The Debt Tsunami with Caitlin Long

“We will hit an insolvency in the US at some point…we’re nowhere near as the naysayers think we are, now that said, it could happen tomorrow because the financial system is that unstable.”— Caitlin LongCaitlin 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. - - - - 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.- - - - This episode’s sponsors:Iris Energy - Bitcoin Mining. Done Sustainably Bitcasino - The Future of Gaming is hereLedger - State of the art Bitcoin hardware walletWasabi Wallet - Privacy by defaultUnchained - Secure your bitcoin with confidenceOrange Pill App - Stack friends who stack satsSwan Bitcoin - Invest in Bitcoin with Swan-----WBD743 - Show Notes-----If you enjoy The What Bitcoin Did Podcast you can help support the show by doing the following:Become a Patron and get access to shows early or help contributeMake a tip:Bitcoin: 3FiC6w7eb3dkcaNHMAnj39ANTAkv8Ufi2SQR Codes: BitcoinIf you do send a tip then please email me so that I can say thank youSubscribe on iTunes | Spotify | Stitcher | SoundCloud | YouTube | Deezer | TuneIn | RSS FeedLeave a review on iTunesShare the show and episodes with your friends and familySubscribe to the newsletter on my websiteFollow me on Twitter Personal | Twitter Podcast | Instagram | Medium | YouTubeIf you are interested in sponsoring the show, you can read more about that here or please feel free to drop me an email to discuss options.