Whitney Baker - a macro economist who has worked in leadership roles at Soros Fund Management and Bridgewater Associates - hopped onto Joe Lonsdale’s podcast American Optimist to discuss the new macroeconomic winds that are blowing and what that may mean for the US as well as the rest of the world. Lonsdale is a co-founder of Palantir, the big data/AI company with deep ties to defense/intelligence industries, and which currently has a number of its employees embroiled in a heated kerfluffle with YC co-founder Paul Graham on Twitter. More on that later…

Baker covered a lot of ground in the discussion, from the end of the gold standard to the COVID response to how things are setting up today. Here are some of the highlights:

1. The End of the Gold Standard Unleashed a Global Credit Supercycle Since 1971, when the dollar was de-pegged from gold, the supply of money was no longer tethered to hard assets. This enabled unchecked debt accumulation globally, with asset prices rising far beyond their underlying cash flows, creating a fragile financial system highly sensitive to liquidity shocks.

2. Globalization and Tech Masked Inflation for Decades The entry of China and other emerging markets into global trade brought massive disinflationary pressure by lowering labor costs and expanding supply. This masked the inflationary consequences of Western monetary and fiscal expansion, allowing for long periods of low rates and rising asset prices.

3. The Post-GFC and COVID Eras Created Structural Asset Bubbles and Inflation Risk Governments delivered stimulus far exceeding the economic loss—e.g., giving $2.5 for every $1 of lost income—causing demand to surge well beyond supply and igniting persistent inflation. This wasn’t a supply shock; it was a demand explosion financed by printed money with limited global absorption capacity.

4. Diverging Debt Structures Between the U.S. and the Rest of the World Are Key The U.S. household and corporate sectors mostly hold fixed-rate debt, delaying the impact of rate hikes. In contrast, the rest of the world runs largely on floating-rate debt, making them far more sensitive to global interest rate increases. This divergence explains why global goods inflation temporarily fell even as U.S. demand stayed hot—it was a lagging, external disinflation, not internal cooling.

5. Current Regime is Inflationary and Requires Alpha, Not Beta The U.S. economy is still running hot (strong wage and job growth), inflation is set to re-accelerate as global demand returns, and foreign capital is saturated. Passive investing is risky at these valuations. Future gains will come from exploiting dislocations globally—it’s a market for selective, alpha-driven macro strategies.

Toward the end they touched on AI’s potential to help foster real growth as an antidote to the current economic headwinds. Baker basically said AI is great and has a lot of promise, but the key questions really are:

1. How long will it take for AI’s efficiency gains to be transmitted imto real productivity gains
2. Will productivity gains be distributed broadly or will they be concentrated within the oligopolies

This was honestly a really great discussion with someone who understands macro at a very deep level. I would highly recommend listening to it in its entirety.

Over the past month or so I’ve tried to start a regular writing habit. And I’ve discovered that its really hard. Not because writing is hard (even though it is), and not because I don’t want to do it (I do). I’ve struggled because there are actually infinite reasons to not write. What I mean by that is that every single thing that you could possibly do in any given moment is a reason not to write.

Oh I have to run to the grocery store… wait gotta figure out why my tire is leaking air… can’t deal with that creaky door hinge for one more minute… lets get a quick workout in… let me take care of that bit of work thats been hanging over my head…

These are reasons/excuses from only the last 48 hours. The inertia of life takes me from thing to the next thing most effortlessly. In my mind I’m not making excuses not to write. It just happens. I had no idea how to fix a door hinge but watching a few youtube videos and then pulling out power tools seemed less intimidating than writing.

Sure, maybe its because I don’t feel like I have anything important to say. Or maybe its that it takes a lot of effort to figure out what to write about. The latter seems like something concrete I can work on. Instead of just ‘write something’, I can have a more structured system for what to write about so I’m not staring at a blank piece of paper every time I sit down. Like having a workout plan before you go to the gym or a meal plan for your week.

Anyway, the bottom line is this: you can fail continuously but if you don’t quit, then you are still in the game and you can still win. That’s also how I quit smoking so its definitely not bullshit.