The Debt Tsunami with Caitlin Long - WBD743

Caitlin Long is the Founder and CEO of Custodia bank. In this
interview, we discuss the financial system's instability, the
impact of COVID-19, and the role of the Federal Reserve. We talk
about the different types of banks, the stability of the banking
system, the history of debt reduction by US presidents and the
role of interest rates. The podcast also covers the power of
federal bank regulators, the divide among Americans on various
social issues and the potential of Bitcoin.


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The COVID-19 pandemic has undeniably shaken the financial world.
The Federal Reserve played a crucial role in stabilizing the
banking system during this period. As with many other central
banks, the Fed printed large amounts of money. However, we are
still dealing with the serious consequences of the measures
taken: high inflation has been generated, long-term treasuries
have seen historic sell-offs, and there are concerns over the
impact on the US Dollar.


In this podcast with the Wall Street veteran Caitlin Long, we
discuss the banking system in the wake of the unprecedented
economic events that occurred as a result of the pandemic. We
cover the significance of the separation of banking and commerce,
and the differentiation between community banks, regional banks,
and global systemically important banks. Caitlin explains the
interplay between counterparty credit risk, bank runs and banking
insolvency.


We discuss the price of borrowing money, which Caitlin views as
being the most important price in the economy. It determines how
capital is allocated across time and industries. However, A good
price of capital is hard to determine, and this price is often
manipulated. Further, there has been a recent shift in focus from
making money to wealth preservation in light of the devastating
effects of inflation on people's lives, which materially affects
capital markets.


We also cover Caitlin’s firm Custodia Bank and their Bitcoin
custody platform. Despite concerns about the banking system,
Caitlin explains that she is building a bank because she believes
traditional finance and Bitcoin need to coexist. She discusses
the need for a bridge between the two systems to ensure they
don't harm each other, whilst marrying their respective
attributes: the strong customer protections that come from being
a bank with the best form of money.


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Show notes:
https://www.whatbitcoindid.com/podcast/the-debt-tsunami


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