WEBVTT - Dollar Steadies as Greenland Tensions Ease 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.880 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.520 --> 0:00:30.440 A joy to having the studios right now. Rebecca Patterson 0:00:30.480 --> 0:00:33.720 with all of her work working with a trust, the Bessemer, 0:00:34.200 --> 0:00:36.960 and also of course I worked with JP Morgan Ages 0:00:37.000 --> 0:00:39.960 Ago and with a small shop up in Connecticut called Bridgewater. 0:00:40.200 --> 0:00:42.040 She came in because it gets too cold, you know, 0:00:42.760 --> 0:00:46.320 like for like two weeks. Yeah, Connecticut can get like 0:00:46.360 --> 0:00:47.519 the Dakota have. 0:00:47.520 --> 0:00:50.160 Good coffee for the beverages. 0:00:50.280 --> 0:00:52.080 We don't all We have a beverage of your choice 0:00:52.120 --> 0:00:54.440 and we'll give you a Titos and tang give packed 0:00:55.200 --> 0:00:59.640 when you leave. You wrote any ft about everything you do, 0:01:00.160 --> 0:01:03.040 just a comeback to the foundation of a dollar is 0:01:03.080 --> 0:01:06.760 a dollar under threat after the foolishness of the last. 0:01:06.600 --> 0:01:10.039 Number of days, I think the important thing about the 0:01:10.120 --> 0:01:13.360 dollar is time frame and degree. You know, a lot 0:01:13.400 --> 0:01:16.679 of the media coverage this week with the threats of 0:01:17.040 --> 0:01:21.480 possible military intervention to acquire Greenland against its will, and 0:01:21.520 --> 0:01:24.920 then the backing off it. You saw some market reaction, 0:01:25.080 --> 0:01:27.240 but it was really just a one day sell America 0:01:27.640 --> 0:01:31.039 and everyone's saying, well, gosh, no one sold treasuries. Everything's fine, 0:01:31.080 --> 0:01:34.280 it's all hype. I'm like, no, it's not. It's time frame. 0:01:34.720 --> 0:01:38.920 What we're seeing is a slow erosion of confidence in 0:01:39.040 --> 0:01:41.640 dollar based assets. This is something that will play out 0:01:41.680 --> 0:01:43.880 over years, not a day or a week or a month, 0:01:43.959 --> 0:01:47.400 but it's happening. We saw news this week that Sweden's 0:01:47.480 --> 0:01:51.440 largest private pension fund is reducing significantly it's treasury holdings. 0:01:51.640 --> 0:01:54.360 And yes, Denmark is not a large country, but they're 0:01:54.360 --> 0:01:56.720 getting rid of their treasuries. There's more to come. 0:01:57.000 --> 0:01:58.840 I mean, Paul, can you I just love it having 0:01:58.920 --> 0:02:01.320 Rebecca and could you just say the poor soul who 0:02:01.360 --> 0:02:04.400 had three martinis in the city in London goes back 0:02:04.440 --> 0:02:06.880 to the desk in a major bank calls up when 0:02:06.920 --> 0:02:09.840 the phony goes celibate exactly. 0:02:10.160 --> 0:02:11.720 So how do we I mean, what does that mean 0:02:11.720 --> 0:02:12.240 for the dollar? 0:02:12.280 --> 0:02:12.440 Here? 0:02:12.440 --> 0:02:14.760 We had did the dollar sell from early last year, yep, 0:02:15.080 --> 0:02:17.440 that it could stabilized and actually had decent second half 0:02:17.480 --> 0:02:17.959 of the year. 0:02:18.000 --> 0:02:19.600 Here is that dollars still at risk? 0:02:19.600 --> 0:02:22.079 Do you think modest risk this year. 0:02:22.120 --> 0:02:24.160 So you know, there are a lot of factors that 0:02:24.200 --> 0:02:27.400 come together that drive currency markets. Part of it is 0:02:27.800 --> 0:02:30.640 cross border capital and trade flows. Part of it is 0:02:30.720 --> 0:02:34.440 expectations for interest rates to the relative yield of a currency. 