When you really know your stuff, you can explain it with great simplicity, so it makes sense. Thank you macro ALF for your great explanation of the banking system.
Everytime i hear Alf i learn something, and this is by far the best intro for dummies and so called financial experts alike on how the world monetary system works. Top work Alf! and Pete/Danny for the interview.
I have been looking for an episode like this. To finally have a clear explanation of money creation for plebs like me. It’s how I stumbled into WBD…searching for that explanation on Apple Podcast, finding the few episodes of Peter interviewing Lyn, and going down the BTC rabbit hole. Very thankful for this show!
So good! love Alf! been watching him and A. Steno-Larsen last couple of years... always SO reasonably measured in breaking down BIG picture topics. Macro Compass kicks ass. Alf should have wore his "Dont Fight Demographics" Tshirt... thanks guys, another banger episode! one of my favorites of the year!
This was insanely good. I've read Alf's threads explaining this stuff but his vocal delivery is much better. Looking forward to you having him back on.
Brilliant episode. I think that at the edge of this is why bitcoin may never be a solution that is truely broad based. I just can't see nation states allowing a competitive "currency" that is inherently deflationary to take the ability to "guide" their economies away from them. Peter, when you get Macro Alf back, I would love to see this angle explored. Once again, one of the best places to go for modern and well educated thinking about finance and crypto. I would love to see Macro Alf and Lyn Alden together with you two for further discussion.
For anyone wondering as I was, Macro Alf has 2% of his assets (real estate, stocks, etc..) in digital commodity AKA Bitcoin. That was lower than I expected but I suppose makes sense. Lovely explanations and a great podcast, thanks gentlemen!
Excellent! Art Laffer in a recent talk with Cathie Wood described the need for an elastic component to bitcoin ecosystem possibly through Lightning Network and/or Federated Minting. I’m working on the software/hardware that make make this reasonable without undermining core bitcoin value.
Some really good observations. If Alf, would only make the distinction between technology (currency) and money (always a situational legal) agreement, he would make a quantum leap towards identifying potential solutions. As is, it is an intellectual engagement with well beaten strawmen.
Danny thank you for your efforts to have Makro Alf on the show, Peter thank you for the questions in the last stamp. Hey bitcoiners! The answer to all your questions is there, in the last stamp;) Well done guys !
How are more banknotes created? In 2020 we received checks, is more physical cash created in this process? From my understanding bank reserves are digital, are more banknotes produced in the process of quantitative easing?
Macro Alf did a very good job explaining a system the majority of people don't have a clue about. If you want another good explanation about the money system I can recommend Mike Maloney's "Hidden Secrets Of Money" series.
Deficit spending: on the liability side we have a minus deficit spending or negative equity. But on what happens on the Asset side on the balance of the Government?? Minus Tga ?
The convo around bank reserve’s doesn’t make sense. Bank reserves are denominated in Dollars in the US? If you have sustained excess reserves can you lend them out to non bank entities? Like what the hell are bank reserves if not dollars that have to be retained as a percentage of deposits? This feels like when Balaji describes how the people in the industry intentionally make everything opaque and confusing.
Can the central bank force commercial banks to sell treasury bonds as part of the issuing more reserves to them ? What if I as a commercial bank am not interested.
This take from Macro Alf is misguided. Yes technically bank reserves are not in themselves used to create loans. However in the ABSENCE of bank reserves 'top ups' for banks their lending capacity would fall due to overall balance sheet pressure to meet regulatory requirements. This is so easy to understand and poorly articulated by Alf. I like Alf and he has some amazing content and is a valuable thinker. He's just not well articulated this concept and its implications.
He also then goes on to argue that this mechanism (inter bank transfers of reserves) has absolutely no bearing or impact on inflation. This would be true only in a very technical sense and would ignore all second and third order effects of the central bank actions (i.e easing via injection of bank reserves).
1. First Condition: 'Banks dont chase loans they must wait for credit worthy applicant to approach.' This is utterly incorrect. Banks do chase loans aggressively to match their internal risk profile targets (of which bank reserves play an integral component of this calculation regarding risk exposure).
Notice how all these Keynesian economists lose their intellectual footing when hypothesising over a firm monetary standard. Its a major red flag. Notice the brevity of his answer. He admits the current system refuses to operate effectively in a countercyclical manner but then immediately uses that argument against a firm monetary standard (i.e. too inflexible).
So when they sell the soybean and then want to move the money into something trustworthy and liquid does Bitcoin in theory potentially take that role? Wish this was addressed in the video
Imagine if no monetary systems existed (this is sci-fi btw) Aliens arrive on Earth and issue an edict, "We want to create a monetary systems to be used here and need two proposals for this." One group presents a fiat based system with some possible hard assets. The second group presents Bitcoin. Which one gets chosen?
I was thinking this way 10 years ago and bought a lot of physical gold (alas not bitcoin). The debt spiral was in full force then. Truth is that it's going to be a long time before the collapse .... I would guess at least 10 more years. The biggest problem is that 99% of the population have no idea that the problem even exists.
