Episode #434: Lyn Alden – The Macro Landscape & Bull Case for Real Assets

Episode #434: Lyn Alden – The Macro Landscape & Bull Case for Real Assets


Guest: Lyn Alden is the founder of Lyn Alden Investment Strategy, an investment research firm.

Date Recorded: 7/27/2022     |     Run-Time: 1:01:44

Summary: In today’s episode, Lyn gives an overview of how she sees the world today, starting with why the US today reminds her of the 1940’s. She touches on the state of inflation and US monetary policy and what her expectations are for the dollar from here. She shares why she’s bullish on value stocks and real assets, and why she’s closely watching European energy prices going forward.

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Links from the Episode:

  • 0:38 – Intro
  • 1:15 – Welcome to our guest, Lyn Alden
  • 1:54 – Having a background in aviation engineering and shifting into finance
  • 5:56 – How the world today continues to look more like the 1940s; Lyn’s June letter
  • 11:38 – Explaining the concept of financial repression
  • 17:09 – Free resources for historical data to play around with (Research Affiliates, Barclays, Professor Shiller, Professors French & Fama, Professor Damodaran)
  • 18:05 – Choices for governments to manage the state of markets (link)
  • 22:02 – How do bonds fit within portfolios given the inflationary environment?
  • 25:23 – Lyn’s take on inflation
  • 30:33 – Thinking about commodities and the real asset space
  • 33:39 – Lyn’s take on why gold hasn’t performed better
  • 40:44 – The stay rich portfolio (link);
  • 41:31 – The Price of Time by Edward Chancellor; Whether we’re seeing parallels between the US today and the UK back in the 40s
  • 45:00 – Lyn’s thoughts on the dollar and currencies in general lately
  • 51:36 – Why Lyn is bullish on Bitcoin
  • 58:48 – Learn more about Lyn; lynalden.com; Twitter @lynaldencontact



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Meb: Welcome, my friends. We got an awesome show for you today. Our guest is Lyn Alden, Founder of Lyn Alden Investment Strategy, one of my favorite macro-thinkers out there. On today’s show, she gives an overview of how she sees the world today, starting with why the U.S. reminds her not so much of the 1970s but more the 1940s. She touches on the state of inflation in U.S. monetary policy, what our expectations are for the dollar from here. She shares why she’s bullish on value stocks and real assets and why she’s closely watching European energy prices going forward. Please enjoy this episode with Lyn Alden.

Meb: Lyn, welcome to the show.

Lyn: Thanks for having me.

Meb: I am so excited to have you here today. I’ve been wanting to talk to you forever. I love listening to you. But for the podcast listeners out there, where do we find you today?

Lyn: I’m over in New Jersey. And I’ve been following your work for a while too. Actually, I think I cited some of your stuff as far back as probably, like, five years ago in some of my articles. I know you put out some good data. So, I’m always a fan of that kind of thing.

Meb: The really interesting stuff goes back even farther. You’ll have to find it in the archives. I’ve tried to delete most of the stuff where I look bad. But the insightful stuff that’s held up over time, survivorship bias is actually is pretty hard to avoid that in this day and age.

All right. So, there’s a lot that I want to talk about today. Again, I mentioned I love listening to you. So, I figure we’ll just do some jumping-off points. You’re a fellow. We actually have a lot in common. Before we get started, you’re a former aerospace gal, is that right, or aviation? You were an engineer?

Lyn: Yeah, so my background is electrical engineering, but it was in the aviation industry for the most part for about a decade. So, that’s kind of my…I kind of started out doing design work and then shifted more towards management and finance of the engineering facility.

Meb: Yeah, electrical, that’s the hard one. I come from a family of engineers, and we come from an aerospace background. So, that’s definitely had a soft spot in my heart. Listeners know this, but I joke that I was an aerospace engineer for about one semester, maybe two. And I sat in on statics and dynamics. And I was like, “This has nothing to do with being an astronaut. This seems really hard, and a lot of math.” But one of the courses, the history of aerospace, was taught by a former astronaut, which was pretty awesome. So, it’s still a soft spot in my heart. We did a whole series on start-up investing, angel investing in the space sector. We need to do a few more of those.

How did you start to kind make this shift to this investment world? There’s a lot of people I talk to that ping me a lot actually that are always curious. They’re like, “Oh, you know, hey, I’m doing X, Y, Z, and I’m thinking about shifting to kind of, you know, what’s going on in your world.” Was it a curiosity first or a hobby for you? Kind of where did that bug start?

Lyn: Yeah, what you just said. Basically, it was always a curiosity. For me, actually, investing preceded engineering. So, I was, you know, investing since I was in high school. That’s when I was buying my first equities.

Meb: Well, what were they, by the way, to interrupt you? Do you remember?

Lyn: The first one was Adobe.

Meb: Oh, wow.

Lyn: Yeah. And actually, it’s done really, really well. But I made money on it, sold it. It’s a classic, you know, instead of just letting it do its thing, I eventually sold it for a profit, and then got in years later at a higher price, kind of classic. So yeah, I was kind of into value investing. Like, I was reading Buffett, things like that, back when I was in high school. But when it came time to go to university, you know, my other big interest was math, science, engineering, PN. So, that’s what I wanted to pursue professionally. But, like, that interest never went away. So, I started, you know…I kept writing about it and learning about it along the way. And it was, like, in 2016 when I decided to, you know, start shifting towards that direction. And so, it started out as kind of a hobby. And then, eventually, it became, like, a full-time thing. So, for me, it’s just always been an interest in both. And sometimes, you make a career out of one and then, make a career out of the other.

Meb: And so, do you still keep a toe in the aviation world, or is it full-time macro all the time for you?

Lyn: For me, it’s full-time macro, but I try to use the aspects of technical background that I have. I think one thing I do compared to a lot of analysts is a lot of my focus is on real-world stuff. I think a lot of times, finance can get kind of lost in the weeds and disconnected from the real world whereas I think my engineering background…I think I know how hard everything is. And like you just pointed out, I mean, engineering is, like, super hard. And the real world is always harder than just, like, the pieces of paper we trade around representing the real world. And I think if you realize that and you kind of go down the rabbit hole of, like, you know, energy or some of these other areas that can be very problematic, I think having some sort of engineering background can be helpful.