0:02:35.000 --> 0:02:37.720 What helped the dollar in part and the second half 0:02:37.720 --> 0:02:40.280 of last year we didn't see as much hedging action, 0:02:40.480 --> 0:02:43.600 so foreign or US investors hedging out dollar risk. And 0:02:43.639 --> 0:02:47.160 then we also saw a reduction in expectations for FED 0:02:47.280 --> 0:02:51.680 rate cuts i e. Relatively higher rates, and that also 0:02:51.720 --> 0:02:54.920 gave us support to the dollar this year. You know, 0:02:54.960 --> 0:02:57.760 given how strong the US economy is at a high level, 0:02:57.880 --> 0:03:00.920 and given sticky inflation, which you talked about earlier this morning, 0:03:01.560 --> 0:03:03.480 it's going to be hard for the Federal Reserve to 0:03:03.520 --> 0:03:08.000 cut much unless something drastic changes. So that is going 0:03:08.080 --> 0:03:10.680 to prevent the dollar from weakening a lot. The dollar 0:03:10.760 --> 0:03:13.280 hedging the diversification, Like I said, this is kind of 0:03:13.280 --> 0:03:16.520 a slow drip, drip drip. This isn't a sudden flood. 0:03:16.760 --> 0:03:19.640 So I wouldn't be shocked to see a stable or 0:03:19.680 --> 0:03:21.920 maybe slightly lower dollar this year. 0:03:22.680 --> 0:03:26.280 Well, given that backdrop, the global geopolitical backdrop, I guess 0:03:26.280 --> 0:03:28.959 it's no surprise that we've seen gold been ripping, Yes, 0:03:29.120 --> 0:03:31.359 like crazy, that's still kind of the place. 0:03:31.440 --> 0:03:34.920 Yeah, So to me, that's the most obvious reflection of 0:03:35.000 --> 0:03:38.240 the diversification trade that's taking place. We know some of 0:03:38.280 --> 0:03:42.320 it is investors, and those could be speculative investors as well. 0:03:42.680 --> 0:03:45.640 But underlying that, we continue to see central bank demand. 0:03:45.680 --> 0:03:49.400 Central banks diversifying slowly but surely out of the US 0:03:49.480 --> 0:03:52.839 looking for other liquid assets. You talk to my good 0:03:52.840 --> 0:03:56.320 friend Mark Sobel at omfif the World Gold Council. Both 0:03:56.360 --> 0:03:59.280 of them do really good surveys of central banks every year, 0:03:59.320 --> 0:04:01.640 asking them what do you intend to do going forward, 0:04:01.920 --> 0:04:04.720 and the data shows that they're going to keep buying gold. 0:04:04.920 --> 0:04:09.120 I was not expected a meeting of the President of 0:04:09.120 --> 0:04:12.960 the United States with mister Zelenski of Ukraine clearly off 0:04:13.000 --> 0:04:17.240 the radar given yesterday's festivities. Mister Zelenski now speaking at 0:04:17.240 --> 0:04:20.160 the meetings of the World Economic Forum and Davos. Our 0:04:20.200 --> 0:04:22.880 team there will give you all that coverage. We'll look 0:04:22.920 --> 0:04:26.039 for the headlines here and bring them to you when 0:04:26.080 --> 0:04:29.039 we can. I look at your counsel and foreign relations. 0:04:29.080 --> 0:04:32.960 I mean froman hasn't slept in six days. It's nuts. 0:04:33.080 --> 0:04:35.440 Everyone's publishing. I know you're going to publish and give 0:04:35.520 --> 0:04:38.599 us a head start on that, But I look back 0:04:38.640 --> 0:04:41.800 to back in the Foreign Affairs magazine Elizabeth Economy on 0:04:41.880 --> 0:04:44.880 the international relations of the Arctic Ocean, and then you 0:04:44.960 --> 0:04:48.280 followed up with your senior fellow on China. With all 0:04:48.320 --> 0:04:53.000 that's going on in the frenzy, it's CFR. What are 0:04:53.080 --> 0:04:56.760 you focused on most? What does Rebecca Patterson study? 0:04:57.560 --> 0:05:00.760 I always look at the intersection of geopolitics, the economy, 0:05:00.760 --> 0:05:05.000 and financial markets because they all influence each other. One 0:05:05.000 --> 0:05:07.359 of the things I'm looking at now ahead of the 0:05:07.360 --> 0:05:11.880 Supreme Court decision about US tariffs is if we reduce 0:05:11.960 --> 0:05:15.080 the tariffs, take them off, shift them around, how does 0:05:15.120 --> 0:05:19.039 that translate into the affordability narrative in the United States? 