Over the last few years - mostly as a results of increasing geopolitical turbulence - more people seem to be becoming aware of energy’s foundational role in our global systems. Yet, this critical understanding is still widely overlooked, especially among those working in finance. This is why I invited this week’s guest, Lyn Alden, whose biophysically rooted analysis of macroeconomic patterns reveals hidden insights into the macro risks of today’s global economy. In this episode, we discuss how energy and technology have shaped our monetary system and current financial trends and what that might mean for the coming decade.
Lyn Alden is an independent analyst and founder of Lyn Alden Investment Strategy with a background in engineering management. Her work provides institutional-level research in plain English, so that both institutional investors and retail investors can benefit from it. Lyn also serves as an independent director on the board of Swan.com and as a general partner at the venture capital firm Ego Death Capital. She is the author of the 2023 best-selling book Broken Money about the past, present, and future of money through the lens of technology. Lyn worked for over a decade as an electrical engineer at the Federal Aviation Administration’s William J. Hughes Technical Center.
How has increasing energy availability and productivity offset the inflationary nature of fiat currencies - and what happens if this trend were to slow or reverse? What assumptions and biases have led most analysts to mis-read long term trends, leaving us with vulnerable economies? Is it possible to rejigger our systems and innovate more biophysically aligned tools to enable a smoother transition into a future with a lower energy throughput?
In case you missed it…
Last week, I offered my perspective on the new all-time high in oil production in the context of AI’s growing influence in the financial markets and technology space. While ‘all liquids’ just hit an all time high, the varying categories of what is considered oil obfuscates a long plateau that is starting to decline. However, given AI’s expanding reach, it may not only invent ways of getting a higher percentage of Original Oil In Place to our economies, but also increase demand for energy worldwide. In similar fashion to shale fracking, MMT, and debt, AI will increasingly widen the resource extraction/ecosystem damage “straw”. Artificial intelligence is potentially a wonderful tool, but it is lower down the hierarchy than money/power maximization and thus will accelerate, not diminish climate change and other environmental damages.
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“People on average don’t change until they have to.”
So true—making lifestyle changes for individual early adopters almost impossible.
I've always wondered why more folks didn’t act differently against terrible oppressive movements throughout history (like fascism in Germany circa 1940s, or Jim Crow in US), where the oppression was literally at their doorstep, but now I get it, people can’t act alone, only as groups (families, tribes, neighbors, etc.). And, this group dynamic puts downward pressure on even the most logical or reasonable actions.
I understand your bullish perspective on Blockchain in the near term, but I must say that, even on a timescale of 20 years or so, I think you will impressed by how quickly this "distributed" technology will concentrate into fewer and fewer hands. It's already happening with the concentration of bitcoin mining operations. Personally, I won't play the first player advantage game with Bitcoin--it just doesn't feel ethical.