Meb: Yeah. You brought back a fond memory when my father passed years ago. But we were kind of going through his stuff and found an old postcard. For listeners, a postcard is, like, an email. You get an actual physical piece of paper in the mail. But I had written to my father. But we used to talk about investing and that sort of thing. But it had talked about investing in, I think, Disney and Coca-Cola and maybe one more. And I think if I had just taken my own advice, bought those stocks, and just never been involved in finance ever again, I think I probably would’ve generated more alpha and be a lot wealthier and just held them for four decades or whatever it is. But okay, so, in this short time that you’ve kind of made this switch, you know, you have sort of a command of history that, you know, is pretty rare in our world.

And I’m surprised that…so, what’s local to you? Princeton, Harvard, Bridgewater hasn’t scooped you up at this point, which is a blessing they haven’t because we get to read what you’re writing. But there is, I figure, a good jumping-off part, besides just asking you what’s going on in the world, was a piece you’ve written recently. And I believe it was a couple months ago, maybe in June. But you were talking about kind of the way the world looks today reminds you a little bit of an analogue of some prior times. But it’s not the one the media traditionally talks about being the 1970s as much. You want to kind of walk us through that piece, taking us back to the 1940s and kind of the way the world looks today?

Lyn: Yeah. That theme has been something I’ve been emphasizing for actually a couple of years now. And it keeps being, unfortunately, more true, right? So, it’s almost like the further we go into this decade, the more it ends up looking like the ’40s. But that was originally inspired by Ray Dalio’s research, the idea of the long-term debt cycle. That’s something I came across many years ago. And it answered a lot of the questions I had, which is, you know, if you just keep building up a debt in the system, what happens eventually? What is kind of the…you know, trees can’t grow to the sky. So, if you get to hundreds and hundreds of percent of debt-to-GDP, public and private, what eventually happens? Where does that go?

And so, Ray Dalio’s long-term debt cycle kind of answered that question in my view. And I then wanted to, you know, validate it, recreate it. And so, I went and looked up kind of the raw data. It actually kind of started…like, he had these great charts. And then, like, six months later or a year later, I want to reference the chart again. But I wish it was, like, updated. And so, I was like, “Well, I could just make a chart like this. And while I’m at it, I can make 15 charts pointing at kind of different directions of this, or examining it from other avenues.” So, I went out, got the raw data as best I could from a bunch of different sources. It’s actually kind of tricky when you go back far enough to find really good data. It’s always kind of a challenging thing, especially if you want to, like I said, look at it from so many different angles. You know, you can find some data, but then you’re like, “Well, I want this data too.”

I reconstructed a lot of that to just look at, you know, what happened last time, say, developed market economies had this much debt-to-GDP and why did it happen like that, and what are kind of the bottlenecks that kind of forced things to turn out the way they are? And what I essentially found was that, in many ways, the 2010s… really the aftermath of the global financial crisis looked a lot like the 1930s, which was the aftermath of the 1929 crash. Basically, what those had in common was that they were popping of major private debt bubbles. And in the aftermath of that, you have some that you’re deleveraging. You have interest rates go to zero, and you have just kind of growing discontent populism, basically, not the most pleasant of times. Obviously, the 2010s were a lot better than the 1930s. We had better technology and no Dust Bowl and finance was a little bit smoother.

But there was a period of stagnation. I’ve seen some analysts call it a silent depression in some ways. Basically, both in emerging markets…especially in emerging markets, you know, you have 15 years of, like, the emerging market index going nowhere. You look at developed markets, it felt better. But at the same time, we just had, you know, below-trend growth and like I said, a rising kind of economic discontent. And that kind of thing eventually leads to…the system’s so fragile that when it runs into an external shock or it creates its own external shock, you start to get massive fiscal expenditures. And that’s what we saw in the ’40s with the war. And that’s what we saw in the ’20s here with the COVID and the reaction to COVID because basically, you know, if we had a less-indebted, more resilient system and then we’re hit with something like that, the response could be smaller. But if you have that indebted of a system when you get hit with something like that, that disrupts cash flows and operation, you kind of necessitate these really crazy responses.

And so, generally speaking, what makes a long-term debt cycle different than a short-term debt cycle is that really, the only way out is kind of this period of financial depression and currency devaluation. And so, you get a period of high inflation, but low-interest rates. And so, that’s what the ’40s and the ’20s have so far had in common. And it was very different than the ’70s because the ’70s, you had high inflation but low debt and, therefore, pretty high interest rates. They could try to combat that whereas in the system we’re in now, it’s high inflation and low rates. And, you know, the ’70s are still instructive because, for example, what makes the ’70s interesting is that the U.S. oil production peaked in 1970. You know, after, like, 100 years of, like, going steadily upward, it structurally peaked for decades until all the way to, you know, the shale revolution. And so, you had a supply shock in addition to, you know, some of the increasing demand you saw. And so, I think that there’s still things we can learn from the ’70s. But as a whole, I generally find the ’40s more instructive.

And, you know, we hear a lot in the past couple years of how unprecedented something is. It’s just totally unprecedented. And in some ways, that’s true. But I do feel like if you look at the ’40s or look at the idea of the long-term debt cycle in prior kind of periods that are somewhat like this, you at least have a framework. You at least have kind of a vague, you know, direction, understanding of kind of what kind of things we were likely headed towards. And then, you can start focusing on the nuances of how are we different from them. Because, of course, if you look back long enough like that, there are tremendous differences as well. So, I’ll stop there. But essentially, that has been a huge thesis of mine that in many ways, we’re in this kind of fiscal dominance, more inflationary…it’s kind of like wartime finance, even without the war. And, of course, now, recently, you actually now have some degree of actual war as well.

Meb: Yeah. I love the analogue instructive sort of analogies in history because there’s times, like you mentioned…they’re never exactly perfect, but they rhyme. And sometimes, it’s a little different for X, Y, Z, reason. But at least it gives you some framework or anchor from which to think about the world, you know. So often you hear in the media and commentators say things like, “I’ve never seen this before.” And then you’re like, “Well, you know.” And usually, it comes when some sort of expectation has been shattered, right. You know, someone thinks X, Y, Z couldn’t happen. And then, all of a sudden, it does. And so, maybe talk a little bit more about this concept of financial repression, which for listeners is, you know, interest rates being below inflation and what sort of effects that have.

Lyn: Yeah, so I think, you know, to describe the long-term debt cycle, we can start with the short-term business cycle, the normal credit cycle, which is basically you have an economic expansion, you get rising debt-to-GDP, and then, either the Fed kills it, or it runs its course, or some external shock happens. Something eventually causes some sort of rollover period of economic contraction. You get deleveraging of some of the malinvestment or over…you know, kind of entities that got over their skis. And the issue is that because of how the system is constructed, you know, policymakers come in and try to short-circuit that process and make it smoother and shorter than it otherwise might be. And so, they cut interest rates. They basically try to re-emphasize credit growth during that credit contraction.

