The Breakdown

Cities around the country have been engulfed in protest in the wake of the murder of 46-year-old black man George Floyd. There is an intense battle for the narrative around the protests. Are they legitimate outcries against institutional racism and police brutality? Is the looting covertly being driven by white supremacists on the one hand or ANTIFA on the other? 

In the Bitcoin community, some have plumbed the “Bitcoin Fixes This” meme to argue that the core underlying issue has to do with a monetary system that structurally creates inequality. Others have clapped back against pushing that meme in this moment. 

In this episode of The Breakdown, NLW looks at:

• What bitcoiners are trying to say when they apply the “Bitcoin Fixes This” meme to this moment.
• Why the current system structurally exacerbates inequality.
• Why the meme fails to capture additional economic, political and power dimensions of what’s going on.
• Why the meme in this moment might feel so out of place as to inspire the opposite of its intended effect: turning people away from bitcoin rather than making them want to learn more.
• Why Satoshi’s “If you don’t get it, I don’t have time to explain it to you” quote is the most misused and abused of his sayings.
• Why complexity and nuance, not memes, are needed now.

The week's episodes in one convenient file. 

• Monday | Best of April/May (not included in Weekly Recap) 
• Tuesday | Deglobalization and Other Narrative Violations, Feat. Geoff Lewis

As the economic dimension of the COVID-19 crisis comes into clearer view, what have we learned about the battle for the future of money? Does the dollar reign supreme? Are within-the-system competitors like the euro or China’s digital yuan gaining ground? Does an outside the system alternative like bitcoin stand a chance? 

Over the last month, the “Money Reimagined” series has looked at the battle for the future of money. 

Episode 1 focused on the dollar and why it is simultaneously stronger and more set up to fail than ever before. 

Catch up: Why the Dollar Has Never Been Stronger or More Set Up to Fail

Episode 2 was all about the obvious contenders to replace the dollar such as the euro or China’s currency, especially as they race towards a digital yuan. It also looked at where Facebook’s Libra might fit in the mix.

Catch up: The Rise of the Dollar Killers

Episode 3 looked at one of the most unique features of this modern currency battle - the fact that there are fundamentally new systems like bitcoin in the running. Can a non-sovereign currency actually be more relevant than global fiats? 

Catch up: Where Bitcoin Fits in the New Monetary Order

This final episode of the “Money Reimagined” series checks in on each of the previous episodes but brings a new set of voices to the mix. Between May 11 and May 14, CoinDesk hosted Consensus:Distributed, a virtual summit featuring some of the leading lights in crypto, finance, economics and pop culture. In this episode, we hear from those voices, including:

• Lawrence Summers - former U.S. Treasury Secretary
• Christopher Giancarlo - former Chairman of the CFTC
• Michelle Phan - YouTube innovator and founder of Ipsy
• Chaoping Zhao - founder and CEO of Binance 
• The Winklevoss brothers - founders of Gemini 
• The Chainsmokers - Grammy-winning artists 
• Carlota Perez - influential economist 

You know the meme: Money printer go brrr. It means inflation right? 

Not necessarily, says Brent Johnson. Since 2016-2017, Johnson has been arguing the big economic issue of our time isn’t inflation of the U.S. dollar due to excess money printing, but the havoc caused by a global system where the dollar keeps getting stronger and sucks up liquidity from the rest of the world. 

As the dollar has strengthened over the COVID-19 crisis, his ideas look more prescient than ever. In this conversation with NLW, Johnson discusses:

• What the “Dollar Milkshake Theory” is 
• Why the implications of the theory stress him out, even though he created it
• Why everything is relative and no asset can be analyzed in a vacuum 
• Why we could see the dollar, bitcoin and gold rise at the same time 
• Why we can’t discuss macroeconomics without discussing geopolitics and even the military

Twenty-one different people can reasonably claim to have invented the light bulb, but Thomas Edison is the one we know about. Was it just good PR? According to Matt Ridley, it was because Edison was the progenitor of an “innovation factory” that didn’t just create things but brought them to market in a way no one else did. 

Innovation is one of the most important forces in the economy, and arguably the most important driver of human prosperity over the last century. Yet, for most of its life, it has been viewed as some strange exogenous force, rather than as a discipline that could be understood. 

