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Fed Watch - Bitcoin and Macro

May 5, 2021

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In this episode of Bitcoin Magazine’s “Fed Watch” podcast, hosts Christian Keroles and Ansel Lindner sit down with Dylan Leclair from Bitcoin Magazine. Dylan is the writer of, “The Conclusion of the Long-Term Debt Cycle and the Rise of Bitcoin,” an article on Bitcoin Magazine using Ray Dalio’s long-term debt cycle to look at the current system and how bitcoin fits in. Dylan is a great example of the growing Bitcoin Magazine community; spreading valuable content to beginners, who in turn become the valuable content producers.

After some introductions, Dylan begins by walking through short-term versus long-term debt cycles. Most people will be familiar with the idea of business cycles. These are periods of seven to ten years, where the economy expands and contracts, recovery and recession. Those are the short-term cycles. We all live through several of them in our lifetimes. 

However, the long-term debt cycles can be anywhere between 75 to 100 years in length. These cycles are due to each individual short-term cycle not completely clearing the bad debts and misallocations of capital out of the system. Every 75 to 100 years a larger bust finally resets the economy more deeply. It happens so infrequently, no one personally remembers the last cycle, so no one other than economic historians are around to warn everyone.