And as a result, when you string a bunch of these together, instead of having, like, a sinewave of debt-to-GDP, you get, like, an upward sinewave where you keep getting higher debt relative to GDP. So higher highs and higher lows. And interest rates are going in the opposite direction. You keep getting lower lows and lower highs. Each cycle, you’re squeezing more juice out of the orange for how much credit growth you can get. And eventually, you run into the zero bound or in some cases, mildly negative. And then it becomes, you know, pretty challenging because instead of higher debts being offset by lower interest rates, so lower servicing cost on the debt, now there’s not really that lever anymore. And so, you know, both times in history when you ran into this zero bound for the first time after, like, you know, either forever or decades, you know, it was 1929 and it was, like, 2008, right. So, these were major events in financial history because you got to the end of kind of, you know, this long period of credit growth.

And so, what makes the ensuing process different is that there’s so much debt in the system that they can’t really deleverage nominally because, like, there’s just so many claims for dollars compared to how many dollars there are that it’s just like a game of musical chairs with, like, 20 kids but then, like, 5 chairs. It’s just a disaster when it happens because they’ve built it up to such kind of artificial heights. And so, generally, what you get instead is you’ll get some deleveraging. But then, you’ll also get currency devaluation where if the numerator is super high, one thing they can do is tweak the denominator, basically, create more money units, add more chairs to that game of musical chairs.

So, if 20 kids try to sit down on 5 chairs, you can be like, “Well, let’s put, you know, another 10 chairs there so only 5 kids don’t sit down, right.” And so, that’s essentially what they do. They end up creating a lot of money. And then, the problem is you get a lot of inflation. And, you know, so if you go back to the ’40s, for example, when they were fighting the war, you know, they got over 100% debt-to-GDP. And you gave up independence to the Central Bank. They said, “Look, you can’t just jack interest rates up to positive levels. We need you to finance U.S. debt to win this war.” And so, you had large physical expenditures, large inflation that followed it, and then, the Central Bank was holding rates near zero and even capping the long end of the Treasury curve for years to finance all that government debt at negative real rates, deeply negative real rates, which is basically a type of kind of gradual default.

And, you know, there’s a study by Hersh McCapla I believe it was that showed that, you know, over the past 200 years, 98% of countries, if they get their sovereign debt to 130% of the GDP, over the next 15 years you’re going to default one way or another. If those debts are denominated in a currency you can’t print, like, if you’re in an emerging market that owes dollars or if you owed it in gold, you know, if we go back long enough in history, you end up just kind of defaulting or restructuring in some way. And if it’s denominated in your own currency, instead, you generally get that financial repression environment where, of course, you know, they get paid back every dollar or Euro or whatever that they’re owed. But those are generally worth a lot less. By the end of that period, they’ll buy you less energy, less house, less stocks, less gold, however you want to phrase it. And so, that’s, I think, what we find ourselves in now that’s very similar to that period in the ’40s.

And it really applies for pretty much the entire developed world. It’s not just the United States. It’s also Europe, it’s Japan. It’s a number of other countries where we all kind of collectively have so much debt in the system that there’s no way, you know…both public and private debts just kind of as this long period of credit growth that, you know, now they can’t really get rates below zero anymore. And now, there’s inflation, and now we have kind of real-world supply constraints, large fiscal expenditures, a big increase in the money supply as you get this period where, you know, the Fed is raising rates, but they’re raising them…you know, even though they’re raising them kind of quickly now, they’re raising them from such a low, a below point compared to inflation, and they’re already getting signals of, like, yield curve inversion and, you know, kind of sign to the market that they might not go as far as they claim they will during a period of 9% inflation. And I think that’s what we get when there is this much debt in the system.

Meb: Yeah. I think we’re actually chatting on a Fed Day here the end of July. Listeners, if you want to play around, if you’re a super data geek like I am with some of the historical numbers, there’s a lot of free resources. We’ll put a link in the post on some data resources. But one, in particular, certainly is Schiller’s…if you go to Professor’s website, he has a CAPE Excel sheet, but it also has interest rates, inflation, all sorts of other stuff. You can look back, all the way back to the 1800s. But the example that Lyn’s talking about in the 1940s, it was interesting because the long kind of interest rate or interest rates were capped around…it’s somewhere in the twos, 2.5%, as inflation many times went well above into the teens.

’70s, similar, you had inflation spark into the teens. But interest rates were much higher in both cases. You wrote another piece talking about chess and checkmate and talking about kind of what some of the options for these governments are around the world. Do you want to kind of walk us through some of the thinking there? Is it necessarily a bad thing to kind of deflate this way where we just say, “You know what? We’ve got to suck it up. Inflation’s going to be high. But this is how we get things back to normal,” or, like, what are the choices for some of these countries around the world? And do they have a limited opportunity set of what to do?

Lyn: So, generally, when a Central Bank runs into a problem where debt is that high, especially government debt, but really the whole, you know, the public and private sector combined, super high debt levels, you know…in the aftermath of a private debt bubble, it’s usually not an inflationary problem because you’ve just got to reduction in demand. So, you have over-capacity for a lot of things. But after you spend, like, a decade working through that and not really investing in commodities and not investing in new facilities, eventually you kind of find yourself more supply-constrained.

And so, when you have high debt levels and then you run into, like, a commodity bull market, right, so you’ve underinvested in energy, you’ve underinvested in transportation, refining capacity, underinvested in certain mines, many of which take years to bring online, and you start to get that inflation from that, but you also have super high debt levels, that ends up being kind of checkmate for a Central Bank where they have high inflation, but they still can’t raise rates to positive real levels. And so, historically, one of the options that they can turn to is yield curve control where they say, “Look, we’re going to hold short-term rates, you know, at, like, zero. And we’re going to keep buying government bonds with printed money to suppress their rates as well.” Basically, a limited bid for, you know, government bonds above a certain yield, meaning below a certain price, to maintain that.

And so, for example, the United States did that in the 1940s. And right now, we have Japan doing that. So, you know, short-end rates are super low. And then, even their long-duration rates, they’re pegging them at, you know, 0.25% for the 10-year while their official inflation target is 2%. They pretty much have, you know, an implicit stated goal for negative-real rates kind of across their duration spectrum. And that’s kind of a reality when you have 250% debt-to-GDP and then, plus all the private debt in the market.