0:05:19.320 --> 0:05:22.240 If tariffs are removed, do we actually see any price 0:05:22.320 --> 0:05:25.279 change that benefits you as consumers? How does that play 0:05:25.320 --> 0:05:27.640 out in the midterm election. So again, as looking at 0:05:27.680 --> 0:05:30.040 all these connections, So that is a piece of work 0:05:30.080 --> 0:05:33.000 I'm working on right now because I think we should 0:05:33.040 --> 0:05:36.000 get the Supreme Court decision fairly shortly. So that's one 0:05:36.360 --> 0:05:38.320 I think. The other one I'm trying to spend time 0:05:38.360 --> 0:05:40.520 on is the Federal Reserve. So we know we're going 0:05:40.600 --> 0:05:42.680 to get an announcement probably in the next week or 0:05:42.720 --> 0:05:46.800 so with the next nominee. But I never, none of 0:05:46.880 --> 0:05:50.359 us ever had to think about the legal intricacies of 0:05:50.400 --> 0:05:53.520 the FED before. Now I'm trying to understand things like, 0:05:54.160 --> 0:05:57.320 could you see not only two hundred billion buying of 0:05:57.360 --> 0:06:00.320 mortgage backed securities? Could you see a trillion mortgage? 0:06:01.160 --> 0:06:03.120 Paul's got eight questions? Let me be rooting in a 0:06:03.160 --> 0:06:08.120 rum once more a bestmer trust ages ago. Yep, you 0:06:08.160 --> 0:06:11.280 don't go to cash? I mean, with all the cacophony 0:06:11.400 --> 0:06:14.880 you just mentioned, how do you handle this news at 0:06:14.960 --> 0:06:17.480 CFR and where else? How do you do it and 0:06:17.480 --> 0:06:18.599 not go to cash? 0:06:18.720 --> 0:06:21.840 Well, I think the big takeaway for me is that 0:06:21.920 --> 0:06:25.680 while treasuries US government bonds still act as a diversifier 0:06:25.680 --> 0:06:28.599 in a portfolio, you can't expect them to work as 0:06:29.000 --> 0:06:31.960 effectively as they have for the last several decades. So 0:06:32.040 --> 0:06:34.560 when you diversify a portfolio, you have to think about 0:06:34.560 --> 0:06:37.640 it differently. That is part of the support for gold prices, 0:06:37.720 --> 0:06:41.360 which is extraordinary. It's part of why we see people 0:06:41.400 --> 0:06:46.640 going into alternatives more different types of alternative assets, and 0:06:46.720 --> 0:06:48.880 I think it's part of why again. So far this 0:06:49.000 --> 0:06:52.360 year we're seeing foreign markets out performing the US, So 0:06:52.400 --> 0:06:57.120 it's asset diversification, geographic diversification. But you're right, Tom, getting 0:06:57.160 --> 0:07:01.640 out of the markets given that risk assets outperform diverse 0:07:01.640 --> 0:07:04.680 fine assets eight years out of ten, because the economy 0:07:04.720 --> 0:07:06.920 is growing eight years out of ten. So to get 0:07:06.920 --> 0:07:10.400 out to react to the geopolitical headlines, you're doing yourself 0:07:10.400 --> 0:07:11.600 a disservice in balls. 0:07:11.640 --> 0:07:13.240 You know, you got to get back in. I mean 0:07:13.600 --> 0:07:16.440 I was in cash, but I took the leverage away 0:07:16.440 --> 0:07:19.640 and I went further to cash two or three days ago. Fine, No, 0:07:19.800 --> 0:07:21.240 I'm hammered I missed this. 0:07:21.840 --> 0:07:25.040 No, I mean even professional investors, the smartest ones in 0:07:25.040 --> 0:07:27.080 the world, timing when to get in and out is 0:07:27.120 --> 0:07:30.320 a fool's errand that's why you stay in the market. 0:07:30.360 --> 0:07:32.560 You just make tactical shifts on the margin. 0:07:32.680 --> 0:07:34.800 All the news this week, coming out of Davos, coming 0:07:34.800 --> 0:07:37.320 out of Greenland, we kind of forgot about. Japan had 0:07:37.320 --> 0:07:38.920 a little bit of a problem in their bond market 0:07:39.040 --> 0:07:41.880 earlier this week. That's spook people big time earlier in 0:07:41.880 --> 0:07:44.920 the week. Yes, that's just a technical thing. Should we 0:07:44.960 --> 0:07:45.720 not worry about it? 0:07:45.760 --> 0:07:49.400 Is there any contangent issue there, yes, yes, yes, so 0:07:50.440 --> 0:07:53.000 yes you should worry about it. Yes, there is contagion. 