Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Okay, I'm gonna tell
Speaker 1: a story here. He's gonna love this. So I'm at
Speaker 1: Michael's like, this is like fifteen seventeen years ago. And
Speaker 1: then you know, they're giving me an overpriced salad to
Speaker 1: my third drink. And it's the art directors for my
Speaker 1: book and they're like, Tom, we have to have an
Speaker 1: inside sleeve one of your charts, one hundred and fourteen charts,
Speaker 1: which chart would be like when you open the book,
Speaker 1: you see it, you know, inside the book chet and
Speaker 1: I make the decision, like over the olive on the Martini,
Speaker 1: I said, it's got to be Malpass. Mail Passes at
Speaker 1: bear Stearns. And out of all the people in the book,
Speaker 1: and these are a heavyweight, Bill Dudley, the former Fed President,
Speaker 1: Bob the New York Fed President, Malpass had the most
Speaker 1: amazing chart, which was yen and yen and gold like
Speaker 1: what Dennis Gartman did joining us now the former head
Speaker 1: of the World Bank and iconic at bear Stearns, mister
Speaker 1: David Milpass as well. I just looked at yen in
Speaker 1: you and credit to Dennis Gartman as well. It's the
Speaker 1: call of the decade week yen that we saw, whether
Speaker 1: it's yen and gold or yen in whatever. How did
Speaker 1: Japan turn around this train wreck?
Speaker 2: Hi? Tom, you you can stabilize your currency by having
Speaker 2: a good growth plan. So Japan's got to articulate that
Speaker 2: they're not badly positioned in the world since people are
Speaker 2: trying to diversify away from China, and Japan has a
Speaker 2: lot of the things that people want, and so if
Speaker 2: they can retool the economy, it can work.
Speaker 1: It's an experiment of reflation, which is pretty you know,
Speaker 1: you're in Colorado college and it's like, you know, it's
Speaker 1: not even in the textbooks. Okay, it's an experiment in reflation,
Speaker 1: and they want to pull that back. Can they find
Speaker 1: a middle ground that works versus tripping into deflation again?
Speaker 2: They can, but they need to really think about their
Speaker 2: interest rates. You know, they're pushing up against the one
Speaker 2: percent limit on the tap. It really doesn't doesn't work
Speaker 2: to say you're going to limit your bond yield, but
Speaker 2: you want your currency to stop weakening. So right now
Speaker 2: they're intervening to try to tide that over. That can
Speaker 2: work for a little while, but at some point you
Speaker 2: have to say your interest rates are going to be
Speaker 2: more similar to the rest of the world interest rate.
Speaker 1: Paul wants to jump in one more question and yen.
Speaker 1: What is your call on Japanese yen? I know you're
Speaker 1: not doing FX and market economists, but do you see
Speaker 1: a big figure strengthening in Japanese yen or more of
Speaker 1: the same.
Speaker 2: I think it could settle where it is now and
Speaker 2: the world would accept that. And that is a little
Speaker 2: bit what is going on. The world moves through currency
Speaker 2: realignments and then tries to stabilize after that and reduce
Speaker 2: the harm from that.
Speaker 1: Oh, he's tanned and rested. I notice is left bank
Speaker 1: and he's exactly hand and rested.
Speaker 3: I know, I'm very impressed. David, we've seen come bringing
Speaker 3: it back to the US. Here my entire career, we've
Speaker 3: been talking about annual deficits in the national debt and
Speaker 3: now we even have Jamie Diamond, David Solomon, and gold
Speaker 3: and Sex talking about the national debt. We've even got
Speaker 3: that silly thing downtown where they tally of a national
Speaker 3: debt on a daily basis of everybody to see is
Speaker 3: it time to care about that stuff? Like I'm sixty,
Speaker 3: do I care.
Speaker 2: I think absolutely it is time to care. It was
Speaker 2: one thing when the US economy had a fifty percent
Speaker 2: debt to GDP ratio, you could borrow that and not
Speaker 2: really not really a tax the world's capital, or take
Speaker 2: all of the world's capital. We're the biggest economy and
Speaker 2: we're borrowing so much that it changes capital flows around
Speaker 2: the world, and I think it's doing it in a
Speaker 2: harmful way. It's the government gets the first DIBs on
Speaker 2: all capital, and then if there's any leftover, big corporations
Speaker 2: get it through the bond market. And if there's any leftover,
Speaker 2: which there isn't really, small businesses can borrow to fund
Speaker 2: their inventory, their working capital, and countries outside the US
Speaker 2: have a little bit of capital at the end of
Speaker 2: the line. That's not a workable system for the world.
Speaker 2: So I think there has to be, both in the
Speaker 2: US and in the world, an urgency that the US
Speaker 2: government stopped growing at spending.
Speaker 3: And this is a I guess a political issue, and
Speaker 3: again in my lifetime, i've never seen the political will
Speaker 3: to address it because it doesn't sound very popular.
Speaker 2: That's that's right, and I think there's a big gap
Speaker 2: in our law. You know, the debt limit law is misnamed.
Speaker 2: It's really the debt increase law. So every couple of
Speaker 2: years presidents both parties sign a law to increase the
Speaker 2: debt limit. I've we have to replace it with something workable, strong,
Speaker 2: and it has to hurt Washington, not hurt the people
Speaker 2: of the country when we're when we have too much debt,
Speaker 2: they shut the national parks rather than reducing the staff
Speaker 2: hiring in DC, the swamp gets bigger.
Speaker 1: World Bank. It's a swamp. Now, it worked in the swamp.
Speaker 1: What you learned working in the swamp.
Speaker 2: Uh, So in this Washington is a swamp. The parts,
Speaker 2: all the parts work together to make Washington bigger and
Speaker 2: more profitable. That's that's a risk. And the World Bank
Speaker 2: is part of that. It's headquartered and uh and centered
Speaker 2: in Washington. One thing I learned Tom was how hard
Speaker 2: it is to get any other country to do the
Speaker 2: right thing. It's just as hard outside the US as
Speaker 2: in the US. So if you take Nigeria, why is
Speaker 2: this oil rich country so poor? They've got a huge
Speaker 2: extreme poverty rate. Why is that because the government takes
Speaker 2: all the all the profits from oil and wastes it.
Speaker 1: This is such a better Mail pass than the World
Speaker 1: Bank and eight people standing around looking at every where.
Speaker 1: David Mail passes public service to the nation in the
Speaker 1: world with the World Bank and involved in politics as well.