We also see Europe encountering similar problems where, you know, you have Italy with 150% debt-to-GDP, can’t print their own currency. And so, they’re relying on the ECB to maintain their bond yields, you know, at reasonable levels so you don’t get sort of a fiscal spiral. So, the question is what happens when you get high inflation but still, people don’t want Italian bonds and you end up having QE into an inflationary spike, basically suppress yields, you know, below the inflation rate, make them comparable to owning U.S. treasuries, whereas if you ask, you know…99 out of 100 investors would say they’d rather own U.S. debt than Italian debt, given similar yields. Maybe even 100 out of 100. And yet, you know, you kind of have to just manipulate things.

And so, generally, what you get in that environment is financial repression, meaning that if you’re a saver or you’re a bondholder, you kind of get screwed over. And if you’re a real asset owner, and if you have, say, debts that are, you know, manageable like a long-term mortgage or something like that, you’re generally a beneficiary. And so, there are multiple winners and losers in that type of environment. But it’s at least something to be aware of because almost nobody with a printing press will ever, you know, fail due to lack of money, right? So, it’s kind of like follow the money. Follow the incentives for how it’s going to go.

And yeah, historically, when you get super high debt levels, it’s like, you know, those become unplayable. And then, the question just becomes are they going to be paid in nominal terms, like, yeah, yeah. Like, what happens in emerging markets sometimes, or are they going to just be not fully payable in real terms? And in developed markets, that’s generally what you get. That’s kind of checkmate for Central Bank policy until such time as you inflate enough debt away or you’ve had some sort of reset that allows, like, another cycle to begin from there.

Meb: Yeah. You know, I think the challenge for many investors is this sort of distinction between trying to think in nominal and real terms and that’s kind of hard. I think it makes a lot of people’s brain hurt. Most people, I think, just think in nominal terms across the board. But, obviously, listeners, if you have a 10% stock returns for a decade per year, you know, if you have 2% inflation, that’s a lot different than if you have 8% inflation, right? That’s the difference between 2% and 8% real returns you can eat. So, let’s kind of think about investors. You know, clearly, in a financial repression, real…negative real rate world…and we’re seeing this in 2022. A lot of people are waking up to this. Bonds may not be the best place to be. I think in the ’40s and ’70s both it was a tough environment. So, do we just hang out in stocks? Is that the choice? Like, what should we be thinking about if those analogues are kind of, you know, a useful guide to where we are today?

Lyn: So, in many inflationary environments, and especially in financial repression environments, generally, real assets, harder assets, are the place to be. And so, historically, you’ll generally get weaker performance in paper assets, as well as, say, highly-valued growth assets. And you’ll generally get better performance out of value-type of assets, yield-generating assets, and, you know, hard assets, especially if they’re, you know, kind of long-term leveraged, right? So, if there’s, you know, houses with 30-year mortgages attached, or if there’s high-quality companies with pricing power, that have, like, you know, 20-year-old bonds that they borrowed, those different types of arbitrage, those are generally the types to be. And so, if you look at the ’40s, for example, you know, gold was pegged and illegal. So, that wasn’t really a good data set for American investors.

But commodities did well, real estate did very well. Equities were kind of mixed because, you know, you had World War II going on. So, a lot of uncertainty. But overall, that was a good time for investors to get in. And, you know, it just took time for that to be realized where something like real estate was more sudden in such an inflationary and financially-repressed type of environment.

And, you know, my expectation, generally, is to see a similar theme here in the 2020s, which is, you know, I think a lot of companies are reasonably valued compared to what you can get out of, you know, savings and bonds, if you’re willing to look through, you know, what can be pretty extreme volatility and if you diversify. So, I generally like the more value or dividend type of companies in this environment. To the extent that I would go in growth, I’d be very selective with what I’m looking at. Something that, you know, is…you know, already got killed. You know, because we’ve seen a lot of carnage in growth. I think there’s probably some babies thrown out with the bathwater there. But yeah, generally speaking, you want to be more commodity-focused, value-focused.

And I think the biggest challenge right now is what to do with global investing. That’s always a big challenge just because there’s so much kind of geopolitical turmoil around there. I think probably, eventually, in this decade, we’ll get a turn where you start to see more international equity outperformance. But that isn’t really something I’ve been early on. That’s been something I’ve kind of been expecting. We’ve got a number of false starts on that. So, that’s something I’m still kind of monitoring to see to what extent that might unfold.

Meb: Yeah. The foreign is sort of like waiting on Godot or emerging markets, like, just happily continue to dollar cost average in and, you know, for the younger crowd…you know, again, kind of going back to the old deleveraging and government policy, there’s always winners and losers. You know, in the younger crowd, I remember you’re kind of cheering but it’s hard. It’s uncomfortable. But you’re cheering for markets to get really cheap if you want to invest in them. And the older crowd, you’re certainly not because you don’t have as much runway unless you’re investing for future generations. But, I mean, some of these emerging market indices are darn near yielding 6%, 7%, 8% on some of these funds and offerings.

One of the things that, again, going back to digging around in history was if you look at these environments…and this has been my least popular discussion topic at the beginning of the year and last year. It’s a little less caustic now, but, you know, I was talking about just broad market valuations and opportunity set. And if you look at the ’70s, and if you look at the 1940s, in both decades you had an opportunity to buy stocks at single-digit PE ratios. I’m talking about the 10-year PE. I mean, just think about that. My God, you know. And despite us being down whatever we are, 15-ish percent this year or 20%, and some things are much, much worse, the growth names, but this sort of long-term PE ratio is really down to around 30-ish.

And this was actually an energy analogy made. So, you can use this to pivot to energy if you want. But I think it’s useful if we’re thinking about it too with inflation is…I’m trying to remember how you phrased it. It’s time under the curve. So, you can talk about this with energy, but I think the same applies with inflation too. Like, could we just spike up the 9% inflation and come back down, that’s one thing. You know, if we spike up, and then hang around 6% for a decade, that’s different than spiking up to nine and back down to three. One of the things that you’ve mentioned was that in the ’40s and ’70s value stock certainly had a big run. And we’ve talked about that ad nauseam too. But feel free to take this sort of topic any way you want, under the curb. You can take at energy, you could talk about value, you can talk about inflation. Your pick.

