Jan 14, 2021
With so many moving parts, it’s difficult to develop a clear
view of the US monetary system. Today we speak with Pragmatic
Capitalism author and Founder of Orcam Financial Group Cullen
Roche, leveraging his expertise to build a comprehensive
understanding of the monetary system. We open our interview with
Cullen by asking him the deceptively simple question, “what is
money?” We then explore where money comes from, the role of the
central bank in securing our money supply, and why poor
capitalization restrains banks. After discussing where the value of
money derives from, Cullen shares his insights on how decentralized
digital currencies are challenged by their lack of flexibility and
credit options. We talk more about the role of central banks before
diving into quantitative easing; what it is, why it’s used, and how
interest rates impact its usage. Following this, Cullen unpacks
whether quantitative easing leads to asset inflation along with the
influence that stimulus policies have on inflation. Reflecting on
the relationship between the Federal Reserve and US Treasury,
Cullen shows why the US government is in no danger of becoming
insolvent. We touch on the dollar’s purchasing power, Cullen’s view
that time really is money, the role of gold in your portfolio, and
why Cullen is such a big proponent of global investing. We wrap up
our informative discussion by asking Cullen how he defines success
in his life. Tune in to benefit from Cullen’s clever and concise
explanation of our modern economic system.
Key Points From This Episode:
- Introducing today’s episode featuring Cullen Roche.
- We open our interview with Cullen asking the question, “What is
- Exploring where money comes from and the role of banks in
ensuring money supply. [0:06:14]
- The factors that constrain a bank’s lending ability.
- Cullen unpacks where the value of money comes from.
- Economic constraints posed by decentralized digital currencies.
- What central banks are and why they’re such good ideas.
- Cullen explains what bank reserves are.
- How quantitative easing tries to stimulate the economy.
- Why quantitative easing isn’t the same as printing money.
- Cullen evaluates the success of quantitative easing as a policy
- Whether quantitative easing leads to asset inflation.
- The impact that stimulus policies have on inflation.
- The relationship between the US Federal Reserve and Treasury.
- Why the US government will most likely never go insolvent.
- Why low inflation trumps high inflation and how increasing
government debt might or might not harm future generations.
- Why the dollar’s purchasing power doesn’t reflect the reality
of our modern standards of living. [0:55:26]
- Hear about Cullen’s view that time really is money.
- How Cullen sees gold as a hedge against the dollar’s decreasing
purchasing power. [1:00:41]
- Cullen explains why he’s such a big proponent of global
- There’s more to life than money; Cullen defines success in his
own life. [1:06:48]