Thank you. I was the very first one to comment on this video suggesting exactly that, but somehow that comment got deleted. When Alfonso started to talk about Japan it became clear to me immediatelly he ain't got a clue what he's talking about in terms of how it used to work in Japan when it comes to money. Besides, Richard Werner is the one who coined the term "Quantitative Easing" anyways.
Surely if banks can buy government bonds with bank reserves then the reverses become real economic money through government sending? And therefore bank reserves can be inflationary?
Another thing that confused me or maybe I didn't understand, he says bank reserves can't go into the real economy but then says that if there are major deposit outflows, the bank can get reserves injected by the central bank if required, therefore reserves are being withdrawn and can be spent?
again Alf is not telling the whole story. As Lyn has explained, when QE is done to fund the bond issuance of the gov to facilitate fiscal spending (deficits) then QE is real money printing. In 2020, QE was real money printing. The dealers would not have bought the bonds if they didn't know the FED would buy these bonds from them immediately.
Really 😂😂 Pete this guy in a Bitcoin podcast I would rather listen to Pete Rizzo and the root again Alf is a wash out bonds trader nothing he says has seen the light
Need to watch this multiple times.
Peter is great at interviewing these macro guys. I've seen a lot of Alf before but this is the clearest I've heard him explain the financial system
It’s for us layman
What a great episode. Very cleary explained and educational. Thank you Macro Alf , Peter and Danny. 👍
Love Alf, really clear explanation of unnecessarily complex structures
When you really know your stuff, you can explain it with great simplicity, so it makes sense. Thank you macro ALF for your great explanation of the banking system.
Everytime i hear Alf i learn something, and this is by far the best intro for dummies and so called financial experts alike on how the world monetary system works. Top work Alf! and Pete/Danny for the interview.
This is such a great episode! Alf makes expert’s knowledge dummy proof. Please have Alf come more on the show.
I have been looking for an episode like this. To finally have a clear explanation of money creation for plebs like me. It’s how I stumbled into WBD…searching for that explanation on Apple Podcast, finding the few episodes of Peter interviewing Lyn, and going down the BTC rabbit hole. Very thankful for this show!
So good! love Alf! been watching him and A. Steno-Larsen last couple of years... always SO reasonably measured in breaking down BIG picture topics. Macro Compass kicks ass. Alf should have wore his "Dont Fight Demographics" Tshirt...
thanks guys, another banger episode! one of my favorites of the year!
I learn a lot in this episode, such a great episode. Lol they didn't even teach this in college even though I have a degree in economic.
He's brilliant. Thank you for having him on. This one was very useful for me.
This was insanely good. I've read Alf's threads explaining this stuff but his vocal delivery is much better. Looking forward to you having him back on.
This was just brilliant and amazing. Thank you so much for this free educational content.
Brilliant episode. I think that at the edge of this is why bitcoin may never be a solution that is truely broad based. I just can't see nation states allowing a competitive "currency" that is inherently deflationary to take the ability to "guide" their economies away from them. Peter, when you get Macro Alf back, I would love to see this angle explored. Once again, one of the best places to go for modern and well educated thinking about finance and crypto. I would love to see Macro Alf and Lyn Alden together with you two for further discussion.
No fud, no doom porn (I kinda miss that actually), just pure uncontroversial facts. I love it.
Thanks for this one.
Great informative episode..this guy is a natural teacher...much appreciated
This might be one of the best WBD podcasts, and I have watched them all.
This was a great source of information! Thank you Peter
Great episode! Beautiful explanations and simple to understand
For anyone wondering as I was, Macro Alf has 2% of his assets (real estate, stocks, etc..) in digital commodity AKA Bitcoin. That was lower than I expected but I suppose makes sense. Lovely explanations and a great podcast, thanks gentlemen!
Awesome show guys, best in many many months
Yes, Macro Alf! I have been waiting for this one.
Great work Pete. Wish I was over in Bedford!
Excellent! Art Laffer in a recent talk with Cathie Wood described the need for an elastic component to bitcoin ecosystem possibly through Lightning Network and/or Federated Minting. I’m working on the software/hardware that make make this reasonable without undermining core bitcoin value.
My new favorite WBD episode by a long shot 🥂
What an explanation of the system! Amazing 🤜🤛
Good episode nice addition from blockworks where Al posts. Now Jim Bianco!
Some really good observations. If Alf, would only make the distinction between technology (currency) and money (always a situational legal) agreement, he would make a quantum leap towards identifying potential solutions. As is, it is an intellectual engagement with well beaten strawmen.
Fantastic session. Thanks, Peter. Saving this to my Bitcoin Gems folder.
Peter got himself a haircut! Well done!
Good episode. Very detailed.
Great content. I really learnt a lot from this. Thank you!
What a smart dude. Great monologue;)
Very informative. Thank you
Great explanation, thanks!
This guy explains so well.
Danny thank you for your efforts to have Makro Alf on the show, Peter thank you for the questions in the last stamp. Hey bitcoiners! The answer to all your questions is there, in the last stamp;) Well done guys !
one of the best, real value !