Lyn: One of my themes kind of this decade is that I think inflation, on average, is here to stay for quite a while. But I have also been reiterating that it’s not going to be a straight line most likely. I mean, the ’40s and ’70s, you didn’t have inflation in a straight line. You had disinflationary periods within inflationary decades. And I wouldn’t be surprised to see the same thing here, you know, in the 2020s. You can get an inflationary spike, and then, you can kind of come back down if you start to suppress demand or you fix some of the supply side issues. But until you actually resolve more completely the underlying problem, I think that it’s like holding a beach ball underwater. As soon as you let it go, it’s bound to want to come back up. That’s kind of the…you know, back in the prior decade, it’s, like, markets had a tendency to want to dis-inflate because you had overcapacity, oversupply for oil, things like that. And I think we’re in the opposite environment now where the tendency is to want to inflate because we have underinvested in a lot of real assets.

And so, even though we might suppress that for periods of time, I think that the longer-term trend is still, you know, probably higher commodity and higher inflation on average than we had the past decade. And so, I had that article about the area under the curve. It was actually a friend of mine in markets that made that quote. So, I decided to turn that into a piece. And essentially, it’s the idea that, you know, everyone’s looking at the price of oil, for example. And they’re saying, “Is it going to go to 150, or is it going fall down to…you know, is it going to go back down?” And my point was that if you’re a long-term investor, it’s not really about what oil does in the next few months, whether it’s 150 or not or it goes back down to, like, 80 is irrelevant. And instead, it’s about, you know, what is the average price going to be, I think, over the next 5 to 10 years.

And so, my general theme is that even at current levels, even when oil’s, like, you know, 90, 100, 120, or if it goes up from there, that is just an ongoing cost for households and for businesses. And eventually, we get more and more realignment toward those things. And so, for example, energy pipelines, oil producers, companies like that, even at current price levels and current volume levels with current valuations, they’re actually pretty attractive if you look at them out from kind of a longer-term perspective.

And so, the challenge with investing in commodities is always that, you know, in the very long-term, they’re not a great asset class compared to what else you get. They’re not these, like, long-term compounders. Disinflation happens more often than inflation. So, there are more decades than not where commodities are great investments. And then, even in inflationary decades, you can have some pretty violent volatility among them, even as they outperform. And so, I think that having commodities and value-oriented things long-term, this decade is probably going to be very helpful, as it already has been. But I think you just have to be prepared for those huge shocks that came come along the way, those downward moves in what is otherwise, like, an inflationary structure.

Meb: So, kind of thinking about commodities, which is something that I feel like the better part of the investing landscape hasn’t thought about in a decade really at all but is very front-of-mind now. I mean, the headlines every day out of Europe, natural gas, everything, it’s like…and, obviously, the moves and everything. Base metals, energy, precious. And you talk about energy and investing in energy kind of ideas. Do you think this is an opportunity too? You know, most investors are woefully under-allocated to that entire real asset space. So, how do you think about it? Is it interesting, not-so-interesting?

Lyn: I think it’s very interesting. And I agree with your point that basically, people are very invested in disinflationary assets. So, the 60/40 portfolio as we know it is a pretty…you know, it really benefits from disinflation. Generally, it’s…in the 60-stock side, you’re more in growth stocks than value stocks. And growth stocks tend to want a disinflationary environment. And then, you have the 40, which is in, you know, paper assets. It’s in, you know, again, things that benefit from disinflation. And so, what really disrupts? And we’ve had, you know, 40 years of a downward trend in interest rates, a downward trend in inflation. And out of those four decades, I mean, three of them were just outright disinflationary, right? So, the ’80s, ’90s, and the 2010s were all these kind of disinflationary decades. We did have one inflationary decade of the 2000s. But we had so many globalization levers that we could kind of pull so that we didn’t really get the brunt of that inflation in the way that we did in kind of prior commodity bull markets like that.

And so, I do think that, you know, in this period investors are kind of…they have a lot of recency bias built around these kind of compounding things that benefit from disinflation. And I do think that it is good to have some inflationary slices in a portfolio to kind of offset some of those disinflationary assets. It doesn’t mean someone has to be 100% in them. But I do think that…you know, just like we saw this year. You know, stocks and bonds went down together while energy went up. And that was an example of where, you know, it’s almost like energy became the thing you want to own that offsets your other stuff instead of stocks and bonds offsetting each other. That tends to be a theme in inflationary types of decades where stocks and bonds are more correlated than we might otherwise like.

And instead, it’s commodities and real assets that tend to be the diversifier. So, if you have a period of inflation, you’ll generally have your stocks and bonds probably not doing great while those commodities are doing quite well. And then, if you get a disinflationary pullback within that decade, you could have a period where your commodities and real assets are doing pretty poorly, and your stocks and bonds are bouncing back. And so, I do think that in a diversified portfolio, having at least a slice towards those real assets or commodity assets or those types of inflationary assets I think is super useful. And I think that that will probably end up being the difference between underperformance and outperformance this decade is whether or not a diversified portfolio has that slice in it or not.

Meb: You know, I think one of the challenges for many investors, and this just isn’t retail, this is institutional too, is they kind of put the real asset in a too-hard pile, you know. And they’re not sure where to actually allocate. Should they be doing futures, ETFs? Should they be doing companies? Should they be doing tips, REITs? You know, I think a big head-scratcher for many, and particularly within the community, is why haven’t gold and gold stocks done better, you know, in this environment. It seems like an environment ripe for those assets. Any general thoughts on kind of how to think about putting money to work in any of those places?

Lyn: It depends on the type of investor. There are some easy ETFs for people to go to. I know that there’s one called GUNR, for example, G-U-N-R. It’s, like, the morning star upstream natural resources, I believe it’s called. Basically, you’ll get a big slice of all the different producers from around the world. And it’s kind of divided into, like, energy, and then, like, you know, metals and then, like, agriculture. There’s also, like, the…I believe iShares global energy ETF. Again, you know, you’ll get, like, a more diversified, you know, multi-jurisdictional exposure to energy companies. I think those are maybe just a starting points that someone could consider.

And then, it depends on what type of investor they are. I think that, say, long-duration oil futures are pretty attractive. I think that basically playing the commodity directly can be quite useful. And I also think that the pipelines for energy are pretty interesting. You know, that whole industry was overleveraged years ago. And it’s been kind of bombed out twice now. First in the oil price crash years ago, and then during 2020. And I think the structure that’s remaining is now pretty attractive for kind of a yield-based asset. And so, I think that there are multiple ways to play it.

Meb: Okay. Do you have any opinion, and maybe you don’t, as far as precious gold, gold stocks? They haven’t done that well. Is it an opportunity? Do you think they look interesting? Is it something that you say, “There’s a reason this hasn’t done that well?” Obviously, the ’40s are tough because of, you know, not necessarily the freely-trading gold world of the post-’70s until now. How should investors think about it?