In this conversation with NLW and Ridley discuss:

• Why it took so long for economists to take the study of innovation seriously 
• Why invention is different from innovation 
• Why innovation has tended to concentrate in geographically proximate areas
• Why free societies produce more innovation than closed societies (including empires)
• Why China’s innovation production over the last decade may be an exception that proves the rule of innovation thriving in freedom
• Why government winner picking is a terrible way to inspire innovation
• Why innovation policy led Matt to support Brexit 
• The rational, optimistic take on the future

The battle to control narratives is the battle to shape how people understand the world around them. But the traditional gatekeepers of narratives - the media - have never had more competition to shape what is perceived as truth. 

In this episode, NLW speaks with Bedrock Capital founder Geoff Lewis about what it means to seek out opportunities in “narrative violations.” They also discuss: 

• Why de-globalization and “onshoring” are likely to be among the most important economic drivers in the U.S. in the coming decade
• Why the shift to working from home may be an overblown “narrative mirage” 
• How important questions of institutional decay have been co-opted by the culture war 
• Why independent, individuals in the media have more influence than ever
• Why we’re in a “narrative mirage recovery”

• 4/1 - Peter Zeihan on why the world we’ve known for 30 years is changing forever
• 4/6 - Emerson Spartz on a moment of punctuated equilibrium 
• 4/17 - Jared Dillian on the political football of stock buy backs
• 4/21 - Joe McCann on how financial engineering came to dominate Wall Street
• 4/22 - Luke Gromen on the genesis of the global monetary order and why the US switched off the gold standard in 1971
• 5/1 - Danielle DiMartino Booth on how the Federal Reserve moved from incompetent to corrupt 
• 5/9 - Niall Ferguson on a shift back to a multipolar, multi-currency world
• 5/14 - Jeff Booth on why technology deflation competes with inflationary monetary policy 
• 5/20 - Lyn Alden on the negative impacts of a too-strong dollar
• 5/22 - Tuomas Malinen on why dismantling the Euro may be the only way to save the European Union 

The complete week's shows in one convenient episode

• Monday | Economic Freedom in the World After Capital, feat. Albert Wenger
• Tuesday | Lessons from the Financial History of Pandemics, feat. Jamie Catherwood
• Wednesday | Why a Strong Dollar Is Bad for the US and Bad for the World, feat. Lyn Alden
• Thursday | ‘Dismantle the Euro to Save Europe’ Feat. Tuomas Malinen
• Friday | The Shadow of Satoshi’s Ghost: Why Bitcoin Mythology Matters

On Wednesday, a batch of coins mined just a month after bitcoin’s birth were moved. It was the first time since August 2017 that any bitcoin from early 2009 had been transferred, and the action set Bitcoin Twitter on fire. While a number of bitcoin archaeologists quickly and persuasively argued the tokens were almost assuredly not mined by bitcoin creator Satoshi Nakamoto, it was a moment that reinforced the living history in the bitcoin ecosystem. 

In this episode, NLW looks at what makes the Satoshi mythology powerful: 

• Genuine technical innovation and problem solving that had stymied some brilliant minds for decades
• Incredible instincts around narrative and human psychology, as reflected in the “Chancellor on the Brink” message embedded in the Genesis Block and the ceremony around the halving
• The incredible contrariness of a creator withdrawing in a world where entrepreneurs are lionized like no one else in society

And while the battles within the bitcoin community around interpretation may look more like the early history of religions than like a business ecosystem, NLW argues that fervor is a key part of what de-risks bitcoin, even for investors who don’t at all care about the mythology. 

The European Union and the euro are part of the most ambitious political and economic experiment of the 21st century. The COVID-19 crisis, however, has exacerbated growing questions of political will and political legitimacy and led some to wonder if the eurozone can survive. 

Tuomas Malinen is the CEO of GnS Economics, a macroeconomic advisory firm, and Adj. Professor of Economics at the University of Helsinki. In this interview, he and NLW discuss:

• Why the European debt crisis was actually a “morally corrupt bank recapitalization project”
• Why negative interest rates and quantitative easing made the European banking sector particularly weak even before the pandemic 
• Why the German Constitutional Court’s battle with the European Central Bank has major implications for the entire euro system
• Why European leaders are pushing for deeper integration when citizens want more lightweight integration
• Why European nations would be more likely to support one another in bilateral arrangements rather than through forced solidarity 
• Why the only way to save the European Union might be to let the euro fade away