0:07:53.880 --> 0:07:57.880 I'm talking about US treasuries and are we going to 0:07:57.920 --> 0:08:00.280 have enough buyers to meet the amount of supply we 0:08:00.320 --> 0:08:02.520 have to issue to pay for our deficits. But it's 0:08:02.560 --> 0:08:04.960 important to remember over the last twenty or so years, 0:08:05.120 --> 0:08:08.880 global bond markets have gotten much more integrated. People own 0:08:08.960 --> 0:08:12.000 global bonds, not just their own countries bonds today, and 0:08:12.040 --> 0:08:14.920 that means something that happens in Japan or France or 0:08:15.000 --> 0:08:18.480 the UK can and will affect the US treasury market also. 0:08:19.360 --> 0:08:21.280 So we do need to care about Japan, what the 0:08:21.320 --> 0:08:23.440 Bank of Japan does at its next meeting, which I 0:08:23.440 --> 0:08:27.520 believe is tonight, right. And then of course Prime Minister 0:08:27.600 --> 0:08:31.440 Takeichi when she has this snap election, do we see 0:08:31.440 --> 0:08:34.880 additional stimulus after that? How does that make people think 0:08:34.880 --> 0:08:36.240 about the fiscal dynamics. 0:08:36.600 --> 0:08:40.080 So again I come back to I have to buy 0:08:40.200 --> 0:08:42.520 US treasuries, buy treasuries in gold. 0:08:42.640 --> 0:08:43.640 No no, no, no, no no. 0:08:43.679 --> 0:08:46.600 Look, I'm not saying dump all your treasuries by any stretch, 0:08:46.800 --> 0:08:50.319 but you want to think more diversified. It's been fascinating 0:08:50.360 --> 0:08:53.719 to me to see that you are seeing institutional investors 0:08:53.760 --> 0:08:58.240 looking at more fiscally sound bond markets today, So countries 0:08:58.240 --> 0:09:01.959 that don't have those big debt difficulties looking at. 0:09:01.760 --> 0:09:03.960 Hell the boat in Germany. Is that what I'm hearing here? 0:09:04.080 --> 0:09:07.040 I mean some of the some of the European bond 0:09:07.040 --> 0:09:11.800 markets are attractive. Canada, Australia relatively better, Norway, Singapore. The 0:09:11.840 --> 0:09:14.840 problem is these markets don't have as much liquidity, so 0:09:14.960 --> 0:09:17.200 that's only so far it can take you. But you 0:09:17.200 --> 0:09:19.120 do want to have a global basket of bonds and 0:09:19.240 --> 0:09:23.559 emerging markets. EM is the new DM, So emerging market 0:09:23.640 --> 0:09:27.440 fiscal dynamics today are much better than they've been in general. 0:09:27.480 --> 0:09:29.520 I'm not talking about every country for a long time. 0:09:29.640 --> 0:09:32.040 Should we steal that phrase? EM is the new DM, 0:09:32.200 --> 0:09:34.000 or DM is the new You got to go nerd 0:09:34.120 --> 0:09:36.680 on your back to foreign exchange with JP Morgan here, 0:09:37.040 --> 0:09:40.320 I mean, I'm sorry, the Japanese mess, when it goes 0:09:40.960 --> 0:09:46.720 to me, is wildly nonlinear. Discuss the jump condition we 0:09:46.800 --> 0:09:49.200 could see in Japan. I fit on ravels well. 0:09:49.360 --> 0:09:52.600 The JGB market, the Japanese government bond market is not 0:09:52.760 --> 0:09:55.200 the most liquid bond market, to say the least. So 0:09:55.679 --> 0:09:58.560 to your point, Tom, the risk of a jump right 0:09:58.640 --> 0:10:00.120 of a big move, and we saw a bit of 0:10:00.160 --> 0:10:03.400 that on Tuesday, another one of those happening. You will 0:10:03.440 --> 0:10:06.640 have contagion to the Japanese stock market, and a lot 0:10:06.679 --> 0:10:09.800 of investors have added Japanese exposure over the last fifteen 0:10:09.840 --> 0:10:13.160 eighteen months, so there's contagion risk there that could come 0:10:13.200 --> 0:10:14.640 back and affect global markets. 