand exceeds supply and supply is being gobbled up aggressively by new market actors? That’s the question posed by Pantera’s recent investor letter and today’s Breakdown episode.

NLW also looks at:

• The reappearance of bitcoin (BTC, +1.08%) in mainstream media, like today’s Wall Street Journal
• The rise of celebrities coming out as HODLers
• BlackRock’s CIO suggests bitcoin could replace gold for many

On this week’s Long Reads Sunday, NLW reads Joe Nocera’s recent Op-Ed “Clayton’s Exit at SEC Opens Door to Protect Investors” from Bloomberg. 

NLW expands upon the piece, discussing Clayton’s legacy in crypto and how a Biden economic team might impact the space.

On this edition of The Breakdown weekly recap, NLW discusses:

• Traditional markets: The tension between vaccine optimism and a growing national wave of economy-disrupting lockdowns
• Regulatory landscape: Crypto ally Brian Brooks nominated for full term at OCC while SEC Chair Jay Clayton steps down early 
• Bitcoin Miners: Sold out until Spring
• Celebrities and Financiers coming to the Bitcoin space 

https://twitter.com/Maisie_Williams/status/1328428879334297600

https://twitter.com/RicardoBSalinas/status/1328850136290775041

Earlier this week, investor Nic Carter published a piece called “Nine Bitcoin Charts Already at All-Time Highs” showing just how far bitcoin had come and how fundamentally bullish this quiet run-up was. 

In this piece, NLW goes over those metrics that have achieved all-time highs, and adds one more that happened after Nic published his piece. The metrics include:

• Addresses with a balance of $10 or more
• Open interest on CME bitcoin futures
• Realized capitalization 
• Bitcoin options open interest
• Bitcoin priced in Turkish lira
• Bitcoin held by Grayscale
• Stablecoin free float
• Silvergate’s settlement network
• Growth of crypto-native credit
• Market Capitalization

Today on the Brief:

• Markets fight to remain optimistic 
• Jobless claims rise for the first time in five weeks
• China borrows at negative rates for the first time 

Our main discussion: a crypto ally as top bank regulator? 

Brian Brooks was an executive at Coinbase when he was tapped by Treasury Secretary Steve Mnuchin to be the number two at the Office of the Comptroller of the Currency, the nation’s main bank regulator. Within two months he was acting Comptroller and now Brooks has been nominated for a full term. 

In his short tenure, he has given banks the OK to provide custody of crypto and banking services to stablecoin issuers. In so doing, he has aroused the ire of congressional Democrats, who have accused him of acting too quickly and unilaterally on crypto. 

In this discussion, NLW breaks down Brooks’ time at the OCC and asks whether he’s likely to be confirmed before the next administration early next year.