Lyn: So, I think that there’s opportunity right now. I mean, if you go back a couple years ago, we had a lot of monetary inflation that was happening. So, the broad money supply went up quite a bit. We saw a pretty broad rise across the board in asset prices. I mean, so, it was a very risk-on environment. And, you know, with gold investments, it became why own gold when you could just owe and all these, you know…if yields are low and inflation’s high and, you know, money’s pouring out, why not own stocks, for example?

And then, now, we’re in this kind of, like, you know, contractionary period, risk-off period. Gold has held up better than the broad stock market. But it’s really not done as much as I think people hoped. And I think that’s in large part because, you know, there’s a pretty significant quorum of the investment community that thinks the Fed will hike the positive real rates, that we’ll get inflation back under control. We have a very strong dollar at the moment. So, gold has actually done pretty decent if you look at it in say yen or Euro terms, and especially in a lot of emerging market currencies, but specifically in the dollar, which is unusually strong right now. It’s kind of been lackluster.

I think one way to look at it is, you know, there’s a firm out in Europe called Incremental. And they actually had a product that was, like, gold and Bitcoin mixed together so that investors could kind of benefit from that volatility harvesting, right, because if you…you know, generally Bitcoin does better in these rising PMI environments, you know, rising economic acceleration. I think gold generally does better in falling economic environments. And you have kind of almost like a fragmentation of what people want to use as, like, their hard money holding, right. So, you have a lot of people that might’ve otherwise bought gold buy Bitcoin. But then, you know, it’s a very volatile asset. So, in other times, some of them might go back to gold.

And generally, I think that that’s kind of the bucket I’m in where I think if you look at a basket of gold and Bitcoin together, it’s actually done pretty well, all things considered. And I think that that might be a reason why gold has underperformed, which is that there’s so many other assets you can own in that kind of financially repressed environment that gold is just one out of many. And what basically gold and Bitcoin have in common is that these are, you know, money that someone can sell custody, for example, that’s maybe outside of the traditional system. And so, it becomes kind of a competition between, you know, those types of assets.

Meb: Yeah. I think the setup is getting more and more interesting. I mean, historically, gold does particularly well during negative real T-bill yields and also flat or negative yield curve. And both were kind at and approaching. So, I’d be curious. But it’s interesting kind of to think about. We did a piece during the pandemic about how to think about what’s the safest portfolio, you know, for the past century, which is sort of a fun thought experiment because 99% of the people assume the answer is T-bills, right. And if you think of, “Okay, what does safe mean? Does it mean volatility, does it mean drawdown, and can you build something that’s more robust on a real return basis?” So not just nominal. T-bills obviously win the nominal because they don’t have drawdowns. But that’s starting to bucket in and think about gold. And then, now, this new world of crypto too as, you know, a pretty big portion of that clout or allocation is an interesting thought experiment. I’m not settled on it yet, but it’s fun to think about.

Lyn: I think one of the challenges with the T-bill, a historical thing, is that there’s some selection bias there, right, because, you know, the United States was the rising power over the past century, right. So, you know, we started…you know, we basically were an emerging market that became, like, the dominant developed market whereas if you run, you know, short-term government bonds in many other countries, you would have gone through an even worse period of inflation as, you know, the treasuries did, right. So, along with the Swiss franc, having U.S. government bonds has been one of the safest types of bonds.

And it basically gets even worse when you look at a global sense that it’s not necessarily as safe as many people think in real terms to kind of echo your point there. That is kind of the big challenge in this environment, that there’s no truly safe asset. I mean, you know, gold can be volatile, but it generally holds its purchasing power long-term. Short-term treasuries are less volatile, at least in nominal terms. But they had these decades where they can just do utterly terrible, especially when you look globally. And I think, you know, one catalyst when we’re looking for to see how gold responds to is when the Fed gets to a point where, you know, due to how much debt’s in the system and due to economic weakness, when they eventually kind of, you know, potentially stop tightening, even though inflation’s still kind of a persistent issue. And I think that when you kind of go into that next period like that, I think that’s where gold probably has its best shot to kind of renew its interest among investors.

Meb: Yeah. Listeners, the fun thought experiment, we’ll put this in the show note links, it was called the stay rich portfolio but basically, it’s the inclusion…and this wasn’t really particularly optimized. It was just kind of an example was that if you paired global market portfolio of global bonds, global stocks and some real assets with T-bills, you end up with a much lower volatility, lower drawdown, but with higher return or yield, depending on how you frame it. But that’s kind of common sense too. It’s like are you preparing for any market environment, disinflation, inflation, recession, contraction, growth, all the things kind of put together? It’s kind of like, you know, the Dummy’s Guide to Asset Allocation, you know, the ultimate diversification.

And it’d be interesting to see where crypto plays that role going forward. So, you know, you put out a lot of content. And you’re going to have to correct me if I’m wrong here because I’m also reading a book, a history book, that’s coming out soon called “The Price of Time”. And I can’t remember if you wrote this or if the author wrote it. So, let’s find out. Were you giving the analogy that, you know, in the 1940s… where we are today has some vibes with the U.K. in the 1940s? Was this a thought experiment you were talking about where, you know, they were kind of the…coming into, you know, this big power that’s on the decline and similar to us kind of today?

Lyn: So, when I was analyzing the whole going back to the 2020s to 1940s analogue, one thing I like to think about is okay, what’s different, though? So, I make all these comparisons to how they’re similar. And I can be like, “Okay, what’s different, other than obvious technology and things like that?” And one of the differences, I mean, look at back in U.S. history, in the 1940s, the United States was a rising power. And we were a structural trade surplus type of nation. So, you know, basically, you had…the U.K. was the prior leading power global reserve currency. They were running kind of structural trade deficits. And they weren’t really growing as fast anymore. And so, the United States was the up-and-comer whereas the U.K. was the incumbent. And the U.K. was also more impaired by the war, for obvious reasons.

And so, some of the things were more dramatic for them whereas I think the similar analogy today is that, you know, we’ve had the rise of China in some ways. And, you know, I don’t think it’s like they’re going to go and, like, replace anything any time soon. But it’s, like, the United States is in a position where much like the U.K., you know, in the runup to 1940s, the United States has this structural trade deficit issue. And we are the existing global reserve currency. And, you know, if you look at our…we have, like, you know, what? Like, 4% of the population but it’s, you know…at one point we had, like, 80% of global reserves were invested in dollar-based assets.