0:10:14.720 --> 0:10:17.080 With a cold coming. I mean Rebecca and I live 0:10:17.160 --> 0:10:22.400 in the same neighborhood. I mean Rebecca, Saturday eleven above 0:10:22.480 --> 0:10:27.000 zero on the east side of Central Park, I mean 0:10:27.280 --> 0:10:30.840 ten degrees on Tuesday. It's even worse next week. How 0:10:30.880 --> 0:10:32.960 much wind do you need to take an uber the 0:10:33.000 --> 0:10:35.520 three blocks you need to walk? Gee? Is it like 0:10:35.679 --> 0:10:37.720 two miles an hour? Or do you need to see 0:10:37.760 --> 0:10:38.280 ten or fist? 0:10:38.360 --> 0:10:40.480 I'm just toting not to go outside at all. God 0:10:40.520 --> 0:10:44.440 bless Zoom and teams in the delivery Ectly. I'm going 0:10:44.480 --> 0:10:47.120 to be making a lot of soup, I think Saturday 0:10:47.160 --> 0:10:48.720 morning I'm going to be stocking up. 0:10:48.640 --> 0:10:49.760 With it's a favorite soup. 0:10:50.280 --> 0:10:53.800 My favorite is butternut squash. But I a good homemade 0:10:53.840 --> 0:10:56.680 tomato cream of tomato soup, and I'm going to play 0:10:56.679 --> 0:10:58.240 with some lentils. I think this weekend. 0:10:58.360 --> 0:11:00.079 There you go. See it's at nine o'clock hour a 0:11:00.160 --> 0:11:01.720 lexus where you just go into the food. 0:11:01.800 --> 0:11:05.440 Said, but you know what yesterday I made ago lemono. 0:11:05.600 --> 0:11:09.320 It's a Greek and lemon soup. I'll give you the restaurant. 0:11:09.360 --> 0:11:13.480 You know, the Greek restaurant on York Avenue. It starts 0:11:13.480 --> 0:11:14.679 with a why it's. 0:11:14.640 --> 0:11:18.240 Phenomenal, yesie, yes, yes, yes, I think that's it. I 0:11:18.240 --> 0:11:19.920 have to look out. I know what I can picture. 0:11:19.960 --> 0:11:23.040 I get that soup fantastic. I call it super lexus. 0:11:23.120 --> 0:11:26.840 It's great. So you can you bring in like lemon 0:11:26.960 --> 0:11:27.960 Greek potatoes. 0:11:28.679 --> 0:11:29.360 I can do that. 0:11:30.080 --> 0:11:32.080 Are they delicious? I tried to cook them like eight 0:11:32.080 --> 0:11:32.960 times and I'm going. 0:11:32.840 --> 0:11:34.880 To get dried out, and yeah, I'm a failure. 0:11:35.000 --> 0:11:37.840 See this is one of the many reasons I love Bloomberg. 0:11:38.320 --> 0:11:40.800 I have great conversations with you all. I never know 0:11:40.840 --> 0:11:43.440 where it's going. And when I'm done, you have this 0:11:43.640 --> 0:11:46.400 amazing food and coffee spread upstairs. 0:11:47.320 --> 0:11:49.960 It is a little treat. Well, mister Bloomberg's. People stopped 0:11:49.960 --> 0:11:52.200 by today said is it true Rebecca Patterson's and I 0:11:52.200 --> 0:11:54.319 said yes, I said, They said, well, the cheese it's 0:11:54.360 --> 0:11:58.920 outson thank you so much. The counts on foreign relations 0:11:58.960 --> 0:12:02.240 or a recent essay in the Financial Times and the challenges, 0:12:02.440 --> 0:12:06.800 including important quotes there from the pension system of Denmark 0:12:06.920 --> 0:12:11.120 as well. Stay with us. More from Bloomberg Surveillance coming 0:12:11.200 --> 0:12:12.200 up after this. 0:12:19.440 --> 0:12:23.000 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:12:23.080 --> 0:12:26.240 weekday afternoons from seven to ten am Eastern Listen on 0:12:26.320 --> 0:12:30.000 Applecarplay and Android Auto with the Bloomberg Business app, or 0:12:30.120 --> 0:12:31.640 watch us live on YouTube. 0:12:32.000 --> 0:12:35.040 We are privileged now, whatever your politics, after what we 0:12:35.080 --> 0:12:38.320 saw yesterday, here to pick up the pieces. Wendy Shiller, 0:12:38.400 --> 0:12:42.880 Professor of Chaos, Brown University. Wendy, is there a permanent 0:12:43.120 --> 0:12:47.720 change in the diplomacy of the United States after Trump? 