Amazing podcast
How are more banknotes created? In 2020 we received checks, is more physical cash created in this process? From my understanding bank reserves are digital, are more banknotes produced in the process of quantitative easing?
Macro Alf did a very good job explaining a system the majority of people don't have a clue about. If you want another good explanation about the money system I can recommend Mike Maloney's "Hidden Secrets Of Money" series.
Another excellent episode.
1992 - Internet :--). still here !
Was looking forward to getting Alf’s opinions on bitcoin. Next time
this was amazing
Great show, I learnt a lot.
Excellent. Thx!
Alf is great! Up there with Snider
Deficit spending: on the liability side we have a minus deficit spending or negative equity. But on what happens on the Asset side on the balance of the Government?? Minus Tga ?
I have a crush on this person he is so intelligent and easy to understand
Great info 👌😎🤟
amazing!
Aweaome show! Please…have him back on the show end of Q1,2024.
The convo around bank reserve’s doesn’t make sense. Bank reserves are denominated in Dollars in the US? If you have sustained excess reserves can you lend them out to non bank entities?
Like what the hell are bank reserves if not dollars that have to be retained as a percentage of deposits?
This feels like when Balaji describes how the people in the industry intentionally make everything opaque and confusing.
Can the central bank force commercial banks to sell treasury bonds as part of the issuing more reserves to them ? What if I as a commercial bank am not interested.
This take from Macro Alf is misguided. Yes technically bank reserves are not in themselves used to create loans. However in the ABSENCE of bank reserves 'top ups' for banks their lending capacity would fall due to overall balance sheet pressure to meet regulatory requirements. This is so easy to understand and poorly articulated by Alf. I like Alf and he has some amazing content and is a valuable thinker. He's just not well articulated this concept and its implications.
He also then goes on to argue that this mechanism (inter bank transfers of reserves) has absolutely no bearing or impact on inflation. This would be true only in a very technical sense and would ignore all second and third order effects of the central bank actions (i.e easing via injection of bank reserves).
1. First Condition: 'Banks dont chase loans they must wait for credit worthy applicant to approach.' This is utterly incorrect. Banks do chase loans aggressively to match their internal risk profile targets (of which bank reserves play an integral component of this calculation regarding risk exposure).
Notice how all these Keynesian economists lose their intellectual footing when hypothesising over a firm monetary standard. Its a major red flag. Notice the brevity of his answer. He admits the current system refuses to operate effectively in a countercyclical manner but then immediately uses that argument against a firm monetary standard (i.e. too inflexible).
Bravo!
So when they sell the soybean and then want to move the money into something trustworthy and liquid does Bitcoin in theory potentially take that role? Wish this was addressed in the video
Imagine if no monetary systems existed (this is sci-fi btw) Aliens arrive on Earth and issue an edict, "We want to create a monetary systems to be used here and need two proposals for this." One group presents a fiat based system with some possible hard assets. The second group presents Bitcoin. Which one gets chosen?
I was thinking this way 10 years ago and bought a lot of physical gold (alas not bitcoin). The debt spiral was in full force then. Truth is that it's going to be a long time before the collapse .... I would guess at least 10 more years. The biggest problem is that 99% of the population have no idea that the problem even exists.
Peter, please interview Tom Luongo, it would be fantastic
Interviews Richard Werner please
Thank you. I was the very first one to comment on this video suggesting exactly that, but somehow that comment got deleted. When Alfonso started to talk about Japan it became clear to me immediatelly he ain't got a clue what he's talking about in terms of how it used to work in Japan when it comes to money. Besides, Richard Werner is the one who coined the term "Quantitative Easing" anyways.
Vires in Numeris !
Surely if banks can buy government bonds with bank reserves then the reverses become real economic money through government sending? And therefore bank reserves can be inflationary?
That's what I thought as well, ultimately reserves are being created from thin air, those reserves are paying for SOMETHING
Another thing that confused me or maybe I didn't understand, he says bank reserves can't go into the real economy but then says that if there are major deposit outflows, the bank can get reserves injected by the central bank if required, therefore reserves are being withdrawn and can be spent?
again Alf is not telling the whole story. As Lyn has explained, when QE is done to fund the bond issuance of the gov to facilitate fiscal spending (deficits) then QE is real money printing. In 2020, QE was real money printing. The dealers would not have bought the bonds if they didn't know the FED would buy these bonds from them immediately.
The Pizzaman is smart
Using both GBT/BARD daily -
Macro Alf was the one who said no soft landing end of 2022? I can't keep the macro guys straight
Cash is central bank money!!!
Brillant
Hi 👋
Housing is a consumption, not an investment in general.
You are not him
alf good
Fiat guy talking fiat
Really 😂😂 Pete this guy in a Bitcoin podcast I would rather listen to Pete Rizzo and the root again Alf is a wash out bonds trader nothing he says has seen the light
What!? First comment again, 10 seconds in
Macro "12k Bitcoin" Alf 🤡🤡🤡
This guy always talks sophisticated, but all his calls have been wrong.
The fact that you said "all of his calls have been wrong" let's me know you're sensationalising and to dismiss your POV.
Good to see Alf here 🫶🙌