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Bitcoin & Markets

Mar 15, 2021

Full show notes and links:

In this episode, I attempt to clear up why I think Lyn Alden is using a Triffin-style premise and my problem with the Triffin dilemma in general. I've noticed people using Triffin-style arguments even more in the past couple of weeks, and it is very important that we have the tools to evaluate if this is the proper framework from which to build an understanding of the financial system.

I quote heavily from Lyn and the BIS in this episode, drilling down the essense of the problem with the premise of deficits being the basis for foreign reserves of the dollar. Short answer, they aren't. There's very little evidence that deficits matter to foreign reserves at all, or that they play more than a very small role. The single most important source of foreign reserves is the eurodollar market.

If we clear our minds of the role of deficits, then what is the argument for the unsustainability of the USD system? Well, it boils down to the end of a gigantic global credit bubble enabled by the Pax Americana.

Hope this helps clarify.

Stay tuned for the next episode on NFTs and fungibility. It will be a satisfying episode.



The Fraying of the US Global Currency Reserve System - Lyn Alden

Fraying with my highlights

Why Trade Deficits Matter - Lyn Alden

BIS Report - Triffin: Dilemma or Myth?

BIS Report with my highlights