0:12:48.320 --> 0:12:51.839 Is this the way it's going to be? Well, I 0:12:51.920 --> 0:12:52.240 don't know. 0:12:52.320 --> 0:12:54.360 You know, we have to say permanent when we talk 0:12:54.400 --> 0:12:59.480 about American politics. But the president is simultaneously projecting power, 0:13:00.400 --> 0:13:02.520 but not in the way that I think europe is 0:13:02.679 --> 0:13:07.120 used to, which is through treaty diplomacy, sort of a 0:13:07.160 --> 0:13:11.800 whole coordinated effort balancing countries off each other, consultation. 0:13:12.400 --> 0:13:17.839 That's not happening. But the president is still really extending. 0:13:17.320 --> 0:13:21.440 A very long arm a very long reach of American power, 0:13:21.720 --> 0:13:25.040 and he's trying to leverage i think economic power over 0:13:25.120 --> 0:13:28.800 military power. He's had success in terms of NATO, NATO, 0:13:28.920 --> 0:13:31.040 you know, Europe kicking in more money for their own 0:13:31.040 --> 0:13:34.439 defense and basically telling Europe, you know, will be your 0:13:34.559 --> 0:13:37.760 partner when it's in our interests, but we're not going 0:13:37.840 --> 0:13:41.160 to be on call for you anymore. And I think 0:13:41.200 --> 0:13:43.440 that's a significant shift for Europe to deal with. 0:13:43.840 --> 0:13:44.200 Wendy. 0:13:44.320 --> 0:13:46.559 What have we seen from Europe this week at Davos 0:13:46.600 --> 0:13:48.840 and then just in the last twelve months of this 0:13:49.120 --> 0:13:50.920 second Trump administration about. 0:13:51.080 --> 0:13:52.679 Show them some solidarity here? 0:13:52.720 --> 0:13:55.400 It just doesn't feel like it's even there even this 0:13:55.559 --> 0:13:57.640 week in terms of trying to craft a response to 0:13:57.720 --> 0:14:01.240 President Trump's discussions about Greenland, it just doesn't seem like 0:14:01.280 --> 0:14:03.360 Europe's that unified yet. 0:14:04.480 --> 0:14:06.600 Right, So, Paul, that's an excellent point. 0:14:06.600 --> 0:14:10.240 I Mean, the stunning thing is how President Trump sets 0:14:10.280 --> 0:14:13.480 the world's agenda. You know, this is really something I 0:14:13.480 --> 0:14:14.360 mean we saw Reagan. 0:14:14.400 --> 0:14:15.079 But Reagan had a. 0:14:15.000 --> 0:14:18.360 Sort of a consistent platform and a solid enemy quote 0:14:18.400 --> 0:14:21.080 unquote in the Soviet Union, so it was sort of 0:14:21.120 --> 0:14:23.359 easy to sort of dominate that conversation. 0:14:23.840 --> 0:14:25.600 Now the world is such a very different place. 0:14:25.640 --> 0:14:29.320 But President Trump still dominates international politics this way, and 0:14:29.520 --> 0:14:33.359 Europe seems to be scrambling. They have their own problems internally. 0:14:33.480 --> 0:14:38.160 I think issues like the economy, transitional economy, tech, and 0:14:38.240 --> 0:14:41.200 you know, emigration have really royaled Europe. 0:14:41.320 --> 0:14:41.960 So I think. 0:14:41.840 --> 0:14:43.880 Europe's trying to each individoal contr's trying to get their 0:14:43.920 --> 0:14:45.640 own footing, particularly since Grexit. 0:14:46.040 --> 0:14:48.360 I think losing the Great Britain as a real. 0:14:48.280 --> 0:14:51.200 Partner in the EU, I think has really created more 0:14:51.240 --> 0:14:53.040 turmoil there than we would have expected. 0:14:53.520 --> 0:14:55.720 Where are the senators? I mean, you know, I can 0:14:55.800 --> 0:14:57.760 pull out any number from the past. Let's go with 0:14:57.760 --> 0:15:03.400 the Richard Lueger, who is you know, wonderful Republican senator? 