And so, one of my kind of observations or theses is we might’ve hit a high watermark for kind of U.S. dominance as a percentage of global GDP. I mean, that’s already been on a downtrend really for decades. But if you go back to, say, Ray Dalio’s work, when you look at kind of the rise and fall of very major empires or major global powers, you don’t have everything rise and fall together. Some things kind of operate on a lead, and some things operate on a lag. And so, for example, education is one of the leading ones where you generally have, you know, rising power starts to become very well-educated compared to a lot of their rivals whereas one of the lagging ones is reserve currency status where, you know, that kind of comes after it’s already hit a major economic power. You start to…then you have the currency catch up. And then, even when that power starts to wane, that currency has so much network effects and existing entrenchment that it takes a long time to kind of diffuse and kind of roll over in terms of its dominance on a global scale.

And so, that’s just one of the comparisons I made between the United States today and the U.K. back then. And, you know, U.K. obviously did quite well since the 1940s. It wasn’t, like, a disaster for the U.K. But you just kind of had that change in its role globally. And so, you know, as I look forward, I see a more decentralized world and, you know, a more bipolar or tripolar world most likely rather than kind of the unipolar world that we’ve been rather accustomed to since, you know, the end of the global war.

Meb: We haven’t spent too much time on the dollar yet. The dollar has been romping and stomping everything in sight, which is good. If you’re a skier who wants to check out some international destinations like I am, it can be bad or awful or wonderful, depending on if you’re an exporter, where you’re located, what’s going on. Do you think about currencies much? And how should we think about…so, what’s going on with the dollar and foreign currencies too?

Lyn: I analyze currencies quite a bit, especially the dollar because it’s such a big mover in terms of global macro, right. So, if, for example, you look at all the emerging market huge runs, you know, those were during dollar-weakening periods. They generally face quite a bit of pressure when the dollar is high or especially if it’s sharply rising. And that’s because, you know, the dollar is the global funding currency. And so, there is something like, you know…according to the Bank of International Settlements, there’s something like $13 or $14 trillion in U.S.-denominated debt that is outside of the United States. And it’s not even owed to the U.S. for the most part. It’s, like, a European entity will lend dollars to a South American entity, for example, or China will loan dollars to an African entity, either governments or corporations.

And so, what happens is if the dollar gets strong, especially quickly, like, your liabilities are getting harder, right. So, you have a company or a government, and your revenues are in your currency, or in some cases, many currencies if you’re kind of a multi-national exporter. But a lot of your liabilities are specifically in dollars. And so, if the dollar’s going up verse everything else, it’s, like, you know, imagine if you had a mortgage priced in gold and gold was, like, soaring relative to your house value or relative to your income, you know, you’re getting squeezed. And it especially hits, you know, any country that is kind of unprepared for that. So, if it has low reserves as a percentage of GDP, if it’s very reliant on foreign investors, those types of countries can run into a lot of issues whereas ones that have structural current account surpluses, that have high reserves, they’re more able to withstand that type of environment.

Then, it’s challenging because this comes back and hits the U.S. as well because if the whole world slows down due to its dollar liabilities hardening, that impacts the U.S. in a couple ways. One is that, you know, something like 40% of S&P 500 revenues are international. So, all those get translated back into fewer dollars and might even have lower sales growth just due to the sluggish growth in those regions. And number two, the foreign sector generally slows down its purchases of U.S. assets because the way that this whole thing is structured is the United States runs these, you know, pretty persistent trade deficits with the rest of the world. The rest of the world takes those dollars and it buys, you know…they recycle their dollar surpluses into U.S. assets, into U.S. capital markets.

And so, they buy treasuries, they buy U.S. real estate, they buy especially U.S. stocks in recent decades. And when they start to get squeezed, you know, if they need dollars, one thing that a lot of those creditor nations can do is sell or at least stop buying U.S. assets. And so, for multiple reasons, this kind of ricochets back into counter-intuitively hurting the United States as well. And so, just kind of how we’ve structured the global financial system, especially over the past, you know, 50 years or so, kind of creates this environment where if the dollar’s going up, almost nothing else is. And if the dollar’s going down, just about everything else can generally do pretty well. And so, kind of following some of the dollar dynamics I think is really important.

Meb: One of the nice things about you, Lyn, is you, I think, you know, are agnostic or open-minded. You know, I follow your writing, you know. And you guys have a paid research service too, and you talk about ideas and trades. And sometimes, the ideas can be pretty wide-ranging, you know. I thought I’d give you the opportunity to profile any that are on your interesting list today, including even ARC, which I saw at one point as well as some…you know, other dividend and cryptocurrency allocations. What looks interesting to you?

Lyn: So, it’s funny. You know, I’ve been more in the inflation camp, dollar bear camp, and not a huge fan of the ARC and Tesla type of assets. Over the past month, I became a little bit more sympathetic towards certain treasuries and ARC’s type of stocks, at least maybe with, like, a 6 to 12-month view just because of how oversold they were and that we could be seeing, you know, kind of a local top in a number of treasury rates that I think has put a lot of devaluation pressure on some of those growth-oriented companies. And so, I think those are a kind of an interesting thing to watch in terms of to see if their momentum does continue upward or not. But I think, you know, for me, the longer-term attractive areas for this decade are basically the energy sector, the value sector in general. So, a lot of good dividend payers.

I do like certain emerging markets. I just am careful about position sizing, especially for each individual market because, as we saw with, say, Russia, for example, you can get zeroed out of positions, even if the underlying companies are still chugging along. And so, I think having that kind of globally diversified value emphasis is something I’m kind of pretty bullish on for this decade. And generally, my favorite growth asset going forward is probably Bitcoin as, like, a slice in portfolio. I kind of maintain some degree of counter-cyclical exposure to it so if it’s skyrocketing, it might, you know, rebalance back into the rest of the assets. And if it just fell off a cliff, I might lean into it a little bit.

And because I think that while I’m not super thrilled about the broader crypto space, I think there’s kind of this regulatory arbitrage that just happened over the past decade. And I think that it’s…like, imagine an environment where you could just sell penny stocks to the public, right. I think that’s kind of the environment that has grown up around that crypto space, especially the worst parts of it. But I do think that what Bitcoin offers is kind of this really innovative technology. And then, I think that the network is probably going to continue to grow and strengthen.

And so, that’s something I monitor both for its own sake as an investment and to constantly ask myself, you know, “As this technology gets adopted and matures, if it does, what other industries does that affect, either positively or negatively?” So that’s kind of my overall framework looking forward when I think if I’m standing in 2030 and I think, okay, what performed well this decade,” those are generally the types of assets I’m looking at.

