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In this episode of Bitcoin Magazine’s "Fed Watch" podcast, Christian Keroles and Ansel Lindner spoke with Michael Lebowitz, a portfolio manager for RIA Advisors.
This is a change of pace for "Fed Watch," reaching out to forward-thinking financial advisors to ask for their industry insight on the Federal Reserve, monetary matters and bitcoin. Lebowitz has made several appearances on "Real Vision" and numerous other macro podcasts, and notably appears weekly on RIA’s YouTube channel with business partner Lance Roberts. The latter source is where Lindner discovered his content, and he was impressed with the level of insight on monetary questions.
The conversation started off with asking Lebowitz about the general situation he sees out there in investing, but with a specific slant toward the elephant in the room of bitcoin. Lebowitz has in-depth knowledge of different asset classes and portfolio construction, which arose time and again in the 30-minute conversation.
Next, Lindner turned to some of Lebowitz's recent articles on the Treasury General Account (TGA) and the “pent up demand” narrative. The TGA in general is an under-discussed topic, so in this episode, the participants tried to dive a little further into some of the details. In short, the U.S. Treasury has until August to reduce the TGA balance by roughly $1 trillion. This could have two interesting effects. First, that is a lot of money that must be spent into the economy and could cause prices to rise. Second, the Treasury will need to issue far less new debt in the form of new U.S. treasuries (USTs). That could put pressure on money markets, especially as the Fed is continuing to take USTs off of the market with quantitative easing. Lebowitz gave his insight on this unique confluence of forces.
Lebowitz’s second article of interest was on pent-up demand hitting the market this summer as people expect most of the virus restrictions to begin coming to an end at that time. He walked through some of the nuanced issues in regards to monetary and fiscal policy possibilities. We are in uncharted waters here, and Lebowitz did a good job of making the pieces fit into a narrative, but at the same time preaching caution and diversification. He leans toward deflation, with a healthy respect for inflation as he advises clients on their investments.
Lastly, this episode dove pretty deeply into broad future predictions. Of course, this involves bitcoin as a headline topic. Can the Fed do anything? Is U.S. dollar hegemony in jeopardy? Is the entire fiat financial model in jeopardy? These are the types of questions discussed. Lebowitz is not a bitcoiner, but has done a fair bit of research into bitcoin, blockchains and tokens. He is representative of financial professionals everywhere who are being forced to take a look down the bitcoin rabbit hole. He has not fallen in yet, but he and many others are going that direction.