0:15:03.520 --> 0:15:06.960 Are there? Richard Luger is out there monitoring this, discussing this, 0:15:07.360 --> 0:15:10.840 being senatorial tom. 0:15:10.880 --> 0:15:14.200 I just think there isn't as much capital or political 0:15:14.440 --> 0:15:18.680 value to senators and focusing on international affairs, particularly in 0:15:18.840 --> 0:15:21.880 the Republican Party. I think the Democratic Party and the 0:15:21.880 --> 0:15:25.400 Republican Party have traded places there. But right now, you know, 0:15:25.520 --> 0:15:28.600 Americans are concerned about what's going on in America. I 0:15:28.600 --> 0:15:31.040 think that's what twenty twenty four told us, and I 0:15:31.040 --> 0:15:36.120 think that the polls continue to tell us, you know, affordability, housing, healthcare, 0:15:36.360 --> 0:15:40.320 these are domestic issues, and I think that's where there's 0:15:40.360 --> 0:15:43.800 no real political gain for reminding America that being a 0:15:43.800 --> 0:15:46.280 partner to Europe is a safer place to be than 0:15:46.320 --> 0:15:47.520 not being a partner of Europe. 0:15:47.520 --> 0:15:50.560 And it's the smartest single thing I've heard Paul in 0:15:50.720 --> 0:15:55.520 all this thirty hour extravaganza with the president. I mean 0:15:55.880 --> 0:16:00.800 Richard Lueger and on the Wikipedia page, Sam Nunn Evan 0:16:00.920 --> 0:16:06.240 by Victoria Neuland I mean, Paul, we are in a habit, 0:16:06.560 --> 0:16:09.760 a method of how we do this, and it shattered. 0:16:10.280 --> 0:16:14.800 Yeah, he certainly upended the political spectrum. So Wendy, again, 0:16:14.840 --> 0:16:17.640 it is election year here. To what extent do we 0:16:17.640 --> 0:16:19.600 think President Trump, when he does get back to the 0:16:19.600 --> 0:16:22.760 States maybe does refocus a little bit more on the 0:16:22.800 --> 0:16:25.280 domestic agenda? Hack, How important do you think he's going 0:16:25.280 --> 0:16:26.520 to be in these midterm elections? 0:16:27.600 --> 0:16:29.800 Well, I mean, that's sens I'm not sure he focuses 0:16:29.840 --> 0:16:32.680 on the policy agenda, but it does look like he's 0:16:32.760 --> 0:16:37.440 refocusing his attention on Republican primaries and using that power 0:16:37.880 --> 0:16:41.880 among the really loyal Republican primary voter base, which tends 0:16:41.920 --> 0:16:44.600 to be the most ideological, the most conservative, and the 0:16:44.640 --> 0:16:47.360 most in love with Trump to affect things like Bill 0:16:47.400 --> 0:16:51.320 Cassidy's racing Louisiana Senator Cassidy to get Cassidy to vote. 0:16:51.120 --> 0:16:53.440 For things that Trump wants. But right now, the President 0:16:53.440 --> 0:16:55.160 hasn't articulated. 0:16:54.720 --> 0:16:57.880 What he wants from Congress going forward this year. So 0:16:57.920 --> 0:16:59.760 it's one thing to hold the sort of down, cleaves 0:17:00.120 --> 0:17:02.600 their heads, but what are you asking for? And I've 0:17:02.640 --> 0:17:05.639 been surprised that he hasn't wanted to resolve the issue 0:17:05.680 --> 0:17:07.280 of a longcare premium subsidies. 0:17:07.560 --> 0:17:09.240 You know that's going to continue to. 0:17:09.359 --> 0:17:13.199 Ripple and filter and affect people and affect his Brewer writings. 0:17:13.280 --> 0:17:15.200 So how come he's not leaning on Congress to get 0:17:15.200 --> 0:17:15.520 that done? 0:17:15.760 --> 0:17:17.880 Well? Can we go inside Brown University now? 0:17:17.920 --> 0:17:18.160 Sure? 0:17:18.600 --> 0:17:23.280 Professor Scholler William Rhodes ninety one years old, all that 0:17:23.320 --> 0:17:27.119 he's done for Brown University at City Group, folks, he 0:17:27.240 --> 0:17:30.720 codified the idea central banker to the world. Bill Rhodes 0:17:30.760 --> 0:17:34.840 with an essay in the Ft walking through how all 0:17:34.880 --> 0:17:37.840 this is shattered? And he says, you know what all 0:17:37.960 --> 0:17:41.320 King Charles has to do is step up and see 0:17:41.320 --> 0:17:44.960 the Royalty of Denmark, and that would change the dialogue. 0:17:45.080 --> 0:17:47.320 I mean it was literally Bill Rhodes thrown back to 0:17:47.359 --> 0:17:51.639 the nineteenth century. Can the royal family actually get in 0:17:51.680 --> 0:17:55.639 the middle of this Greenland issue and change the dialogue 0:17:55.680 --> 0:17:56.639 of President Trump? 