Tom Bodrovics interviews Miles Harris, creator of the Macro Vigilance & Economic History YouTube channel, to discuss the increasing digitalization of the financial system, with a focus on stablecoins and their implications. Harris explains that stablecoins, particularly those backed by US short-term treasury bills, convert public debt into private revenue streams, with stablecoin providers earning the yield from these treasuries. This dynamic increases demand for US debt, helping to finance the growing US debt level. Harris also notes that regulated stablecoins do not offer yield to primary holders, incentivizing users to seek yields elsewhere, such as through tokenized treasuries, further boosting demand for US debt.
Miles also touches on the global shift towards digital currencies and the potential impacts on monetary sovereignty, particularly in countries like those in Africa and Latin America, where stablecoins could replace local currencies and reduce central banks’ control over monetary policy. Harris highlights the profit incentives for private companies to promote stablecoins aggressively and the potential risks, including a “stablecoin supernova” scenario where high demand for stablecoins leads to a global rush for the exit, threatening the stablecoin peg and causing a crisis. The conversation delves into the differences between various stablecoins, such as Tether (USDT) and the UK’s sterling stablecoin, and the role of tokenization in the financial system. Tokenization, the digital representation of assets, enables fractional ownership and interoperability but also introduces complexities and risks, such as increased surveillance and potential loss of sovereignty over monetary policy.
Harris also discusses the role of gold in the financial system, noting that central banks, particularly in the East, are increasingly buying gold as a settlement option and a means to de-dollarize. He suggests that the ultimate goal of central banks is to capture and tokenize gold, making it more traceable and controllable. Harris advises listeners to hold physical gold and silver as a means of preserving wealth and understanding the broader economic trends at play. The podcast concludes with a discussion on the psychological aspects of navigating the current economic landscape, with Harris emphasizing the importance of understanding risks, taking action, and enjoying the present moment.
Timestamps:
00:00:00 – Introduction
00:01:10 – Financial Digitalization Overview
00:04:05 – Increasing Treasury Demand
00:06:05 – De-dollarization vs Stablecoins
00:10:42 – Central Banks & Risk Factors
00:16:00 – UK Unified Ledger System
00:24:18 – Tokenization Examples
00:31:00 – East-West Gold Dynamics
00:39:04 – Resisting Asset Tokenization
00:43:55 – Gold’s Future Financial Role
00:48:40 – Physical Gold Solutions
00:51:15 – Fear vs Reality Perspective
00:55:00 – Concluding Thoughts
Guest Links:
Substack: https://milesharris.substack.com
YouTube: https://www.youtube.com/@milesharris5315
X: https://substack.com/@MilesHarrisLGA
Miles Harris is an accomplished economist and independent researcher with a BSc and Master’s degree in Economics. For over two decades, since 1999, he has dedicated his studies to dissecting major financial crises around the world, including the Russian default, the Asian financial crisis, Argentina’s economic turmoil, and the 2008 global financial collapse.
After flirting with a career in London he chose instead to focus upon real estate investing in the early 2000s. He has since become a passionate advocate of the Austrian school of economics and enjoy sharing this common sense approach to economics with high school economists where he teaches lessons on economic and financial literacy. In 2020, he launched a YouTube channel which provides global macro insights and champions the importance of sound money.
Through his Substack newsletter and active presence on X, Miles serves as a trusted source for historical and financial insights, emphasizing that history doesn’t repeat itself but often rebrands in new forms. His work decodes contemporary economic chaos by drawing parallels to past events, covering topics such as digital currencies, central bank digital currencies (CBDCs), multipolar global finance, and the algorithmic evolution of monetary systems. With a keen eye for patterns in financial history, Miles provides thoughtful analysis to help readers navigate today’s complex economic landscape.
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