Meb: Yeah. I mean, you know, certainly, to me, part of my personality’s attracted. And I think the research is interesting there when we look at assets or industries or even styles that get down to that, like, 80% down, you know, or 60%, 80%, 90% down to me is…I’m, like, a fly. That just attracts me, but I think it’s an interesting place to kind of fish. But also, you know, the thing about Bitcoin that is becoming more interesting and synthetic to me too is that you’ve seen a lot over the past year of wreckage in the crypto space. There’s been a lot of fraud and just grifting and hucksters and everything else going on. And Bitcoin, to me, I think actually, you know, short-term it hurts, but long-term, benefits from that in that, you know, it ends up looking a lot shinier to me than everything else to the extent that world grows and blossoms, I think it becomes kind of the S&P of that space.

And I know you’ve mentioned it before, and we have too, I don’t have a position, but I think the GBTC close-end fund, which is trading at about a third discount right now, becomes more interesting if there ever is any more puke coming. If there’s not, so be it. But to me, closed-end funds have always been an ample place to look for opportunities when they trade at big, fat discounts and particularly during a crisis because that’s when the spreads can really blow out. You’ve got to be a little more active and, you know, have some limit orders in. But I know plenty of people over the past decade during some various kind of flashy or panic-crash type environments they’ve gotten filled way below the market in those sort of investments. So, that seems to be interesting to me too.

Lyn: Yeah, there were a lot of entities in the space that were using Bitcoin as collateral and then going out and, like, leveraged long on, like, altcoins, right. So, when that all blows up, a lot of those entities have to sell their Bitcoin. And that’s, obviously, been disastrous for the market. But if you’re kind of a counter-cyclical investor, if you had diversification, dry powder, it’s kind of an interesting place to…like you said, it’s a good place to fish.

And the general story with the Bitcoin over the past 13 years of existence is it generally goes up in rising PMI environments, so economic accelerating environments. It generally does pretty poorly in economic decelerating environments, lower liquidity environments. But the general trend is much higher highs and higher lows whereas if you look at most other crypto assets, the majority of them have trouble kind of gaining any sort of structural, multi-cycle momentum. These…they are these kind of, like, flash in the pants. You know, they’re popular for a cycle or two, and then we’re onto the next thing whereas Bitcoin’s kind of been the constant in that space. And I think that there’s pretty good technical reasons as to why. And if you look at, you know, even the…I’m a little bit involved in private investing in start-ups that are kind of in that space.

And you’ll see a pretty big divide between, say, multi-coin type of VCs and Bitcoin-only VCs. Obviously, there’s areas of overlap but they’re quite separate ecosystems. It’s almost, like, if you look at crypto, Bitcoiners are, like, the value investors or, like, the dividend investors of the space. You know, they’re kind of…it’s like two very different cultures whereas, like, the other ones would be, like, the ARC type of things. And so, it’s kind of gotten a big enough asset area where you have very, very different groups within that asset. And so that this is kind of just something I watch and something I’m pretty bullish on. But, of course, there are risks associated with it. So, it’s just about position-sizing.

Meb: Yeah. Position-sizing is a big one, you know, to investors. Back in the early days of, you know, crypto, I would always have people, mostly friends, you know, come talk to me and say, “What do you think about crypto, you know? Should I buy some? Should I not? Should I sell some? Should I sell it?” You know, and the framework is always in or out. And I would always tell people, I was like, “Look, you know, you can diversify this FOMO and regret. You’re going to have either way…you don’t have to go all in or out. Like, you don’t have to put 100% of your net worth in this or nothing. Like, you can just put some in.” And I said…it was part of the global market portfolio at the time.

And I think probably now, it’s still half percent or something maybe. Nobody wants to hear that, right? You know, under-position size, half a percent, no one…if they’ve got 100 grand, they won’t put in $500, right? They want to put in 80 or nothing. But to me, that’s the way to do it because if it does well, it’ll grow and be a bigger percent. If it doesn’t do well, it will be small. Lyn, as we start to wind down, you know, as we’re looking at the horizon, the year’s halfway over. It’s summertime still, but the fall will quickly be upon us, what else are you thinking about? Has anything got you confused, excited, worried? What’s on your brain?

Lyn: I’m watching the energy situation in Europe just because, you know, going back to the 1940s analogy, this is I think a pretty transformative decade for how things shake out. And they’re certain kind of bullying outcomes I think that could really go one way or the other. And so, as we go into the fall and winter, I think we have to keep an eye on what’s happening with Europe’s energy situation and, you know, their internal politics around their energy situation. And so, I think that that might be one of the biggest risks to look out for, or, you know, alternatively, if we have, like, a super mild winter and if there’s, like, some sort of de-escalation, you know, maybe the super bearish stuff goes away, and then, there’s an opportunity there. And so, I think that that’s kind of the core in the world for, like, really divergent outcome possibilities compared to a lot of other markets.

Meb: I’m trying to bring a little light to this situation. But you know what it reminds me of? I was thinking about this morning over coffee with the energy, with Europe and Russia because they’re totally dependent on each other, right. So, Europe needs the energy, Russia needs to sell it. So, it reminds me of a couple that lives together and then breaks up. But then, they, for whatever reason, are stuck living together for, like, another three months or six months. They’re like, “We’ve broken up. We’re definitely broken up. But we both don’t have any money. So, you can’t move out for three more months,” or something, right. So, they don’t like being together. They come home, they avoid each other. But they have really no alternative, you know. And that’s…how it resolves, you know. we’ll see, but to me, it feels like that.

And then maybe in globalization, that’s a good thing, you know, that people are so interconnected. They have to at least try to play nice, but who knows?

Lyn: I think that’s a good way to phrase it because, basically, long-term, Russia wants to reroute, you know, its sales towards the east. And long-term, Europe wants to diversify its energy input. But both of those things take time and capital and development. And so, it is a really challenging thing for both of them in the meantime. And so, like I said, that’s one of the areas that I’m just watching pretty closely in terms of how it can affect global markets and some of those markets specifically.

Meb: This has been a whirlwind. We’re definitely going to have to have you back to chat as the year progresses. If people want to follow, we’ll add some show note links. But where do they go to find out more about you, your writing, your thoughts, your ideas?

Lyn: So, I’m at lynalden.com. That’s where most of my work is. And I’m also active on Twitter @lynaldencontact.

Meb: Lyn, thanks so much for joining us today.

Lyn: Thank you.

Meb: Podcast listeners, we’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us feedback at themebfabershow.com. We love to read the reviews. Please review us on iTunes and subscribe to the show anywhere good podcasts are found. Thanks for listening, friends, and good investing.