0:18:00.000 --> 0:18:02.120 No, but I mean a phone call to President Trump 0:18:02.200 --> 0:18:03.200 probably wouldn't hurt. 0:18:03.359 --> 0:18:05.840 He likes the royal family, he likes the. 0:18:05.760 --> 0:18:09.000 Pomp and circumstance, so I don't think it's a terrible idea. 0:18:09.200 --> 0:18:11.560 And we do have the Road Center at the Boston Institute, 0:18:11.560 --> 0:18:15.040 and it's a terrific political economy center, so we are 0:18:15.080 --> 0:18:18.119 grateful for that kind of support. But I think here 0:18:18.400 --> 0:18:22.320 we saw the President recognizing that he had maybe gone 0:18:22.440 --> 0:18:23.240 just a little too far. 0:18:23.560 --> 0:18:25.520 I mean, it's a trunk way of doing things. 0:18:25.400 --> 0:18:28.119 Right, go too far, blow things up, but then back 0:18:28.200 --> 0:18:31.679 off very quickly when you realize that you can, and 0:18:31.720 --> 0:18:35.120 no other president has done this recently, negotiate for favorable 0:18:35.200 --> 0:18:38.560 terms on access to minerals or access shipping lanes. But 0:18:38.600 --> 0:18:42.040 he backed off pretty quickly, and that was something we're 0:18:42.040 --> 0:18:43.600 not quite used to with this person. 0:18:43.960 --> 0:18:46.920 So in the fourteenth edition of your Classics Civics book, 0:18:47.200 --> 0:18:49.560 is there going to be a chapter twenty three Trump 0:18:49.640 --> 0:18:53.240 and Taco. Is that what we have to look forward to, Wendy. 0:18:55.560 --> 0:18:58.600 I'm literally negotiating how many changes I can make to 0:18:58.640 --> 0:19:01.400 the existing chapter on the President as we go forward with. 0:19:01.359 --> 0:19:03.320 Our next edition. So I will tell you that in 0:19:03.359 --> 0:19:04.080 a couple of months. 0:19:04.160 --> 0:19:06.879 Okay, Wendy Sheller, thank you, thank you, thank you at 0:19:06.880 --> 0:19:11.879 Bill Rhodes Brown University today. Really really appreciate it. Stay 0:19:11.920 --> 0:19:15.760 with us. More from Bloomberg Surveillance coming up after this. 0:19:23.040 --> 0:19:26.600 You're listening to the Bloomberg Surveillance podcast. Catch US Live 0:19:26.680 --> 0:19:29.879 weekday afternoons from seven to ten am Eastern. Listen on 0:19:29.920 --> 0:19:33.600 Applecarplay and Android Auto with the Bloomberg Business app, or 0:19:33.760 --> 0:19:35.240 watch US live on YouTube. 0:19:35.520 --> 0:19:37.879 Jane fully with us now with Rabobank. They have a 0:19:38.080 --> 0:19:42.720 very interesting relationship, folks. They do all sorts of commercial activities. 0:19:42.760 --> 0:19:45.720 So Jane has really got the pulse of trade and 0:19:45.880 --> 0:19:51.480 commerce within what she's doing with foreign exchange strategy. Jane, 0:19:51.560 --> 0:19:53.960 right now, I'm looking at the cross rates. You look 0:19:53.960 --> 0:19:56.639 at the majors dollar yen e're a yen da da 0:19:56.720 --> 0:19:59.159 da da da Okay, fine, but I look at the 0:19:59.280 --> 0:20:03.760 nuances and I'm unsure what they're signaling, like I see 0:20:03.800 --> 0:20:09.360 euro yen finally signaling euro strength versus yen. How does 0:20:09.440 --> 0:20:13.480 Japan get to their Monday morning our Sunday afternoon in 0:20:13.560 --> 0:20:14.040 New York. 0:20:16.119 --> 0:20:19.000 Well, you know, we know that the market's very skeptical 0:20:19.000 --> 0:20:21.120 of the yen, and it has been for months now. 0:20:21.160 --> 0:20:23.600 We still have I think a lot of the speculative 0:20:23.640 --> 0:20:27.399 community really still seeing the yenna as the basis or 0:20:27.400 --> 0:20:30.320 the funding currency of a Carrie Traven And I think 0:20:30.320 --> 0:20:32.399 the onus has got to be on the Bank of 0:20:32.480 --> 0:20:34.800 Japan as well as maybe the Ministry of Finance to 0:20:35.320 --> 0:20:38.320 really shake and rattle that view. So we do have 0:20:38.880 --> 0:20:42.320 a Bank of Japan policy meeting tomorrow, and I think 0:20:42.359 --> 0:20:46.160